Are exchanges causing too much centralization?

[Playerino]

Hi all. New here. Bitcoin was created with an underlying concept of decentralization. It was hard to convert dollars and other currencies into bitcoins, so exchanges were born, but now, if Coinbase adds a new cryptocurrency to the platform, prices for the cryptocurrency goes up? That's not cool. Too much power. Coinbase and others are becoming these huge businesses that in my opinion should never exist. How do we make exchanges obsolete? Thoughts?

[totnaksquad]

Hi all. New here. Bitcoin was created with an underlying concept of decentralization. It was hard to convert dollars and other currencies into bitcoins, so exchanges were born, but now, if Coinbase adds a new cryptocurrency to the platform, prices for the cryptocurrency goes up? That's not cool. Too much power. Coinbase and others are becoming these huge businesses that in my opinion should never exist. How do we make exchanges obsolete? Thoughts?

Because coinbase listing is a big impact for the users,coinbase is the based on u.s where financial institution like wallstreet and cme are there too.

[bitorama]

that's why we need some decentralized exchanges

[fiulpro]

I do think that it's something thats inevitable because that's an essential part and without them the bitcoins economy can't function well.

Since they do have a lots of customers then for sure the price will go up with time and yes those big holders does make it a little centralized.

The more bitcoins you have the more power you have over it but that's just how it works.

[QuestionAuthority]

Bitcoin only works as advertised when there are no exchanges.

You make something and sell it for bitcoin. You take the bitcoin and buy the supplies to make more of what you sell and pay your bills in bitcoin with your profit. That’s the way an economy works. Bitcoin has no economy because of the exchanges.

The minute someone buys a product with bitcoin, BitPay exchanges it for dollars and deposits the dollars in the sellers account. That’s the way to keep the dollar economy going, not the way to build a bitcoin economy.

The problem is, no one really wants bitcoin to work as advertised. No one cares if they can perform a financial transaction without the need for a trusted third party. All any of the worthless fuckers using bitcoin right now care about is getting rich in dollars. Centralized exchanges are necessary for getting rich in dollars. They will always be around.

[MiningSensei]

Of course, the customers, the huge customers that they have, it is all a HUGE centralized system, it is just like another "blockchain" of customers and huge manipulation.

Since they do have a lots of customers then for sure the price will go up with time and yes those big holders does make it a little centralized.

The first example of all this shit, is just what Coinbase did with Bitcoin cash; the incredible pump+advertising+and trying to bring the masses to that coin.

The more bitcoins you have the more power you have over it but that's just how it works.

That is why i am always trying to avoid exchanges at all cost, they all are the same crap trying to do shady things to make their pocket's look bigger than what they were before.

[cozk]

Yes.

And most require your driver's license and passport. Wtf.. seriously

[ihaveaquestion]

The only centralization that they have, is just that you are going to put money in a place that they are asking you to provide all your  information.. Id's, licenses, proof's of residence. That is why i am always looking for exchanges who are never requiring this, just like KuCoin.

[poor-yorik]

Hi all. New here. Bitcoin was created with an underlying concept of decentralization. It was hard to convert dollars and other currencies into bitcoins, so exchanges were born, but now, if Coinbase adds a new cryptocurrency to the platform, prices for the cryptocurrency goes up? That's not cool. Too much power. Coinbase and others are becoming these huge businesses that in my opinion should never exist. How do we make exchanges obsolete? Thoughts?

You should look no further than decentralized exchanges. They can hypothetically make regular exchanges obsolete but there is still a long way ahead. There are some efforts to make it happen faster, I mean projects like BitShares or Waves but they are not very popular as of yet. Perhaps, their time simply hasn't yet come. We need to fix Bitcoin first.

[bribed]

Yes indeed, this is a major problem in the cryptocurrency space. The exchanges force people who seek decentralization into a centralized system again. The major problem of this is the power that the exchanges are given, this is like an incentivization to do some shady stuff, as most exchanges around do, no doubt about that.
Im totally into decentralized exchanges and the benefits that those bring to people. Really looking forward for them to take the centralized ones out of business, rather sooner than later! Another great thing is the atomic swap, but this is still next level. But it will come!

