Why are centralized exchanges still dominating the crypto space?

[semobo]

People feel more secured and convenient on centralized exchange over decentralized exchange and also wr can find lot of trading pairs on cex with huge trading volume so new traders are also going behind them.But one good thing is they never allowed one centralized exchange to dominant since crypto currencies were invented.

[1715441010]

1715441010

[baghdatis1990]

      Centralized exchanges are still more popular than centralized ones. Users prefer centralized exchanges because they are easier to use and facilitate their business. Centralized exchanges help new users to better adapt to the crypto market.
      I prefer decentralized exchanges because the risk of hacking is low and because I inspire more confidence when I know that no exchange is monitored by anyone.
      I think everyone should choose decentralized exchanges and choose safety, not ease of use.

[H1N1]

Ever since Bitcoin launched back in 2009, the rise of centralized exchanges has been inevitable. A few years later, and now the whole crypto market is dominated by centralized exchanges. While there have been many alternatives to the solution (such as decentralized exchanges), people are still performing trades at centralized entities.

Now the real question is why this is happening, since after all, Satoshi intended Bitcoin to be free from middleman or third parties? Depending on an exchange or custodian, greatly defeats the purpose of true decentralization. Knowing how oppressive some governments are, it'll be easier for them to stop usage of crypto whenever they want to by just targeting centralized exchanges.

Nonetheless, what are your thoughts about this?

Yes, although there were many centralized cryptocurrency exchanges have been hacked, it still dominating crypto space.
I think it is because the speed are faster than decentralized exchange. Another thing is, you can store multiple coins in most centralized exchanges.

[dolores13]

Centralized Exchanges CE still dominating Crypto because of liquidity, so it attract traders but Im sure CE will disappear soon with rise of Decentralized Exchanges DEX and Binance already realized this fact so they are working to launch a DEX.
Traders are leaving CE slowly due continuous changing of CE TOS , ask for more personal info ID etc.... Like what Bittrex did with its users , they change TOS suddenly and took Cryto coins as hostage until user provide complete ID + selfie above it , Funny fact about Centralized Exchanges you can deposit unlimited amount of cryptocurrencies such as btc eth .... but you cant withdraw until you verified your account then you cant withdraw limited amount daily , CE are same thing as Banks .... above all that your coins could disappear if CE get hacked or owner exit scam like mtgox.

Your Key Your Coins , thats it.

[rijaljun]

Many factors for me personally, most of centralized exchanges have better UI and better support team for problem solving. They are more easy to use for me and the coins are not just from a single blockchain make me more comfortable. Listing decision is also a way to avoid cutomers from a scam project.

[eaLiTy]

Ever since Bitcoin launched back in 2009, the rise of centralized exchanges has been inevitable. A few years later, and now the whole crypto market is dominated by centralized exchanges. While there have been many alternatives to the solution (such as decentralized exchanges), people are still performing trades at centralized entities.

The main reason for people flooding into centralized exchange is the ease of use and nothing else, there are some local exchanges in government controlled countries where they are set up as a centralized exchange but they are allowing users to purchase and sell the coins using P2P method where the centralized exchange acts as an escrow service and the security features in the decentralized exchange we now have is not that great as we have already seen many hacks and these may the reason we do not see much volume in those exchanges.

[Red-Apple]

i think the best way to get the answer to your question is if you go ahead and try the decentralized exchanges for yourself.

my observation is that nobody really trusts the centralized exchanges anymore and it has been the case for a couple of years now but the problem is that the alternative (being the decentralized exchanges) is not yet mature enough to be able to compete and eventually replace their centralized counterparts.
so until that day the centralization remains dominant mainly because we have no other choice.

[LD2164]

Try Blocknet and BlockDX
https://blocknet.co/

They have had a fully functional DEX running for months. I use it all the time.
https://blockdx.co/trade-history

Atomic swaps wallet to wallet, no KYC, automated setup, fully decentralized.

[Bohdan Rabeha]

Ever since Bitcoin launched back in 2009, the rise of centralized exchanges has been inevitable. A few years later, and now the whole crypto market is dominated by centralized exchanges. While there have been many alternatives to the solution (such as decentralized exchanges), people are still performing trades at centralized entities.

Now the real question is why this is happening, since after all, Satoshi intended Bitcoin to be free from middleman or third parties? Depending on an exchange or custodian, greatly defeats the purpose of true decentralization. Knowing how oppressive some governments are, it'll be easier for them to stop usage of crypto whenever they want to by just targeting centralized exchanges.

