Centralized exchanges have become the banks of the cryptocurrency world

[Twinkledoe]

Although the central platforms are worse than banks, the cryptocurrencies (most of shitcoins) that want to be listed are worse than paper money, so I agree with any restrictions that are added even if they are greedy from the platform.

Many cryptos have no future and they are pumping/dumping models. thus may lead you to lose your money in the long run.
Therefore, it is reasonable to place strict restrictions on them, as it is the duty of governments to place restrictions on these platforms.

A lot of crypto creators find a way to earn quick money without divulging their identities. So you are right that somehow we need strict regulations to lessen if not eradicate these scammers. If they will just use blockchain projects in the rightful manner and not be abusive about it, we will not need these centralized exchanges.

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[royalfestus]

Centralized exchanges are very efficient and basically the most active unit of cryptocurrency. Developments are now going into crypto to fiat exchange, wherebye giving access to easy cash out, either through bank ATM or mobile app that links to banks. This also give more physical interaction for all holders and reduce the stigma attached to virtual coin, also improve the process of crypto purchase, Although cryptocurrency has the reduced address as virtual coin.

[teosanru]

This actually is true and quite worrying too. No matter what we say top exchanges today are actually controlling major flow of Cryptocurrencies and these are based solely on trust and fidelity. There are absolutely no norms made for them. But we as an investor and users are actually out of options. DEX are extremely time consuming and boring. Moreover most of them these days are bot driven which makes them even less lucrative. Moreover coming yo the part that many alts are merely trading commodities I think this pretty much holds true for a few years only. There were many vague companies during the dot com bubble but only a few survived which actually were based for utilities and same would happen in Cryptocurrencies too only those with some utility would survive rest would be dumping sooner or later.

[wozzek23]

Yes that’s the truth but it wouldn’t be the same when the government starts to create their own cryptocurrencies, all these centralized exchanges might not be the ones that would be in control of government issued cryptocurrency, maybe they will, but not really like you think. At that time banks will evolve to something bigger and exchange to their services I guess, that way people will be able to buy the assets from their online banking app and also sell it when they want to and convert to original currency.

[hello_good_sir]

Absolutely, and the degree of centrality that these exchanges introduce to the cryptospace is absolutely mind boggling in terms of the effects that they will potentially have.

It goes without saying that these centralized exchanges are prone to attacks the way that decentralized cryptos are simply designed to circumvent. The risk of the middleman within a transaction essentially gets reintroduced as soon as people start using third parties.

I'm not say that it's possible to eliminate all of them, but the pushes towards DEXs is definitely warranted and needed.

[davis196]

Newly launched altcoin projects are desperate for one thing-promotion.
Listing them on a well known crypto exchange platform will bring them lots of new traders.
Paying for advertising/promotion is completely normal and,if you think about it,it's a form of quality control.
Do you want every newly launched shitcoin to get free advertising and exposure on all big crypto exchange platforms?That would be a disaster for the traders and a blessing for the shtcoin developers,who want fast pump&dump profits.

[deisik]

The only solution it seems to me, is to build a community

It has always been the only lasting solution

When Satoshi created Bitcoin, there was nothing, no cryptocurrency exchange to list it on, no online casino to add it to the list of supported coins, even no major news outlet to write about it. But it still succeeded in the end. Those who want to start their own coin should be more focused on how useful it will be to people and what advantages it has to offer over the competition. If it gains success, exchanges will line up to list it on their own

[The Sceptical Chymist]

If you assume this statement is true:

For projects who did not participate in the IEO/ICO stages and have no funding, it is nearly impossible to get listed on an exchange.

Then these following quotes don't make a hell of a lot of sense if you consider that the article specifically states that there are over 1500 exchanges in existence, all desperate for projects to get their coins listed on them:

The CEO of DigiByte (DGB) claims he was asked for $300,000, plus 3% of his 58th ranked altcoin’s entire coin supply, to get listed on Binance.

The demands made of the 1,371st-ranked uPlexa were equally outrageous. According to Pierce:  We’ve had offers for 50% of the premine to get listed on an exchange.

It seems to me that the advantage should be going to the coin devs as far as getting listed on an exchange.  If one of them is asking for an outrageous fee, it should be easy enough to say to them, "Screw you, I'll just list it on some other exchange".  

On the other hand, it does explain why lesser-quality coins are only listed on obscure exchanges.  Try buying Gridcoin if you want to stake it.  SouthXchange is basically your only option.  Reddcoin?  It's listed on only about four exchanges.  So I'm definitely not saying I disagree with this article, because it makes good points.  I just wish there were more details given about which exchanges were trying to extort coin devs.  Naming names can be problematic for journalists (and devs) but still.

[hello_good_sir]

It's true. But it's actually a lot damaging to the crypto-space because businesses or people who want to bank with banks aren't charged such huge amounts of money to work with them. Whilst any top exchange charges anywhere from $100,000 to $500,000, not including the altcoins they receive. It's a very monopolistic approach towards things, and it's one of the biggest issues that people face in crypto, as exchanges are so crucial for development.