[figmentofmyass]

Bitcoin only works as advertised when there are no exchanges.

You make something and sell it for bitcoin. You take the bitcoin and buy the supplies to make more of what you sell and pay your bills in bitcoin with your profit. That’s the way an economy works. Bitcoin has no economy because of the exchanges.

The minute someone buys a product with bitcoin, BitPay exchanges it for dollars and deposits the dollars in the sellers account. That’s the way to keep the dollar economy going, not the way to build a bitcoin economy.

The problem is, no one really wants bitcoin to work as advertised. No one cares if they can perform a financial transaction without the need for a trusted third party. All any of the worthless fuckers using bitcoin right now care about is getting rich in dollars. Centralized exchanges are necessary for getting rich in dollars. They will always be around.

i think this sort of price speculation is natural. we see it with other technologies (via the companies building them). investors are speculating on future development and utility. bitcoin's ecosystem is rather undeveloped. it could never be self-sustaining at this point, especially since it's inefficient to use for everyday transactions. the actualization of a scalable network ready for mainstream adoption is still very far away.

and yes, the exchanges are never going away. but remember, exchanges and futures markets arose for all commodities (including food/agriculture commodities) for a reason. not just to get rich. the market needs price discovery, and producers need to hedge.

[emuLOAD]

It's obvious that if a service that people find useful comes online, demand and ability to satisfy demand increase, pushing Exchange price up.

This is nothing wrong or against the concept of decentralization. Exchanges are indeed centralized and non "ideologically in-line" with the concept of pure decentralization, however I think there is a misconception of what decentralized means.

Mining pools, staking pools, mining farms, investment groups, payment processors... everything that offers a service through an own-Platform will be centralizing the portion of actions that they service, this doesn't centralize bitcoin. The ideal that BTC should be autonomous and impervious to services provided is absurd.

[QuestionAuthority]

Bitcoin only works as advertised when there are no exchanges.

You make something and sell it for bitcoin. You take the bitcoin and buy the supplies to make more of what you sell and pay your bills in bitcoin with your profit. That’s the way an economy works. Bitcoin has no economy because of the exchanges.

The minute someone buys a product with bitcoin, BitPay exchanges it for dollars and deposits the dollars in the sellers account. That’s the way to keep the dollar economy going, not the way to build a bitcoin economy.

The problem is, no one really wants bitcoin to work as advertised. No one cares if they can perform a financial transaction without the need for a trusted third party. All any of the worthless fuckers using bitcoin right now care about is getting rich in dollars. Centralized exchanges are necessary for getting rich in dollars. They will always be around.

i think this sort of price speculation is natural. we see it with other technologies (via the companies building them). investors are speculating on future development and utility. bitcoin's ecosystem is rather undeveloped. it could never be self-sustaining at this point, especially since it's inefficient to use for everyday transactions. the actualization of a scalable network ready for mainstream adoption is still very far away.

and yes, the exchanges are never going away. but remember, exchanges and futures markets arose for all commodities (including food/agriculture commodities) for a reason. not just to get rich. the market needs price discovery, and producers need to hedge.

Read all the posted links in this thread and you’ll see that this isn’t natural.

https://bitcointalk.org/index.php?topic=2705112.msg27666147#msg27666147

[Stellina]

Exchange DEEX will solve this problem. ICO started today!

[vv181]

that's why we need some decentralized exchanges

Agree, many exchanges now getting stricter with personal identification as example Poloniex want your identity verification. I believe this is the right time for decentralized exchanges to shines.

[icanscript]

In the near future, the technology of atomic swaps will solve this problem. P2P payments will replace exchanges, as well as lead to a decrease in the amount of crypto currency.

[figmentofmyass]

i think this sort of price speculation is natural. we see it with other technologies (via the companies building them). investors are speculating on future development and utility. bitcoin's ecosystem is rather undeveloped. it could never be self-sustaining at this point, especially since it's inefficient to use for everyday transactions. the actualization of a scalable network ready for mainstream adoption is still very far away.

and yes, the exchanges are never going away. but remember, exchanges and futures markets arose for all commodities (including food/agriculture commodities) for a reason. not just to get rich. the market needs price discovery, and producers need to hedge.

