Decentralized Exchanges - The Next Frontier

[SonoCoin]

Before the scam artists, billions of dollars and wild speculation, cryptocurrencies were set out to empower people by decentralization - a term misused and underappreciated by many. Bitcoin has provided us with the first stepping stone in what will be an uphill battle against the corruption, oppression and greed of financial institutions and governments alike. We've come a long way, but the battle has only just begun. As long as we rely on centralized exchanges as gateways, we continue to deprive ourselves of a truely decentralized means of exchange.

It is only a matter of time before the technology catches up to our needs - and when it does, governments will shake.

Decentralized exchanges will need to find ways to integrate atomic swaps, smart contracts and fiat currencies in order to compete with today's exchanges. Decentralization will make it virtually impossible for governments to regulate and allow users to transact completely anonymously while spending almost nothing on trades.

Progress becomes increasingly important with every hack and shut down of centralized exchanges.

Let's do our best to raise awareness and support decentralized exchanges. Don't underestimate the change.

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[Hydrogen]

Before "The Pirate Bay" shut down, there was talk of hosting micro servers hosting files inside drones that were built to stay in the air for prolonged periods of time in an effort to escape regulation and government shut downs. I could imagine someone hosting a crypto exchange in a similar manner. Maybe host a crypto exchange on a boat or island in international waters where theoretically there are no governing bodies as no single nation has "jurisdiction" over the territory.

I'm certain there are many loopholes which might be exploited. Given the crackdowns on silk road(Ross Ulbricht aka Dread Pirate Roberts), alpha bay, megaupload(Kim Dot Com), pirate bay, ninja video(if anyone remembers them) and others. Somehow I doubt anyone will go that far.

It would be cool if someone was that crazy though. I wish I had the resources. I probably wouldn't do it but if the right loophole could be found--it is possible to set up a deregulated(decentralized?) crypto exchange, in theory.

[xdrpx]

A decentralized exchange is certainly the next step towards replacing traditional centralized bodies controlled by regulations by the upper hand. I've had a question pertaining to how current existing decetralized exchanges [For example: Bisq and Bitshares] operate and their possible risks of usage once regulators find out that things are happening behind their backs:

Most of the current decentralized exchanges have sellers making use of centrally controlled payment gateways to let others buy from them, like Skrill and Payoneer. It makes tracking transaction history simpler for any banks and possibly with larger volumes over time could this raise a red flag? Also, with this happening will this lead to a decline in sellers from that particular region when a trackdown happens?

Maybe, a lightning network implementations and Atomic swaps would make it possible to exchange instantly between assets that support it, meanwhile the primary asset used for the medium of exchange will have to be procured via Cash [Face-to-Face] as this seems the most anonymous way to get the deal done, but there's a huge risk for the buyer and the seller here in terms of kidnappings and what not. Another way to lure around this would be to buy from multiple sellers, using different payment methods to not alert regulators or your banks if they did intend to track your purchases.

[Mr. Net]

Before "The Pirate Bay" shut down, there was talk of hosting micro servers hosting files inside drones that were built to stay in the air for prolonged periods of time in an effort to escape regulation and government shut downs. I could imagine someone hosting a crypto exchange in a similar manner. Maybe host a crypto exchange on a boat or island in international waters where theoretically there are no governing bodies as no single nation has "jurisdiction" over the territory.

I'm certain there are many loopholes which might be exploited. Given the crackdowns on silk road(Ross Ulbricht aka Dread Pirate Roberts), alpha bay, megaupload(Kim Dot Com), pirate bay, ninja video(if anyone remembers them) and others. Somehow I doubt anyone will go that far.

It would be cool if someone was that crazy though. I wish I had the resources. I probably wouldn't do it but if the right loophole could be found--it is possible to set up a deregulated(decentralized?) crypto exchange, in theory.

Google has floating servers, located in international waters, not really subject to any specific jurisdiction.

Or you could just encrypt all of the internet communication. Tor is slowly getting there, but we'll need faster computers or more efficient encryption in order to make this a reality.