However with these prices and the chokehold that these exchanges have on the market and future growth, it'll be impossible for some projects to get off the ground, and it may completely decimate the start-up aspect of crypto-currencies, as such high numbers are only affordable for already developed businesses, or ones with huge amounts of institutional investments.

The future growth will be heavily determined by how exchanges and DEXs will dominate.

[gentlemand]

And I am not really against it as long as they do it right. The difference between central exchanges and banks is the fact that banks do not have the money they claim they do, whereas central exchanges all have that money, sure they are making a profit from just holding your coins, yet that doesn't change the fact that they still have it on their cold storage or on hot wallets just so they can withdraw.

Well, that's the great unknown. I'm sure places like Coinbase would quickly get whistles blown if giant holes were found in their claimed holdings. I couldn't say the same for many of the other 'top' exchanges. We have zero idea what's going on behind closed doors.

We're still transitioning into respectability. Look at Coinbase's BCH launch. If that was in the area of conventional finance they'd be nailed to fucking the wall for it.

I expect in future there'll be 10-15 titans worldwide with legacy investment and owners that decides what becomes top tier and what doesn't. Below that I don't think the tidal wave of nothing exchanges will ever let up.

If your coin manages to blow up the world organically then you'll have an in. There'll be no more buying or tricking your way to prominence.

[beerlover]

And I am not really against it as long as they do it right. The difference between central exchanges and banks is the fact that banks do not have the money they claim they do, whereas central exchanges all have that money, sure they are making a profit from just holding your coins, yet that doesn't change the fact that they still have it on their cold storage or on hot wallets just so they can withdraw.

The biggest example here could be the fact that every single person can withdraw all of their money from binance and even tho it may take some time to withdraw, they will be capable of doing it, if every single person wants to withdraw their fiat from the banks, banks won't be able to give that kind of money to people since they actually don't posses it on their vaults.

Edit: Sorry accidentally deleted but re-posted.

[shield132]

Well, they are becoming at some point because for example on bitcoin's case, exchanges hold more bitcoin than ever. According to article that was published on longhash, coinbase holds 1 million bitcoin in it's cold wallet. That's bad cause not your keys, not your coins and that's 100% right without doubt, crypto isn't something that gives you ability to request chargeback and etc.
Let's move on OPs post, there is a problem of exchanges not accepting altcoins? When there is demand, there is supply. Imagine exchange not accepting btc, ether and others, their popularity would fall dramatically and their business too. These developers have to create demand on their coins and you have to make situation like if exchange doesn't accept it, they'll lose a lot. That's hard to do...
There are 6686 according to coinmarketcap, 95% of them are more than shit. From that 5%, 4% is shit. In 1% you may find some really good.

[Japinat]

Not totally yet, only few of the total number of centralized exchanges have that features where we can deposit and withdraw usd.

Based on my experience, I have only tried Bittrex which I did transfer money from such exchange to my bank account which I can spend the balance through my ATM card, that process alone is good, its just like banking fiat, so hopefully more banks will get license from the government so they can fully give the comfort to their clients to easily convert bitcoin to fiat and be useful in daily lives.

[aioc]

https://www.ccn.com/the-dark-side-of-becoming-the-next-bitcoin/

Your favorite altcoin’s path to becoming the “next Bitcoin” is a lot more treacherous than you think.

The CEO of uPlexa (UPX) told CCN.com about the financial and ethical minefield faced by upstart altcoin projects in the cryptocurrency industry. Kyle Pierce – the project’s co-founder and lead developer – paints a miserable picture of an industry that may already have been taken over by its worst people.

The “king-making” ability of centralized exchanges is no secret. The CEO of DigiByte (DGB) claims he was asked for $300,000, plus 3% of his 58th ranked altcoin’s entire coin supply, to get listed on Binance.

The demands made of the 1,371st-ranked uPlexa were equally outrageous. According to Pierce:

    We’ve had offers for 50% of the premine to get listed on an exchange. 50% of our premine that’s allocated to exchange listings, marketing, hiring, founding team, core members, security audits, etc. They somehow believe that one hour of their time is worth nearly 6,000+ of our current man hours into this project.

Pierce says the saturation of centralized exchanges is making matters worse. Over 1,500 exchanges now compete for the same territory. As that number increases, the desperation of each rises accordingly.

    There’s 1500+ centralized exchanges that offer the exact same service, and they’re starting to lose volume. So they artificially boost the volume and hire VA’s to go around soliciting every team member of every project in hopes to quickly make a quick buck before their watering hole dries up.

These exchanges have become a choke-point for the cryptocurrency industry. The only way to get listed is to play their game. That means new cryptocurrency projects have their development plans dictated to them before they’ve even begun.

