Bitcoin Forum

Decentralized currencies but centralized trading, that's the reality.

And a study that shows that once again, according to this report (https://coinmetrics.substack.com/p/coin-metrics-state-of-the-network-9b9), 4 exchange platforms share 90% of the Bitcoin's trading volume (Coinbase, Bitstamp, Bitfinex et Kraken). (It also reminded me of an old article showing that 2/3 of the transactions were related only to trading activities by the way.)

What's the point of using a decentralized currency if next to it people use a centralized platform for trading? Oh I know, follow the money...
This shows that people are not really interested in decentralization and that the P2P trade/trading/payment methods cannot develop properly. If there is no demand there will be no supply and the ecosystem cannot evolve correctly.
(I'm not even talking about the fact that the majority is only interested to speculate)

The question also arises as to the future of these platforms which are acquiring more and more influence over the years, such as Binance or Coinbase for example, which are buying up companies or introducing much broader products than a simple trading platform.

Doesn't that remind you GAFA? (to compare)

We are no longer in 2013 where users had little choice. We have everything we need, more or less, to do without them.
Keep using centralized exchanges and complete the KYC, in less than 10 years they all will be hated.

https://cdn.substack.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fbucketeer-e05bbc84-baa3-437e-9518-adb32be77984.s3.amazonaws.com%2Fpublic%2Fimages%2F2126c297-ca30-472e-84b5-9a9493d500d0_960x576.png

Some of the biggest reasons for this are the inadequate demand and the lack of a truly user-friendly decentralized exchange. Many exchanges, which claim to be decentralized, have been centralized on some tokens such as; Ethereum or Neo. In addition to this, there is no decentralized exchange that people can buy Bitcoin via FIAT money outside of Bisq exchange. Also, I cannot even use Bisq in my country because the Tor network is banned. Who would prefer a difficult way if there is an easier way? No one.

Part of the problems is lack of adherence to principles, and we don't actively and genuinely discourage these weak points of Bitcoin/crypto. People want to be rich/wealthy at the expense of the network. (you can still be rich running  well decentralized businesses, why not).

It's almost becoming a taboo to promote decentralization and proper use of cryptocurrency. If care is not taken, the wonderful features of real Blockchain/crypto will be chipped away little by little until they find themselves using a completely different tech that is totally centralized and controlled by those/things it was created to avoid/prevent. This is how nations deteriorate after being founded by good founding fathers and with good principles.

Well, that's pretty much the reason, and I don't think we should expect things to change anytime soon. The cryptocurrency markets as a whole is pretty much a casino in the first place, and just like gambling on a casino, it can be quite addictive. People really wouldn't care about hard money and self sovereignty because most are currently not being threatened by the consequences.

This is one of the reason why people also like centralized exchange. Lets agree that more people are after some trading money and earnings.

I am also using dex but what my needs for trading cant really found there. Like using future contracts. I like doing stocks trading and when I learned it I am fond using the platform of Binance.

Also another thing is liquidity and volume. Dex and cex comparison, decentralized market or exchanges is really behind by those markets. Sad fact but this will continue, its not that I dont like decentralized application but also fond of doing trading using those cex that has better feature than dex.

This is a direct result of people opting to trade on centralized exchanges over DEXes. If traders on an exchange increases the volume of currencies they hold will increase, along with its Liquidity. However the more popular centralized exchanges get the more centralized the global trading volume becomes.

Exchanges are strictly regulated, by financial establishments and anyone not conforming to guidelines will usually be tagged risky dissuading traders from using such platforms. While people patronize centralized platforms which are more susceptible to hacks and leaks.

But it's not just a problem of people wanting to be rich, like you said it's nothing wrong you can still be rich running decentralized businesses. The problem is people aren't ready yet to take control of their own money. Or take responsibility for their own life. They want to be taken care of.

Both LocalCryptos and Hodl Hodl, like Bisq, also have no KYC and support trading between bitcoin and various fiat methods.

There are multiple ways to access Tor even if it is banned or restricted by your government, ISP, institution/company/university/school/etc. Tor bridges are unlisted relays which are generally not blocked or restricted, and beyond that, you can use pluggable transports which obfuscate your data to hide the fact you are using Tor. See here for more information: https://2019.www.torproject.org/docs/bridges.html.en. You can also connect first to a VPN based outside your country to encrypt all your traffic first, which again, will unblock and hide the fact you are connecting to Tor.

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The bottom line here is convenience. Privacy is a commodity to be traded, and the majority of people are happy to trade it for the slightest convenience. Alexa is listening, recording, and analyzing every word I say to build a profile on me? Well, that's OK so long as I can say my shopping list out loud rather than God forbid I have to write it down! Google is monitoring everything I do online, every page I visit, every search I make, and reading every communication I make? Well, that's OK so long as it gives me a reminder for my appointment rather than God forbid I have to remember it myself! Facebook is building a complete profile of everything I say, do, eat, drink, share, like, view, go, visit, travel, etc., and using that data to build a complete profile of me they can sell to advertisers, political companies, and governments? Well, that's OK so long as I can share photos of my cat.

