CEX ruins the true value of Bitcoin

[wiss19]

CEXs are also tied with their hands and are only following the laws and regulations towards crypto according to where they are licensed.
As much as possible, these exchanges don't like to get information from their clients but they are bound by the protocols of the government.
If they will not abide those protocols, their business will be in jeopardy and they may stop their operations.
So people or crypto users are also complying just to use the services of exchanges and so with the exchanges to retain their business.
We can't avoid this requirement if we do really want more adoption from legal platforms.

That part doesn't really bother me. I am not using crypto in any bad way at all and my nation doesn't really see crypto as a legal problem. You could make money, or you could lose money and in the end you would be fine.

This means that we should not really be bothered by having any part of a problem in the crypto world, we should just focus on how we could KYC but at the same time do not share it with the world, and just share it with the governments that require it. I mean I have seen so many people's KYC information leaked so far that I am sure mine must be somewhere out there. I am not bothered by governments seeing it, but regular people seeing it surely doesn't feel nice.

[bluebit25]

At times due to the rules and regulations of certain countries, CEX used to ruin the value of bitcoin...

It's just sometimes and it really hasn't had a serious impact. I think today's users are savvy enough to have many options to buy BTC from many places. We have hundreds of CEX and DEX so it's really a matter of how users are affected, but I get what you mean, but it's only a small part of a division or an exchange, so don't worry too much about a simple matter.

[Findingnemo]

These exchanges has to follow the regulations of government if they want to continue their services so what can we expect from them when the government made them to do it. When you are dealing cryptocurrencies with Fiat the KYC will become unavoidable for sure

I see. The op should not put the blame then to coinbase or to the other centralized exchanges or wallets because it wasn't totally their fault on why they expose a user's identity but it was the order of the government. Those cex also care for the people's privacy and to the reputation of bitcoin but what can they do? they only want to continue their business. They need to think of their selves first before the others so sorry.

in the next few years and you know we don't have to convert bitcoin to CAD or USD we can simply use bitcoin as bitcoin itself atleast in the future.

It is expected that all people will not need fiats anymore in the future because they can use bitcoin directly once bitcoin have been made a legal tender. I think that will make the kyc obsolete as well but for now, we can use dex and p2p if we only want to bypass the centralization and kyc imposed by the governments.

Currently there are very few KYC less p2p trading platforms and it may not be convenient for every fiat conversion and also in large amount, centralized exchange acts as trusted third party because we know the source of funds coming from their bank account but when doing p2p transactions with anonymous person we have more risks like someone can use hacked bank account and buy bitcoin so they will never exposed but our bank will freeze our account that is why I am sticking with LBC even though they made KYV mandatory because we can find the funds are coming from the original owner or third party account.

[Wind_FURY]

What is interesting, however, is that despite people supporting Bitcoin they are also supporting centralized exchanges and custodial wallets and all things that are essentially against the Bitcoin standard. So perhaps we could ask whether the people really prefer complete independence. For many years, DExes are left behind by CExes in terms of volume. Moreover, despite compulsory KYC hassles and failing a number of times in the process, centralized exchanges are not losing popularity. Is it only because DExes don't support fiat? Or is it simply because CExes are generally better? Or perhaps people aren't really interested get out of fiat altogether?

It's for several reasons:
- At the beginning how/where would you buy bitcoin? On the street? From some stranger?
- The exchanges offer a certain level of security because they kind of explain you how to activate the 2FA etc
- Are we sure that someone who try to buy/use cryptos for the first time has the knowledge to manage DeFi exchanges and wallets?

I don't think CEXs are the devil, they're a good tool and I like to use them in combination with DeFi.

They're not, they are a necessity. They're merely facilitators for buyers and sellers to meet, and provide liquidity for the market. But from another viewpoint, exchanges can become very powerful, that can control this new "financial system" too, like banks control legacy systems. A balance is needed, enter decentralized exchanges like BISQ.

Probably in the future, a close one, big exchanges like Binance, Coinbase and FTX, that are always trying to follow all the different regulations around the world, could even ask and obtain some kind of bank permits, so they'll be able to lend money to people just like banks do nowadays. I see this as a natural evolution of this sector, big banks should really watch their backs because if I were them, I'd be pretty worried.