Nonetheless, what are your thoughts about this?

In fact i see a few reasons
People know little about decentralized exchangers. So their popularity is not high. The main disadvantages are volume and speed of exchanges.

With centralized exchangers everything is the opposite. In addition their number is growing and they are everywhere. Financial groups want to make money and the sooner they do it better for them. People who have influence will always put their conditions on any market. That is why centralized exchangers are filled with volumes and price.

It just is directly related to human behavior. You probably know about the Pareto rule (80/20)? When people are guided by emotions they relate to more people who are easy to manipulate.

[BitcoinHodler]

Now the real question is why this is happening, since after all, Satoshi intended Bitcoin to be free from middleman or third parties?

bitcoin IS decentralized and free from middleman or third parties. the fact that some people choose to trade bitcoin and do that on centralized exchanges does NOT change this fact.

as for why they choose them is mainly because no matter how much you try some people will never want to change so they will keep going back to their centralized ways that they are used to. any other market is centralized like stocks market so they want to have the same feeling so they choose centralized exchanges. these types of people are only in here for profit making.

[pushups44]

Centralized exchanges are still dominating the market because the decentralized ones are a bit slow and clunky, and they are not yet a good enough trade-off for the convenience centralized exchanges provide. But as time goes by and scaling solutions are found, along with user-friendliness, there will be a shift to decentralized exchanges. I'm not sure what the market share will be for them, though.

[klaaas]

I think we will see some more attention towards decentralized exchanges since the traditional ones are getting tougher and harder on there rules. Progress takes time and it will get more traction if it gets more user friendly.   The sooner the better ; )

[Dewi Aries]

I think because it is already launched for long time. That is why people already comfort to use them and we know decentralized exchange make us use our private keys to login, centralized exchanger we only need to make account in there.

[Kingairdrop]

Ever since Bitcoin launched back in 2009, the rise of centralized exchanges has been inevitable. A few years later, and now the whole crypto market is dominated by centralized exchanges. While there have been many alternatives to the solution (such as decentralized exchanges), people are still performing trades at centralized entities.

Now the real question is why this is happening, since after all, Satoshi intended Bitcoin to be free from middleman or third parties? Depending on an exchange or custodian, greatly defeats the purpose of true decentralization. Knowing how oppressive some governments are, it'll be easier for them to stop usage of crypto whenever they want to by just targeting centralized exchanges.

Nonetheless, what are your thoughts about this?

Decentralised exchanges are most time difficult to use, many people have lost a lot of funds on decentralised exchanges. But with centralised exchange e.g binance the UI is very user friendly and the security that comes with it are top notch unlike decentralised exchanges where your private keys can be easily compromise.

[mrdeposit]

Since the first big scam ICO, new projects keep refusing the facts about the usability case of crypto in the real world. So many investors left this industry for analytical purposes. Decentralized projects are part of the system but it is early to talk about it in my opinion.

[tomahawk9]

Newcomers don't care about centralization, they'll always use the popular exchanges which offer a user-friendly experience. Using a DEX that's relatively unknown compared to the big exchanges could be a bit "scary" to someone new in the cryptosphere.

And investors and traders prefer using centralized exchanges as they offer higher liquidity, plus, they also prefer using exchanges that comply with KYC/AML policies because they provide safety and transparency.

[TastyChillySauce00]

I think because it is already launched for long time. That is why people already comfort to use them and we know decentralized exchange make us use our private keys to login, centralized exchanger we only need to make account in there.

People are still not really into decentralized exchange simply because they are not used to all complicated and new things the decentralized exchanges currently have, it's like as you said, they are already in a comfortable zone and not seeking for any better option. However we can't force them to switch on decentralized exchange because it's just not our business.

[CryptoGosu]

I think that this is due to the fact that they are easier to use and have higher liquidity. At this moment, centralized exchanges are better suited for trading than decentralized.

[makerst]

This is a big problem for our crypto-alpine world. Such situations are now a problem for us. I see that now there is a domination of the centralized world. But I hope that all this will change in the near future.

[pawanjain]

You will find a dozen reasons why the crypto market is dominated by centralized exchanges and for the time being, it will continue to dominate the market.
Centralized exchanges are better than decentralized ones in the following factors like higher volume, liquidity, better support and user experience etc..
While decentralized exchanges are good too a higher number of people support centralized exchanges.