As much as I advocate for only using decentralized peer-to-peer trading, I obviously can't argue that it is as convenient as centralized exchanges. People care about convenience, and are all too happy to give up their privacy, give up their identity, give up the security of their KYC documents, and give up control over their own money to get it.

Unfortunately, by the time most people realize how valuable their privacy is, it's too late. It is far far harder to reclaim your privacy once you've let all these various companies invade you life.

At least for today there are no strict rules for regulating the activities of cryptocurrency exchanges, and therefore, every trader can remain incognito subject to certain rules. All cryptocurrency exchanges provide the opportunity to trade for example coins such as Bitcoin or Ethereum, while many exchanges do not require verification from the trader. therefore, a trader can trade decentralized currency on a centralized exchange without any obstacles if he complies with the rules on minimum daily cash withdrawals. In addition, if we are talking about cryptocurrency trading using the final funds, then in this case, a bank card can be linked to an account and, accordingly, the provision of KYC will be mandatory.
But anyway, there is still a little time left until the government realizes that a centralized monetary system based on the issue of central banks is already considering its last years to fall.
In addition, I would like to note that if decentralized exchanges are demanded by traders on the cryptocurrency market in the future, then their existence will continue in any case and no government will affect their activities, since in fact they are not based in anyone’s jurisdiction physically.

We do have a lot of choices but then we prefer to stick to the exchanges where we can make money the most. Decentralization is compromised by big exchanges that asks the mandatory documents from us. If most of the BTC is going to be owned by institutions who once reign the financial system before Bitcoin then we are back to the old system again.  By the time we realize it, we may only reason there are other coins out.

+1 to that.

No one is going to use the decentralized exchanges that have low liquidity, high spread, high barrier to entry (bisq with the limits on trading), and horrible UI.

While not many hardcore people care about that, the new people are going to care about all of that A LOT. They want to be able to call someone or email someone if they're having an issue. They want everything to be laid out nicely and for the UI to be nice.

That's the world we live in. I still think it is important to build these decentralized exchanges for the hardcore people who want the privacy and the control over funds which is VERY important.

Is TOR needed for Bisq?

You can provide parameters for your TOR to work whenever its ban in your country.  The Socks, Proxy IP address, port, and authentication information are always in the manual and you can always find help, the internet is for all. Deeponion forum has great helpful users of TOR.

One thing that you should think of is that if you figured how to use Bitcoin exchanges and its wallets, it's never difficult for you to use any DEX GUI since they all work the same way. Its like learning the old 2010 phone and suddenly you have a new 2020 phone.

Most people are using a decentralised currency to make more dollars. That's the only reason they're here. They will go to the places that allow them to do that with the least ball ache and with the most options to maximise the trades that get those dollars.

If Bitcoin required you to install a video camera in your face with a live link to the NSA many would do it if they believed the returns would be unchanged or better.

Very few care about its principles. Luckily many that do are in positions to guard it.



I think that's the important one. The choice should always be open to you if and when it dawns on you. I can't see it being anything more than a weird little niche for a long time to come though.

Yes. Bisq runs its own peer-to-peer protocol over Tor.

Well, because we do not trust the dex exchanges? I mean they are really not looking all that well whereas the centralized trading looks very trustworthy. All those billions of dollars worth of bitcoin lost because of small exchanges being "hacked" made everyone go enough! and they said they will move their money to places they trust as well. Hence we have very little amount of exchanges that we trade with, who cares about some small exchange when I know that my money will be safe with these websites?

There is really not even a single reason to move to another exchange if you can find your pairs here and trade here. The only reason you should go to another website is if they have the coin you want to trade and the big ones do not have that coin since it probably sucks.

Personally, I trust DEX more than the CEX (Centralized Exchange). It is just that CEX has more opportunities to earn because of good volume and liquidity and a lot of features to choose from like on Binance, they have binance futures, options, and many more features, and DEX does not have it. I was trading on DEX before it feels like stagnant my orders do not fill that fast compared to CEX, and most DEX has limited coins to trade. That's is the main problem of DEX.

For me at least a decentralised exchange needs to build trust in exactly the same way Bitcoin has before I'd look deeper. I'd want to see years of abuse and heavy battle testing. You need to know the core product is rock solid because you won't have anyone to go crying to if it screws up.

Proper ones may not be custodial, but there's still a lot of scope for things to go wrong with the domain or hosting being hijacked, Bisq having that recent code problem, and then there are the ones that sprang KYC on people.