In that future, I'm very confident there will be more, and better BISQ-like decentralized exchanges implemented, and more peer to peer exchanges like LocalBitcoins/HodlHodl. Why? Because it they will be necessary for further development of Bitcoin. Exchanges becoming like banks is deteriorated development.

[Ale88]

In that future, I'm very confident there will be more, and better BISQ-like decentralized exchanges implemented, and more peer to peer exchanges like LocalBitcoins/HodlHodl. Why? Because it they will be necessary for further development of Bitcoin. Exchanges becoming like banks is deteriorated development.

I absolutely hope as well that in the future we'll have several reliable DEXs, that would be the natural evolution of cryptos. At the same time I think CEXs will still have their market share because this world is going to be so big there everyone can have its own space. It's up to us deciding what to use depending on the situation because if someone wants to cash out, doing it through a regulated exchange with KYC approved for sure is going to be way more simple than simply getting some money from some unknown platform.

[South Park]

In that future, I'm very confident there will be more, and better BISQ-like decentralized exchanges implemented, and more peer to peer exchanges like LocalBitcoins/HodlHodl. Why? Because it they will be necessary for further development of Bitcoin. Exchanges becoming like banks is deteriorated development.

I absolutely hope as well that in the future we'll have several reliable DEXs, that would be the natural evolution of cryptos. At the same time I think CEXs will still have their market share because this world is going to be so big there everyone can have its own space. It's up to us deciding what to use depending on the situation because if someone wants to cash out, doing it through a regulated exchange with KYC approved for sure is going to be way more simple than simply getting some money from some unknown platform.

The problem with DEXs is that even if the technology is decentralized there is still a single point of failure which are the people that own the DEX, one of the likely reasons why satoshi disappeared was to eliminate this point of failure in bitcoin, so we need another visionary like satoshi that creates a DEX technology but that is willing to leave it behind when the time comes, something which is unlikely to happen as such a person would leave a lot of money over the table by doing a move like that.

[Fatunad]

In that future, I'm very confident there will be more, and better BISQ-like decentralized exchanges implemented, and more peer to peer exchanges like LocalBitcoins/HodlHodl. Why? Because it they will be necessary for further development of Bitcoin. Exchanges becoming like banks is deteriorated development.

I absolutely hope as well that in the future we'll have several reliable DEXs, that would be the natural evolution of cryptos. At the same time I think CEXs will still have their market share because this world is going to be so big there everyone can have its own space. It's up to us deciding what to use depending on the situation because if someone wants to cash out, doing it through a regulated exchange with KYC approved for sure is going to be way more simple than simply getting some money from some unknown platform.

The problem with DEXs is that even if the technology is decentralized there is still a single point of failure which are the people that own the DEX, one of the likely reasons why satoshi disappeared was to eliminate this point of failure in bitcoin, so we need another visionary like satoshi that creates a DEX technology but that is willing to leave it behind when the time comes, something which is unlikely to happen as such a person would leave a lot of money over the table by doing a move like that.

No matter how DEX would flourish out in the market it would still remain inferior to CEX.Why? As long it wont really be able to attach  in between fiat to crypto conversion and this is where people do really need
on which they could easily convert it to fiat and then transfer it out into their bank accounts or simply could able to cash out it and this is where DEX do really lacks.
Lets just face the reality that we are indeed needing this even though it do really remove out the true essence of decentralization but this just cant really be avoided.

[Ale88]

In that future, I'm very confident there will be more, and better BISQ-like decentralized exchanges implemented, and more peer to peer exchanges like LocalBitcoins/HodlHodl. Why? Because it they will be necessary for further development of Bitcoin. Exchanges becoming like banks is deteriorated development.

I absolutely hope as well that in the future we'll have several reliable DEXs, that would be the natural evolution of cryptos. At the same time I think CEXs will still have their market share because this world is going to be so big there everyone can have its own space. It's up to us deciding what to use depending on the situation because if someone wants to cash out, doing it through a regulated exchange with KYC approved for sure is going to be way more simple than simply getting some money from some unknown platform.