    For projects who did not participate in the IEO/ICO stages and have no funding, it is nearly impossible to get listed on an exchange. So, firstly, not only are people predominantly trading on centralized exchanges in a decentralized area, but the exchanges that are making huge sums of money are killing off the potential for real-world technologies to get noticed/adopted.

Another exchange told Pierce they would be happy to list his project, if only they moved away from “the whole privacy thing.”

There is a lot more in that article about the perils of launching a coin.

The only solution it seems to me, is to build a community and then get that community to use a decentralised exchange. The only reason Dex's arn't being used is because there isn't volume there - but that can be solved if an entire community decides to use a particular Dex.

It's really about time that one decentralized exchange lead the way for this battle against these centralized exchange, they are the one who made the most profit in this industry, look at the number of ICO based exchange they are growing and looking to get a slice of the market, Binance has become an imposing monster in the community with their huge fee.

[gentlemand]

It's really about time that one decentralized exchange lead the way for this battle against these centralized exchange, they are the one who made the most profit in this industry, look at the number of ICO based exchange they are growing and looking to get a slice of the market, Binance has become an imposing monster in the community with their huge fee.

It's up to users to migrate, however from what I've seen so far nothing out there really cuts it other than Bisq and no one is using that either.

It needs to be properly decentralised for starters - ie not tied to a domain name or hosting as that can be hijacked.

As we've seen time and again most people want to centralise for the sake of convenience and hand holding. The ones who want to shun it are noble outliers.

[Jating]

Checking out bisq, $79,232.82 USD

https://coinmarketcap.com/exchanges/bisq/

I guess we are really that far on people using DEX like bisq because almost majority thinks that CEX is the only exchanges that exists out there. The promotions of those top tier CEX is what really pushes out DEX of the picture and not gaining traction specially for newbies.

And unless we here another exchanges being hacked, exit scamming, beginners are not going to learn DEX, in my opinion.

[deisik]

Checking out bisq, $79,232.82 USD

https://coinmarketcap.com/exchanges/bisq/

I guess we are really that far on people using DEX like bisq because almost majority thinks that CEX is the only exchanges that exists out there. The promotions of those top tier CEX is what really pushes out DEX of the picture and not gaining traction specially for newbies

Personally, I don't think this is the case here

DEX's have been known since at east 2015 as this is when BitShares came about which became bisq later (correct me if I'm wrong here). So it is not like they are completely unknown to the wider trading public, while the root of the problem lies somewhere else. And I can tell you where exactly. The sad truth is that these so-called decentralized exchanges are not truly decentralized at all, whatever they may claim to the contrary

They are as centralized as any other exchange out there but on a completely different level. Regular cryptocurrency exchanges are centralized on the currency level by holding the private keys to the trader account wallets, while decentralized exchanges maintain control over the blockchain itself which is the backbone of the whole shop. Put shortly, it is six of one and half a dozen of the other

[tbterryboy]

It's really about time that one decentralized exchange lead the way for this battle against these centralized exchange, they are the one who made the most profit in this industry, look at the number of ICO based exchange they are growing and looking to get a slice of the market, Binance has become an imposing monster in the community with their huge fee.

It's up to users to migrate, however from what I've seen so far nothing out there really cuts it other than Bisq and no one is using that either.

It needs to be properly decentralised for starters - ie not tied to a domain name or hosting as that can be hijacked.

As we've seen time and again most people want to centralise for the sake of convenience and hand holding. The ones who want to shun it are noble outliers.

What people might care about is their security and assurity that their funds would not be stolen or hacked. There are a number of exchanges out there but not each of them is secure to transact. There are only few exchanges which offers us complete security which are chosen by the people.

Most of the people would not even care if it is a CEX or a DEX if the exchange is giving them benefits, they would join in. What people needs is benefits. They are with trading only because they need to earn a decent amount of money and hence they would only go for exchanges which might show them unique but best features.

[Japinat]

Most of the people would not even care if it is a CEX or a DEX i....

I think you are wrong, most of the people care on what exchange they will use, if you total all the daily volume of Centralized exchange, it would at least total to $5 billion, (That's my own estimate only).. while compare to the DEX, their combine volume does not even reach $100 million or even $10 million.
Binance DEX as of now only have less than $1 million trading volume, so that speaks what people really like to use.

[milewilda]

Most of the people would not even care if it is a CEX or a DEX i....

I think you are wrong, most of the people care on what exchange they will use, if you total all the daily volume of Centralized exchange, it would at least total to $5 billion, (That's my own estimate only).. while compare to the DEX, their combine volume does not even reach $100 million or even $10 million.
Binance DEX as of now only have less than $1 million trading volume, so that speaks what people really like to use.

Just a typical thing when we do compare the volume between CEX and DEX. We do know that dex ones doesnt really have that Fiat/Crypto pair and we know that majority of us
does really need that kind of feature which are absent on dexes thats why we do end up on using cex platforms due to that main reason.
Everybody loves anonymity and decentralization but there are things that can really be considered as an exception due to our needs.