Their lack of significance means they'll be far down in terms of scrutiny and development competence too. Right now they feel like something I'm going to let others iron out the problems before I consider it.

I think you think that I said speed, instead of what I actually said, which was SPREAD. I'm talking about the fact that you're not going to get as good of prices on a dex as you're going to get on a cex.

Tor isn't an issue, I mean for some I guess it could cause some speed issues, but nothing that people aren't used to waiting for IMO.

And no, there are many DEX's with many different GUI's -- ETH has tons and tons of them.

It's just as you have said it - they follow the money. They are rushing into cryptocurrency and they are buying and selling it because they are simply interested in the money they will be able to make and decentralization and centralization is not something they care to know about, they just want that money.

Centralized exchanges are the most popular exchanges in the cryptocurrency market and I won't really blame people because they say that these centralized exchanges are the easiest to use. You can take a look at Coinbase, the interface and everything about it is simple and easy to use and understand. That's unlike decentralized exchanges that are quite complex and limited to only tokens. People value conveniences/ease-to-use more than anything else, it seems.

What? Which centralized exchanges are trustworthy? Even the biggest and most well known exchanges have been hacked and had coins stolen, been hacked and had private information and KYC documents stolen, been caught insider trading, sold customers' data to third parties, handed over customers' data to various governments, listed various scams and shitcoins to dump on their customers, locked and frozen accounts without warning, stolen funds, the list goes on, and on, and on. Centralized exchanges are anything buy trustworthy.

The vast majority of "small" exchanges which are hacked are centralized exchanges. This is not an argument against DEXs. Most of the time, when trading with DEXs, your funds are still under your control and so can't be hacked in the same way that a centralized exchange can be.

There are plenty of reasons to change exchanges. When Coinbase revealed that they sell your data to a variety of unknown third parties without your consent, and they formed a partnership with a company who develop and sell surveillance software to human rights abusing dictators, everyone with a shred of sense should have stopped using them immediately.

Exchange will always be the last platform that we need since bitcoin does has not gain a massive adoption yet.
People will still rely on fiat as everything can be purchase with fiat, and you are right "Decentralized currencies but Centralized trading", that's the norm even in the future as bitcoin can never beat fiat in terms of adoption.

Bitcoin has always been an alternative as payment system, let's accept the reality.

Unsure if we're reading the same news articles and stuff here, though this is what I've found from CoinBases own website - https://help.coinbase.com/en/coinbase/privacy-and-security/data-privacy/gdpr-data-request-faq.html - regarding their usage of your data. Take that as you will, but the news stories that have come out recently (if you're referring to those) are talking about a blockchain surveilance / crypto tracking tool that they've offered to sell the usage to the DEA / IRS.

They're not just going ahead and sending your tax data to the IRS -- that wouldn't be legal unless you're under some sort of audit and the government got a subpoena for that, or if you hit the threshold to be issued a 1099.

That's exactly what happened 2 years ago. Coinbase sent the details of over 13,000 of their customers directly to the IRS, and told the customers affected to "seek legal advice" - https://help.coinbase.com/en/coinbase/taxes-reports-and-financial-services/taxes/irs-notification.html

And a year ago, one of Coinbase's executives Christine Sandler admitted user data was being sold to third parties: https://news.yahoo.com/coinbase-former-provider-sold-user-084900709.html. This was at the same time they partnered up with the surveillance company Neutrino/Hacking Team. There's a good write up here of just how immoral these people are: https://breakermag.com/coinbases-newest-team-members-helped-authoritarians-worldwide-monitor-journalists-and-dissidents/.

The most recent news (which I actually hadn't read yet when I made that last post), is just as concerning as the above. These same people inside Coinbase who made monitoring software for dictators are now working with the US government. Given their previous atrocious history, it's not exactly a huge leap to suspect that some user data is going to change hands here.

Ah. I was assuming that you had been talking about the most recent neutrino news stories. But yeah, there are a good deal of stories regarding Coinbase doing this and doing that and being the devil incarnate (/s obviosuly)

Though I think it's important to note that when discussing the 13k customers that were sent to the IRS -- They had fought in court to bring that number down from 500k that the IRS had initially requested. The new criteria (which the 13k people fit within) and the court agreed with was 200 transcations and 20k in volume in one year (https://help.coinbase.com/en/pro/taxes-reports-and-financial-services/taxes/1099-k-tax-forms-faq-for-coinbase-pro-prime-merchant) Which is a typical number for transcations.

Totally not a fan of the data selling to third parties, though I see you can opt out of that stuff here - https://help.coinbase.com/en/coinbase/privacy-and-security/data-privacy/gdpr-data-request-faq.html - though I mean, if it's already been sold what good is that, lol.