The problem with DEXs is that even if the technology is decentralized there is still a single point of failure which are the people that own the DEX, one of the likely reasons why satoshi disappeared was to eliminate this point of failure in bitcoin, so we need another visionary like satoshi that creates a DEX technology but that is willing to leave it behind when the time comes, something which is unlikely to happen as such a person would leave a lot of money over the table by doing a move like that.

So you mean that you're worried about a possible exit scam? That's always a possibility, but let's face the reality taking people like CZ and Sam Bankman-Fried: those people already have tens of billions of dollars, and they're assets are extremely (if not completely) crypto related, so why should someone in their position scam? To eventually get some other billion of dollars while tanking the market and becoming an international criminal? What are they even going to do with that money? They already enough money for the next 20 generations of their families.

[fuguebtc]

CEX is not here to stay. Sorry, centralized boys and girls. Centralized Exchanges are not going to be part of Bitcoin's future.

Why? Do you think CEX won't survive a long time in crypto industry? 
In my country, CEX plays a good role to introduce Bitcoin and crypto as a whole. Without CEX, people in my country probably aren't interested in Bitcoin because they are hard to believe with exchanges like DEX. By the way, Binance, Huobi, KuCoin, and many other top exchanges are CEXs, which means people around the world trust CEX. How can CEX not a part of BTC future, mate?

Admittedly, CEX is an integral part of the market. Although CEX is regulated by organizations and law enforcement agencies, CEX is easy to use and the utilities it provides are almost complete for users. With DEX, currently DEX has many limitations in utility as well as expensive transaction fees, so it is not as popular and popular as CEX.

CEX is only suitable for daily transactions and exchanges, holding assets on CEX is not safe so use non-custodial together with CEX.

[goldkingcoiner]

CEX is not here to stay. Sorry, centralized boys and girls. Centralized Exchanges are not going to be part of Bitcoin's future.

Why? Do you think CEX won't survive a long time in crypto industry? 
In my country, CEX plays a good role to introduce Bitcoin and crypto as a whole. Without CEX, people in my country probably aren't interested in Bitcoin because they are hard to believe with exchanges like DEX. By the way, Binance, Huobi, KuCoin, and many other top exchanges are CEXs, which means people around the world trust CEX. How can CEX not a part of BTC future, mate?

Admittedly, CEX is an integral part of the market. Although CEX is regulated by organizations and law enforcement agencies, CEX is easy to use and the utilities it provides are almost complete for users. With DEX, currently DEX has many limitations in utility as well as expensive transaction fees, so it is not as popular and popular as CEX.

CEX is only suitable for daily transactions and exchanges, holding assets on CEX is not safe so use non-custodial together with CEX.

Centralized Exchanges are not supposed to be an integral part of the market. While the illusion of fairness and justice exist in theory, in practice, how many people got their money back from scam/bad faith cexs? CEX's (even though regulated by organizations and law agencies) are outdated and completely unnecessary in the future of Blockchain. Since that was what Bitcoin is about from the start. No more third parties with their hands in our pockets.

DEX's are just really new. They will improve, just like Bitcoin exchanges did.

[buwaytress]

CEXs not here to stay disproven many times already. DEXes came, DEXes went. The ones alive today and thriving haven't been around for very long and when "defi" yields less and less, people will move on to the next fancy thing. CEXes have only gotten bigger. The cracker here is so many new defi coins still want to list on exchanges -- there's the exposure, there's where regular Joe lives, there's where it's still easiest to get your hands on crypto.

Of course I advocate for self-custody, but CEX will be for a long time the gateway.

[hyudien]

They are just in place currently because we have not found a better way. But we are looking for better ways to make Bitcoin more decentralized.

What is a better way do you mean? Remove CEX?

Is this a centralization problem because CEX has roles and personal data of its users which at any time can be asked by the government to control how much money is in it?

The role of CEX undermining Bitcoin? I just thought somehow when CEX was removed, maybe the trading volume wouldn't be this high until now. Despite the dire point of view of CEX, I feel safe on a trusted platform that if at any time lose funds on it has a minimal level of solution.

