Centralized and Decentralized Digital Asset Exchanges, What You Need to Know
A cryptocurrency digital asset exchange is a website where investors can buy and sell cryptocurrencies for other cryptocurrencies or for fiat money such as USD and EUR. Coinbase, the biggest exchange in the U.S., has a valuation of over $1 billion. Kraken is a cryptocurrency exchange that has its headquartered in San Francisco, California. The exchange has been in business for six years, and has the largest daily trading volume for the Bitcoin/Euro pair. The exchange offers trading in several fiat currencies including USD and EUR and several cryptocurrencies including BTC, ETH, ETC, DASH, GNO, ICN, Litecoin, MLN, Monero, REP, Ripple, Zcash, and Stellar. Poloniex, on the other hand, is a cryptocurrency exchange that does not allow fiat deposits and withdraws. Therefore, customers must purchase cryptocurrencies from other sellers and then deposit cryptocurrencies on the exchange before they can begin trading. Huobi is a leading global cryptocurrency exchange consisting of an OTC marketplace, Huobi Autonomous Digital Asset Exchange (HADAX), Huobi Pro, Huobi China, and Huobi Mining Pool. Huobi Global currently users in more than 130 countries and has offices in Singapore, the United States, Japan, Korea, and Hong Kong.
There are a number of advantages for using centralized exchanges. For one, there is much better liquidity for traders looking to make expedited trades without risking leaving open buy or sell orders for a long time which poses a heavy risk otherwise. Moreover, centralized exchanges allow for simplicity and ease of use for their customers. User interface is huge when I choose an exchange to use. Additionally, centralized exchanges strictly adherence to regulations and respective laws for each country. This is in opposition to decentralized exchanges which do not have a specific country of residents and could make up their own rules and regulations, leaving users with little peace of mind and, at times, utter frustration. Finally, centralized exchanges come with speedy transaction. No more waiting several hours, or perhaps days, for orders to be fulfilled on other exchanges. Huobi, is another centralized cryptocurrency exchange, which has instantaneous transaction times among other benefits.
The decentralized exchange (DEX) ecosystem is still very much in its infancy, but there are some that are already usable. Most of the interfaces are still clunky and there aren’t dedicated companies or teams working on all of these to provide customer support when required. As DEXes rely on recording transactions directly on the blockchain, the transaction speeds are far lower than what a centralized exchange might provide while also resulting in higher fees during peak times. Together, these factors also result in significantly lower volumes being traded across these exchanges. Some examples of these exchanges are: Bisq Network, Bitshares, and Etherdelta. 0x (Zero X), for example, aims to provide an open protocol for decentralized exchanges on top of Ethereum. These exchanges shift back control of funds and trades to the user and they eliminate the single point of failure. A secondary effect is that government taxation or fund confiscation can become nearly impossible. This can arguably have profound long term consequences to macro-economic and geopolitical landscape.
There are a number of advantages for using decentralized exchanges as well. For one, security is top notch, as all the asstets and information are decentralized and not controlled by one person or entity. Moreover, decentralized exchanges are anonymous which protects users from governments and other regulatory bodies. However, there is a downside as well. Recently, Bancor, a decentralized exchange had lost $23.5M USD of ETH, NPXS and BNTC due to hackers breaking in and stealing funds. Questions arose whether Bancor was actually a decentralized exchange or not. For one, they were able to freeze users accounts and removed large amounts of money from their exchange to prevent further thievery. In other news, Bancor raised $153 million dollars in July 2017 in a span of few hours making it one of the largest ICO’s ever.
You can also find Huobi online at:
Website:
https://www.huobi.pro/ Twitter:
https://twitter.com/Huobi_Pro YouTube:
https://www.youtube.com/channel/UCABkgL5rRAk61E2Qtjtqcxw/featured Instagram:
https://www.instagram.com/huobipro/