Not trying to play devils advocate here, just want people to know all the facts.

Either way, Coinbase / Gemini are it for a good amount of people in the US (Kraken and Binance US for some states, not all though)

You're right. Additionally, I see governments create a part of difficulties for cryptocurrencies to achieve their goal. They wanna keep their fiat money in the market without letting anything replacing it. The cryptocurrency was founded to be a new method of payment worldwide, however, it's now more like a casino (like you said) or a stockmarket where people take advantage of it to earn profits. It's not wrong that we earn profits based on cryptocurrency but it's sad to say that the cryptocurrency market's value has changed.

The mere fact that you have to "opt out" of them doing whatever they like with your data is bad enough as it is. They also have a clause which permits them to continue to hold and use your data subject to "regulatory retention or record keeping requirements", which is essentially carte blanche to do what they like. gentlemand also pointed out to me in another thread (https://bitcointalk.org/index.php?topic=5253616.msg54578939#msg54578939) yesterday that even the EU's GDPR contains a similar clause to allow "financial institutions" to continue to hold your data.

You should assume that any data you give to a centralized exchange such as Coinbase will never be deleted from their servers, because in all likelihood, it won't be.

I've never used either, and have no problems exchanging bitcoin to fiat and vice versa using peer to peer trades or DEXs.

Oh that wasn't me endorsing the fact that 'everything is okay because they let you opt out' that's totally not what I meant in saying all of that. It was just something that people should be aware of, and it COULD help in terms of privacy. But yes -- even the most strict laws relating to privacy (like the GDPR) are going to let financial institutions keep data for AML/KYC reasons.

If you don't mind me asking, what are the spreads and fees like on the DEX's that you're working with? I've found that to be a common problem on these platforms.

The spreads are very variable, and fluctuate markedly depending on which fiat or altcoin you are trading for, which fiat methods you are willing to use, how much of a hurry you are in, and what offers are on the platform at the time. Usually in the region of a few percent. Since I am rarely in a hurry and very patient with my trades, if I am buying BTC I usually end up paying around 1% above market rate, but if I am selling I can get around 3-5% above market rate.

Fees are pretty reasonable. Bisq currently has a 0.2% maker fee and 0.6% taker fee, but you can cut those in half of more if you pay using BSQ token. You also pay a security deposit which you get back in full following a successful trade, and a mining fee of a couple thousand satoshi. LocalCryptos has a 0.25% maker and 0.75% taker fee.

it is pretty sad but the truth remains that most decentralized exchanges(DEX) are difficult to use and limited to spot trading whereas centralised exchanges (cex) has spot trading, futures and lending too just like the case in Coinex , the options are more in centralized exchanges. Although newer dex are being built to meet to current demand, you might want to try out coinex.net, a dex, and see how the dex ecosystem is fairing.

Talking about KYC, I know of https://changenow.io/ where you don't really need your personal details to make crypto/crypto exchange. I use that most of the time and it is effective for anonymous swaps.

The issue that I have with decentralized exchanges is that they’re not really user-friendly. Despite that it removes such things like KYC, the trading costs are high and transactions are kinda slow due to order books that are under off-chain/on-chain. Cancellation of orders are expensive, trade failure situations and limitations of order types like more complex orders that cannot be created anymore which relies on third party assistance such as stop-loss or so.

Even though it has some advantages like security, custody, listing diversification, etc., I would rather go for CEXs for trading purposes. Despite that we don’t have the custody of the coins and tokens we have or KYC requirement in the CEXs, the trading fee is cheap and transactions are fast. They’re just vulnerable to hacks though, so it’s up to them to implement out-of-the-box security features that would make the hackers or intruders having hard time to breach the platform.

I do not get all this need for a decentralized exchange, do you really need it? What will be the purpose of it? I understand that money is decentralized in bitcoin world but even that is not decentralized anymore, look at all the ICO's and IEO's and all that, project owners print out hundreds of millions of tokens and give you some millions and call it decentralized, well it is not, they make changes on it like crazy and people accept it and just continue. How could that be decentralized?

Even currencies are not decentralized so whats the point of an exchange to be decentralized. The difference between currency and exchange is that currency is the thing you use to buy something, exchange is a company, it is a business, a business doesn't have to be decentralized at all.

So I can keep control of my own coins. So I don't have to give away my privacy by submitting to ridiculous KYC requirements. So I don't have to risk having my identity stolen by an exchange selling or being hacked for my details. So I don't have a centralized exchange tracking all my deposits and withdrawals. So I don't have someone else telling me what I can and cannot do with my own money. So I can trade safely, securely, privately. So I don't have to trust a third party - the entire point of bitcoin in the first place.

99.9% of ICOs and IEOs (and altcoins and tokens) are centralized scams. However, this impacts not at all on the decentralization of bitcoin.