[wiss19]

I understand the idea, we have already managed to build swaps where people could earn money via liquidity and people are thinking that maybe we could have DEX in the future doing far more trading than CEX however people are forgetting the power of these companies.

I mean Binance is so huge that they would build a system where it is dex but they are the ones that are making the money. They could just provide the liquidity themselves, and make all the profit from the swaps we do as well. Plus we do need centralized exchanges for a few stuff, like getting into crypto, because I need to somehow turn my fiat to crypto or vice versa in some sort of way.

[rat03gopoh]

Centralized Exchanges are not supposed to be an integral part of the market. While the illusion of fairness and justice exist in theory, in practice, how many people got their money back from scam/bad faith cexs? CEX's (even though regulated by organizations and law agencies) are outdated and completely unnecessary in the future of Blockchain. Since that was what Bitcoin is about from the start. No more third parties with their hands in our pockets.

DEX's are just really new. They will improve, just like Bitcoin exchanges did.

DEX also has a downside, do you remember the squidgame scam on PancakeSwap? And what kind of restoration is there for the victim? The answer is none. Not even a guarantee of recovery, because DEX does not involve the legal authority to deal with all forms of crime caused and PS will not bother chasing the scammer. In fact, now the case seems to just disappear.
Then, what about MTGox, it was the most historic case of crypto fraud and now it has found a light as the hunt for scammers has continued since the hacking incident occurred thanks to pressure from legal authorities.

[Hamphser]

Centralized Exchanges are not supposed to be an integral part of the market. While the illusion of fairness and justice exist in theory, in practice, how many people got their money back from scam/bad faith cexs? CEX's (even though regulated by organizations and law agencies) are outdated and completely unnecessary in the future of Blockchain. Since that was what Bitcoin is about from the start. No more third parties with their hands in our pockets.

DEX's are just really new. They will improve, just like Bitcoin exchanges did.

DEX also has a downside, do you remember the squidgame scam on PancakeSwap? And what kind of restoration is there for the victim? The answer is none. Not even a guarantee of recovery, because DEX does not involve the legal authority to deal with all forms of crime caused and PS will not bother chasing the scammer. In fact, now the case seems to just disappear.
Then, what about MTGox, it was the most historic case of crypto fraud and now it has found a light as the hunt for scammers has continued since the hacking incident occurred thanks to pressure from legal authorities.

You've said some solid point or simply the pro's on dealing with centralized exchange which you could really have that kind of security when it comes to your funds which if there would be some hacking incident then

tendency on being compensated or recovery of funds would be there unlike when you are dealing with DEX.Yes, they might be that heavily centralized but there are actually key areas which is really helpful on users part.

It doesnt really totally ruin the true value or utility of these coins specially bitcoin yet people could make on their own choices.

[Captain Corporate]

You've said some solid point or simply the pro's on dealing with centralized exchange which you could really have that kind of security when it comes to your funds which if there would be some hacking incident then

tendency on being compensated or recovery of funds would be there unlike when you are dealing with DEX.Yes, they might be that heavily centralized but there are actually key areas which is really helpful on users part.

It doesnt really totally ruin the true value or utility of these coins specially bitcoin yet people could make on their own choices.

 Its just too out of mind for someone to think that they could store their crypto better than a crypto exchange could. Don't get me wrong we have heard about a billion bad stories about horribly small places. Like that canadian exchange where the owner died and all, but that was like a few hundred million dollars. Binance is multi hundred billion dollar company and so is coinbase as well. This means that we are talking about security at a level we have never seen before in the digital world. If you think that you could store your crypto better than Binance or Coinbase, then good luck to you, I do not have that confidence in myself

[Ale88]

Today I read the news that the European Parliament obliges to deanonymize a transaction if it exceeds $1000. It seems that this is becoming a trend and will soon become commonplace in the crypto industry, just as KYC became commonplace in its time. Everything goes to the fact that the crypto industry will be completely controlled by governments and all your data will flow into certain databases.