Read all the posted links in this thread and you’ll see that this isn’t natural.

https://bitcointalk.org/index.php?topic=2705112.msg27666147#msg27666147

were the bubbles in 2011 and 2013 "natural?" for that matter, is the never-ending bull market in US stocks "natural?"

one of my old trading mentors told me something years ago. he said that "all markets are scams" and explained that every market functions the same way. major players (institutions, whales) just replay the wyckoff cycle over and over. they have endless USD to hold the market up during its accumulation phase. then once they have cornered the market, they can easily mark up the price. this happens with tech stocks all the time.

but regardless of price manipulation, you have to admit: the market is still the market. prices reach certain heights because buyers are willing to pay that price. as such, i don't care if the "willy bot" was responsible for the 2013 bubble. even if people were "manipulated" into buying higher, adequate liquidity always existed to prevent a drop to zero. and here we are, 4+ years later and more than 10x higher.

i don't fight the market. it's completely irrational, but being irrational is the best way to make money in herd markets.

[neite99]

the reasons that you provided are logical but in any case when something is born it is overtaken by the huge companies and when they take it they just focus on profit as well as people.

[Cryptoshops]

Bitcoin only works as advertised when there are no exchanges.

You make something and sell it for bitcoin. You take the bitcoin and buy the supplies to make more of what you sell and pay your bills in bitcoin with your profit. That’s the way an economy works. Bitcoin has no economy because of the exchanges.

The minute someone buys a product with bitcoin, BitPay exchanges it for dollars and deposits the dollars in the sellers account. That’s the way to keep the dollar economy going, not the way to build a bitcoin economy.

The problem is, no one really wants bitcoin to work as advertised. No one cares if they can perform a financial transaction without the need for a trusted third party. All any of the worthless fuckers using bitcoin right now care about is getting rich in dollars. Centralized exchanges are necessary for getting rich in dollars. They will always be around.

Yep people dont realize Bitcoin is now fuelled by Fiat money because that is all most people do with it now,  is buy and sell using Fiat money to make more Fiat money for themselves.  So in reality it is being controlled by Fiat money and not its own decentralised system which is  what it was ment to be.

[QuestionAuthority]

i think this sort of price speculation is natural. we see it with other technologies (via the companies building them). investors are speculating on future development and utility. bitcoin's ecosystem is rather undeveloped. it could never be self-sustaining at this point, especially since it's inefficient to use for everyday transactions. the actualization of a scalable network ready for mainstream adoption is still very far away.

and yes, the exchanges are never going away. but remember, exchanges and futures markets arose for all commodities (including food/agriculture commodities) for a reason. not just to get rich. the market needs price discovery, and producers need to hedge.

Read all the posted links in this thread and you’ll see that this isn’t natural.

https://bitcointalk.org/index.php?topic=2705112.msg27666147#msg27666147

were the bubbles in 2011 and 2013 "natural?" for that matter, is the never-ending bull market in US stocks "natural?"

one of my old trading mentors told me something years ago. he said that "all markets are scams" and explained that every market functions the same way. major players (institutions, whales) just replay the wyckoff cycle over and over. they have endless USD to hold the market up during its accumulation phase. then once they have cornered the market, they can easily mark up the price. this happens with tech stocks all the time.

but regardless of price manipulation, you have to admit: the market is still the market. prices reach certain heights because buyers are willing to pay that price. as such, i don't care if the "willy bot" was responsible for the 2013 bubble. even if people were "manipulated" into buying higher, adequate liquidity always existed to prevent a drop to zero. and here we are, 4+ years later and more than 10x higher.

i don't fight the market. it's completely irrational, but being irrational is the best way to make money in herd markets.

You didn’t read any of the links. Go read about Tether and you’ll know what I’m talking about.

https://www.biznews.com/global-citizen/2017/12/06/bitcoin-bitfinex-tether-risk-crashing/