[staywoke081]

We are trending towards decentralized exchanges but they are only going to work if people get fed up with the status quo and go there. We have a good shot because Bitcoin represents everything the governments hate and despite in a currency but I am not convinced most people will make the switch right away. Eventually they may, but only because they realize they are still being surveyed under the current system, not because it was the right thing to do. As long as it gets done though, I am game for it!

[boonsterx]

With all the regulations as well as hits by hackers against centralised exchanges, it is only a matter of time that decentralized exchanges will become the defacto exchanges used by anyone.

I am eagerly waiting to see the prototype of decentralized exchanges and be the first to trade on the decentralized exchanges.

[jaysabi]

Before the scam artists, billions of dollars and wild speculation, cryptocurrencies were set out to empower people by decentralization - a term misused and underappreciated by many. Bitcoin has provided us with the first stepping stone in what will be an uphill battle against the corruption, oppression and greed of financial institutions and governments alike. We've come a long way, but the battle has only just begun. As long as we rely on centralized exchanges as gateways, we continue to deprive ourselves of a truely decentralized means of exchange.

It is only a matter of time before the technology catches up to our needs - and when it does, governments will shake.

Decentralized exchanges will need to find ways to integrate atomic swaps, smart contracts and fiat currencies in order to compete with today's exchanges. Decentralization will make it virtually impossible for governments to regulate and allow users to transact completely anonymously while spending almost nothing on trades.

Progress becomes increasingly important with every hack and shut down of centralized exchanges.

Let's do our best to raise awareness and support decentralized exchanges. Don't underestimate the change.

What does a decentralized exchange even look like and what application does it have? Exchanges are centralized out of necessity, someone to take the initiative to create the infrastructure that allows market makers and market participants to conduct trade. How does that function in a decentralized mechanism? Outside of this central question, this post is contains the unfortunate meaningless fluff about shaking governments and yada yada that is typical of this community in particular and which it would be better off without.

[audaciousbeing]

Before the scam artists, billions of dollars and wild speculation, cryptocurrencies were set out to empower people by decentralization - a term misused and underappreciated by many. Bitcoin has provided us with the first stepping stone in what will be an uphill battle against the corruption, oppression and greed of financial institutions and governments alike. We've come a long way, but the battle has only just begun. As long as we rely on centralized exchanges as gateways, we continue to deprive ourselves of a truely decentralized means of exchange.

It is only a matter of time before the technology catches up to our needs - and when it does, governments will shake.

Decentralized exchanges will need to find ways to integrate atomic swaps, smart contracts and fiat currencies in order to compete with today's exchanges. Decentralization will make it virtually impossible for governments to regulate and allow users to transact completely anonymously while spending almost nothing on trades.

Progress becomes increasingly important with every hack and shut down of centralized exchanges.

Let's do our best to raise awareness and support decentralized exchanges. Don't underestimate the change.

Decentralization is eventually the goal and eventually before we get to that point, I must say its not going to be an easy ride and the reason for that is the threat that it will pose the traditional way of doing things and government will not allow that without a fight and the fear is how strong the battle can hold before we all lose it or the population left are not enough to command the eventual victory.

Another fear I have is how to break the gap between the amount of regulation and decency required in other to ensure people play by the rules which cannot to a large extent cannot be guaranteed in a situation of people with different moral values, culture, orientation and education which if pushed further can defeat the entire purpose of decentralization.

[just_Alice]

I agree with you, but unfortunately now too much people see BTC as an income source, but not the weapon needed for freedom. They are even pleased to let BTC banks exist, so it would be closer to legalization and it would more be popular, which will raise the price. That is why BTC is not that decentralized, I mean, we can't say for sure, but for me it seems logical that all the businessmen and big investors bought thousands of Bitcoin, so now it's not govs and banks, but them, who are having the upper hand.

[FrueGreads]

I completely agree with you, but the problem with decentralized exchanges, besides they are still not very easy to use, don't have to much liquidity and normally lag a little, is that they don't offer the possibility to trade with fiat. This is a big problem for them, since this way those exchanges will be limited to virtual currencies. Of course we can then use the normal fiat gateways (normally centralized exchanges like coinbase etc), but if we have to do this, we will still be tied to centralization.

I hope these exchanges get better, but I think we will never achieve true decentralization if we want to trade with fiat as well. Since fiat is unlikely to disappear, complete decentralization is unlikely to ever happen.