I don't think it's the CEXs that are destroying the value of bitcoin. The value of bitcoin is destroyed by the very adoption of bitcoin, no matter how strange it may sound. The more expensive it becomes, the more often it is used, the more it is subject to regulation and control. This is the other side of today's high price of bitcoin.

Wait, what they proposed today was an initial draft, so to become law it still has go through other 2 approvals, and it can also be modified. It looks like that the exchanges could simply ask for a confirmation buy the user that the wallet he is moving to money to/from it's his, so the most annoying part is not the wallet rather than they have to advise pretty much every single transaction. That's ridiculous.

[goldkingcoiner]

Centralized Exchanges are not supposed to be an integral part of the market. While the illusion of fairness and justice exist in theory, in practice, how many people got their money back from scam/bad faith cexs? CEX's (even though regulated by organizations and law agencies) are outdated and completely unnecessary in the future of Blockchain. Since that was what Bitcoin is about from the start. No more third parties with their hands in our pockets.

DEX's are just really new. They will improve, just like Bitcoin exchanges did.

DEX also has a downside, do you remember the squidgame scam on PancakeSwap? And what kind of restoration is there for the victim? The answer is none. Not even a guarantee of recovery, because DEX does not involve the legal authority to deal with all forms of crime caused and PS will not bother chasing the scammer. In fact, now the case seems to just disappear.
Then, what about MTGox, it was the most historic case of crypto fraud and now it has found a light as the hunt for scammers has continued since the hacking incident occurred thanks to pressure from legal authorities.

I think it needs some reminding that what we currently have, in terms of "decentralised finance" is not truly decentralised. But it will become so, in the future when adoption and technology become significant aspects of the entire nature of DeFI.

The Squidgame scam on pancakeswap did not have anything to do with Decentralisation. Perhaps it could be argued that a con point of decentralisation is the lack of arbitration when human nature fails and allows such a scam to happen to them.

TLDR: Rugpulls and DEX's have nothing to do with each other. Its down to the individual not to fall for obvious scam coins with no source of value generation for the token and an anonymous team.

[Wind_FURY]

In that future, I'm very confident there will be more, and better BISQ-like decentralized exchanges implemented, and more peer to peer exchanges like LocalBitcoins/HodlHodl. Why? Because it they will be necessary for further development of Bitcoin. Exchanges becoming like banks is deteriorated development.

I absolutely hope as well that in the future we'll have several reliable DEXs, that would be the natural evolution of cryptos. At the same time I think CEXs will still have their market share because this world is going to be so big there everyone can have its own space. It's up to us deciding what to use depending on the situation because if someone wants to cash out, doing it through a regulated exchange with KYC approved for sure is going to be way more simple than simply getting some money from some unknown platform.

The problem with DEXs is that even if the technology is decentralized there is still a single point of failure which are the people that own the DEX, one of the likely reasons why satoshi disappeared was to eliminate this point of failure in bitcoin, so we need another visionary like satoshi that creates a DEX technology but that is willing to leave it behind when the time comes, something which is unlikely to happen as such a person would leave a lot of money over the table by doing a move like that.

True DEXs, like BISQ, are open source projects licensed under a GPL-like license that makes the project "owned" by the community. If a lead developer leaves, another from the community can take his/her place, like Bitcoin when Satoshi left, or Linux if Linus Torvalds leaves.

[hd49728]

True DEXs, like BISQ, are open source projects licensed under a GPL-like license that makes the project "owned" by the community. If a lead developer leaves, another from the community can take his/her place, like Bitcoin when Satoshi left, or Linux if Linus Torvalds leaves.

Problems with Bisq is their low trading volume. So it reveals the fact that not much people actually care about privacy, anonymity and truly DEX. If they care about that, they will use true DEX like Bisq more and will contribute to make trading volume on it much higher.

I disagree with the OP on the opinion. Bitcoin is for everyone and there are many use cases for it, on DEX, on CEX, on Peer-to-Peer marketplace, gambling sites, etc. Nothing destroys the true value of Bitcoin. Together, they contribute to bring Bitcoin to the world, to result in better adoption. It's more good than harm.