Bitcoin Forum

There are more and more centralized exchanges, but less and less trust. Which one do you prefer between regulated compliance exchanges and decentralized exchanges?

Both regulated compliance and decentralized exchanges are good where selecting exchange is different from your requirement. In the current industry, still, Dexes provides limited functionalities of trading in terms of liquidity, speed, charts, and different types of trading techniques like margin, futures, and OTC. If you looking perfect solution, you have to choose the proper centralized exchange.

How about waiting it out till there appears some regulation among crypto exchanges as what should be the average listing fees and the average listing time. We have seen exchanges cheat on ICO project owners, even if the latter are nothing but scams, asking for exorbitant sums of money for listing their coins. They have no chance but to move to a less known more suspicious exchange for allowing trading of their coin.

Decentralized exchanges do avoid this situation but the scams will never decrease. Since the owners of DEXs remain anonymous in most cases they are hard to track down without cybercrime support. Even then recovering the funds is something that nobody is capable of without bruteforcing the private key.

The legal aspects of usage and trading of crypto is what is needed next before anything can be done in this sector.

Centralized exchanges have road risks and capital security risks, and the government is not friendly to digital currency exchange policies.

YES!Perhaps we need to understand whether these thousands of digital currencies are necessary before the exchange. There are only a handful of digital currencies that can show value.

I will go for the safest... Properly decentralized exchanges are safest for me. I can't imagine leaving lots of coins on centralized exchanges long-term. Lots of bad thing could happen to it. But with a fully decentralized exchange, you control your keys... you can hide your keys and take your minds off your coins as long as you want-- peace of mind.
By the way, the centralized exchanges can change their policies anytime and that could affect your ability to access your funds or use them easily. Decentralized exchanges are great.

Whether it is a decentralized or centralized exchange but traders always looking at the liquidity of the exchange. The market volume and the number of trading pairs. And the second priority is security, as long as the exchange has been built a strong reputation that is fine to them. Both of them had pros and cons that might we can benefit the most.

Here is my short insight between them.
Decentralize:

• Not recommendable to newbies
• Low liquidity
• Anonymous/Anonymity
• You have a full control of your fund

Centralized:

• Easy to use by newbies and has advance feature
• Good in terms of Liquidity
• They are the third party between traders and they are controlling your fund, not you
• Collecting your personal identities and should pass KYC

Now, you think which better for you.

To tell you honestly, this isnt about which one. I am using both and so far it has come with advantages and disadvantages.

Which one you like first? Okay lets go with decentralized exchange. I like the freedom we can get from using this, but sometime I am not happy with the volume or the book order of the token Ive wanted to trade, obviously its not comparable to centralized exchange. But good thing is I can avail cheaper and out of the market price bargain tokens.

Now, on the centralized exchange, you can call them perfect and has a friendly user platform especially those big one such as Binance, Kucoin and Bithumb. Very easy to use, what I dont like is if you want to increase your daily volume or token traded you need to pass KYC which sucks. Thats all there is to hate but for the purpose of anti money laundering. I can accept it.

I prefer with a centralized exchange, and I don't mind to send the document that they needed to verify my account. But I only use the recommended exchange to prevent something bad that can happen. I have a terrible experience with some decentralized exchange which makes me trauma, but that doesn't mean I don't want to use that exchange. I still have some tokens in the decentralized exchange, and I still trade in that exchange though I don't trade too often.

Trust and reputation is an important factor for choosing anything centralized so people will go for most reputed exchanges like binance,kucoin and in decentralized exchanges also everything can't be trusted so find an exchange which has good reviews if it says they are decentralized.

I  still prefer the compliance exchange because they are at least validated most of the time, not the small timers because they are basically as anon as dex ones gets but at the same time think about stuff like Binance and Poloniex and Bittrex and all the other ones that big, these are known and they are huge so we all know their headquarters and their CEO and their information as well, so when something goes wrong we could at least blame them.

Remember mt.gox for example, they did get "hacked" but right now they are in loads of trouble as well so at least we know that something as big as binance can't steal because if they do they will be jailed. It is quite obvious that they are going to keep it steady, maybe they will get hacked for real but they will not be "hacked" like exit scam.

There some positive and negative things for both type of exchange centralized & decentralized. When question come to centralize then first thing come into mind about security management. But when question come to the decentralize exchange first concern is regarding volume. On the other hand its quite hard to find your expected trading pair on decentralized exchanges. They mostly based on ethereum chain so basically they list same tokens. In a result lots of shitcoin will be available there which would lead you huge lost later on. But a reputed centralized exchange do their own diligence  before list and even create voting system to get traders opinions. You should prepare yourself for KYC if you choose reputed exchanges with huge volume, because you will not found huge volume on decentralized exchange. So at the beginning I will prefer to start with a reputed & trusted centralized exchange to learn more because it's quite easy than decentralized exchanges.