[Outlaw79]

I fully support decentralized exchanges. Current ones are taking advantage on us. I heard them saying; in the gold rush, not the gold diggers made the money but the equipment sellers did. So the centralized exchanges are making money from us who are frontiers of crypto world, giving nothing but fear of hack.

[Hydrogen]

Google has floating servers, located in international waters, not really subject to any specific jurisdiction.

Or you could just encrypt all of the internet communication. Tor is slowly getting there, but we'll need faster computers or more efficient encryption in order to make this a reality.

Good point. I forgot google did that. I think part of the reason for that is having server farms floating on a literal ocean of liquid coolant was an interesting experiment they wanted to carry out. Many of googles server farms inland are subsidized by taxpayers and subject to tax breaks. There's no reason for google to fund an international projects like floating server farms on their own when they can do it domestically and have taxpayers foot the bill.

VPN's and TOR encrypt communications. What isn't encrypted is the IP address packets are forwarded to. That could be a limiting factor. Also... I think everyone knows state suveillance is hard-wired into ISP's and sniffs all internet traffic with programs like carnivore and echelon long being in operation.

I'm not certain how secure TOR is. Given the crackdown on the original silk road, which law enforcement claimed they were able to track down due to a "configuration error". And given the 2017 shutdown of alpha bay, silk road 2.0 and all those other TOR based markets. It is possible TOR isn't as reliable or anonymous as it was once considered to be.

[FrueGreads]

Talking about decentralized exchanges anyone knows what happened to etherdelta? I tried using them today, and although I could deposit and withdraw with no problems, their order books were frozen. I couldn't sell or buy any tokens because the information on the orderbooks seems to be outdated, and there was no token to buy or sell. The last trades had happened 5 days ago.

Anyone knows what is going on?

Do you guys know other dex that can be used to ERC20 tokens? I tried IDEX but they want to use high gas fees, and I don't really that.

[wxa7115]

We are trending towards decentralized exchanges but they are only going to work if people get fed up with the status quo and go there. We have a good shot because Bitcoin represents everything the governments hate and despite in a currency but I am not convinced most people will make the switch right away. Eventually they may, but only because they realize they are still being surveyed under the current system, not because it was the right thing to do. As long as it gets done though, I am game for it!

I do not see why it could not happen, after all we are already using bitcoin a decentralized form of currency and many have voiced their opinion against exchanges because exchanges are banks by another name so it is safe to conclude once decentralized exchanges offer most of the features of centralized exchanges the community will use DEX instead.

[FrueGreads]

is safe to conclude once decentralized exchanges offer most of the features of centralized exchanges the community will use DEX instead.

But this is the problem Dex face right now. They don't offer the same features of centralized exchanges. In fact they are miles away from that point, so I really don't know when this will happen. Like I said on the previous post I was trying to use etherdelta today, and I saw no warnings on the site, and everything looked ok, but it wasn't and trades are frozen from the past 5 days apparently. I still think etherdelta is the best Dex we have, but they could at least explained what was going on.

I don't even trade, and I just sell tokens from time to time, but I can see the huge differences that we now have between Dex and normal exchanges. I do hope they get better, because I would much likely prefer to use them, over the centralized ones.

[wxa7115]

is safe to conclude once decentralized exchanges offer most of the features of centralized exchanges the community will use DEX instead.

But this is the problem Dex face right now. They don't offer the same features of centralized exchanges. In fact they are miles away from that point, so I really don't know when this will happen. Like I said on the previous post I was trying to use etherdelta today, and I saw no warnings on the site, and everything looked ok, but it wasn't and trades are frozen from the past 5 days apparently. I still think etherdelta is the best Dex we have, but they could at least explained what was going on.

I don't even trade, and I just sell tokens from time to time, but I can see the huge differences that we now have between Dex and normal exchanges. I do hope they get better, because I would much likely prefer to use them, over the centralized ones.

Well, the first DEX to find a way to solve that will become huge, however they need to do it fast, the lightning network will bring atomic swaps as well which will allow us to exchange our coins for others without the need to use any exchange so that will allow us to perform peer to peer trades without too much problem, so the only thing we can do right now is to wait and see which technology arrives first.