 For me decentralised exchanges have always worked and honestly I do not see the need to go for compliance exchanges since the risks are so much higher - at least in my opinion anyway. I just dislike the idea of sharing my account details, outsourcing has not really been my thing since I'm more wary of scams and I'd rather keep my investments as safe as I can.

It is always different on what the user or trader needs.
For example, if the trader want some low trading fees since he/she is a scalp trader or trader who always have positions, then for sure he/she will choose the centralized one. But if you are a trader and got no problem in any KYC if that centralized exchange will ask for KYC, then it will be no problem.

Yes, which DEX are you using now?

Regulated exchanges like Coinbase are more suitable, but for most "global" exchanges, security issues cannot be reassured.

For Chinese like me, it is not allowed to trade on coinbase

If something goes wrong, will they be imprisoned? I suggest you pay attention to the incident of their boss after Fcoin carried tens of thousands of BTC. Many people are reporting him and looking for him everywhere, but he is still at large.

There are several threads already about the comparison or on the talks between centralized and decentralized exchanges.

https://bitcointalk.org/index.php?topic=5104208.0
https://bitcointalk.org/index.php?topic=5165454.0

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On topic, the main difference between the two excluding the privacy thing is that centralized exchanges do have fiat pairs
and thats the main reason why anyone do end up on using cex and we can actually see the difference when it comes to volume or liquidity.

Yes, this topic has been discussed in detail already. Also, most of the time the liquidity of the token or coin in dex is very low to non existent when it is compared to cex.  So it really depends on the coin or token that you want to trade with. You need to evaluate the situation before sending your coins to any of them. But if you do prefer to use a centralized one, I think one safe exchange to use is BNB right now. They have lower btc withdrawal fee also as compared to other popular ones. And no need to undergo KYC if you are only dealing with 2btc and below. But in case you can't find the trading pair on them, just look for a reputable exchange and don't forget to withdraw your money once your trading is finished. This action should be observed at all times when you are in exchanges to avoid possible loss of your money.

I can do use both exchange, even they have a kyc its doesnt mean you need to also follow and give your document to them. There are daily limit you can use for every exchange even you dont make a kyc the 2-10 BTC maximum daily limit for not verified account is enough for me.

These will only be a problem if you have a large fund you want to use in that exchange .that is necessary for you to follow and completed the required kyc to be able to continue to use that exchange.

For the record though, one DEX has problems recently, Hacker Exploits Flaw in Decentralized Bitcoin Exchange Bisq to Steal $250K (https://www.coindesk.com/hacker-exploits-flaw-in-decentralized-exchange-bisq-to-steal-250k).

Of course as personal preference, all we have is a decentralised exchange not those exchanges that require a mandatory KYC and funds are not save. So if you are going to get yourself involved in trading, you need to weight the pros and cons. @sheenshane laid out it out for us to see, so it is really up to us which one do you like best. You can try it yourself though, used bought services and see which one you are comfortable with.

I prefer DEX cause even if it was just an additional reward, the anonymity it provides is just up my wants. But, there is an issue with scams and losing money can be quite painful especially if you pretty much worked your ass for it. This is why even though I prefer DEX, I mostly use CEX every time I trade. It's not like I want to, but I don't have much choice. It's just an issue of probability tbh. Using DEX's provides scammers a lot more chances to scam me, whereas CEX's most often than not have quite a secure system for trading. KYC may be a pain in the ass, but comparing that to me losing my money, well, you could guess which is better right?

Just because an exchange is a DEX one doesn't mean that it will never have problems, of course some DEX will face with some issues like this, that is why DEX is not really all that much well into by the public as well, they are acting like they are the improved version of the exchanges whereas they are just shifting the blame on the client side instead of server side and that's it.

Surely we the crypto people love decentralized anything, as long as it is decentralized we will take a look into it, but as you can see the DEX we have are not really high end and they need some improvement, whereas compliance exchanges are all making millions of dollars combined so they are improving a lot faster and a lot better. I can give my freedom very rarely but if the difference is so huge, it just makes sense to use compliance ones.

I will choose exchange site that most traders used. Because it has always had a large volume of coins and pairs to trade.
No matter it is DEX or CEX it always good to trade if it has a large volume, your will easily trade and get more profit to it.
One thing that traders always remember, don't leave your crypto sleep on crypto exchange wallet. Because once you did not control the private key, it means the coins you stored is not yours.

In most cases then centralized exchange is commonly being used because of its features specially you can either cash in or buy crypto with fiat and same goes if you
do try to make withdrawals or conversions from crypto with fiat which isnt possible if we do make use of decentralized exchangers thats why we can really see the
difference when it comes to volume and if we do count or compare how many dex now compared to centralized ones then we can tell which do have higher demand.

Good volume also means you can get in and out easily.
If you can trade your coins fast and smooth, the chance of withdrawing your coins from the exchange is also fast.
Keeping your coins longer in an exchange, will put your coins vulnerable to potential attacks.
So yes, once you are finished with your trading, withdraw and send it to your secured wallets.

Honestly I never try to use decentralized exchange so I can't give an assessment against it. I may have to use my time to find more about decentralized exchange and use them as a refference.

I just have a comfortable feeling to use compliance exchange so far, so I never look decentralized exchange as my basic needs (I admit that is wrong behavior). I use binance and my local exchange to trade because both of exchange is freindly used.

I have never face any problem so far, just doing it simultaneously in my whole trade and saving my asset. I have my own principle, as long as the exchange is trusted by many people I have no worry to give my personal identity.

I would like to trade in a decentralized exchange but the problem we see is that the liquidity is not that great, if we have a good volume in decentralized exchanges then i am sure everyone would shift to those exchanges. When it comes to security i am yet to see a really good decentralized exchange rather than building that on top of ETH blockchain and i do not see those as completely decentralized.

It all depends on your goals. I can assume that you are a beginner once asking similar questions.
First of all, I advise you to contact YouTube and watch the training videos for each exchange you are interested in.
Try to choose the exchange among those who advised you above, some rating systems do not display the best exchanges at the top of their lists.

This is a very cautious strategy, I think the digital currency will live longer than the exchange ;)

Or he can try to trade on both centralized exchange and decentralized exchange to find out more. I am sure that after he tries, he will know which one that he can choose to trade because he will get the experience while he trade, and he will found the right exchange for him. If he only watches a video from Youtube without trying to figure out, he will not get the experience, and he will not feel the difference between the exchanges.

You might be right about exchanges not really being too secure but do not forget that everything has a chance to be hacked no matter what you use. Dex exchanges have been known to get hacked as well and even tho it didn't really withdrew people's money, it was used to pump and dump so basically it was stolen but in a more indirect way.

Even your own computer could be hacked if people know you store it there, so there is nothing that you can do to stay away from the hacks and security issues, as long as it is digital there is a way to hack it. Which is why compliance exchanges are still far better because you are giving them the power but also held them responsible for them as well, they are taking the risks involved in return of their profits in a way.

Okay lets put up some example in related to that.

https://www.ibtimes.com/bisq-hack-250k-worth-crypto-stolen-users-2955689
https://www.coindesk.com/hacker-exploits-flaw-in-decentralized-exchange-bisq-to-steal-250k

I didnt really expect for Bisq to have that kind of issue yet i do trust this dex ever since. Nothing is indeed safe!

As much as I'd like to be on the side of decentralized exchanges, I can't deny the fact that current Dex(s) have performed far below expectations. If it's not their lack of liquidity and volume, it's the ease of use of their platforms. Let's admit it, setting a decentralized exchange account isn't noob friendly. A lot can go wrong in the process. Also current implementations are all glue to one blockchain or another. They lack cross chain integrations.

Isn't digital currency born for decentralization? Why should we trust an unregulated exchange?

Well, the reason why you should trust could change, you do not even have to trust the unregulated exchanges (not like dex is regulated neither) but the reason why people use it is not because they trust them, they use it because they have to and have nowhere else they can trade.

I love all of these people who love to defend Dex but when you look at the volume of many coins in those DEX they are almost zero, if you love it so much go start trading there every day all day and find other people who will too and we will join you guys later on when there is actually enough volume and liquidity to trade there. Why would I give up a trading place that I have been using for years with zero problems and amazing volume and liquidity, just to go to a place because it promises to be better?

It ’s just that when there is no law, no one knows which exchange is trustworthy

Not necessarily. You may have a good volume but the price you are looking for may not have reached. So you would not buy/sell at that price would you?

This does not differ with DEX or CEX. With time even CEXs use zero confirmation deposit and adjust withdraw amounts to pool enough fee for a fast transaction.

But that is true for both types of exchanges. And if you have not yet completed your trade, you will have to leave orders open for longer periods of time. Or risk losing out when trying deposit during a pump and the price goes sideways in the meantime. Of course it seems like a stalemate here with the trader having to take a lot of risk. But it is what it is.