Newbies: Don't use centralized exchanges!

[BlackHatCoiner]

How did I forget. There's another reason why traders, specifically, shouldn't use centralized exchanges.

Binance, Coinbase, Kraken, KuCoin, Cash App, FTX followed by an endless list of other less popular exchanges, have millions of users which means they have every detail, from who bought and how much to where are the most buy/sell orders, at what rate etc. Everything needed to bring disruption to the market at any time.

When you use a centralized exchange you support a less fair economy that can be manipulated more easily.

[n0nce]

How did I forget. There's another reason why traders, specifically, shouldn't use centralized exchanges.

Binance, Coinbase, Kraken, KuCoin, Cash App, FTX followed by an endless list of other less popular exchanges, have millions of users which means they have every detail, from who bought and how much to where are the most buy/sell orders, at what rate etc. Everything needed to bring disruption to the market at any time.

When you use a centralized exchange you support a less fair economy that can be manipulated more easily.

That's a very good point, indeed.

I have another addition when it comes to the argument that newbies want to trade alts.. Anyone thinking this is good or normal should have a read of this topic: What Can Happen If You Want to Trade Cryptocurrencies, but You Don’t Know How?.
If you have friends or family who want to 'get into crypto' and 'need to trade alts', so they 'need to use a centralized exchange' - tell them they're doing it wrong. They should read that post by Pmalek as well and learn the fundamentals of Bitcoin. Then they can buy Bitcoin.
If they're hellbent on trading, make them read some books on trading and 'paper trade' for a few years before playing with real money.

In general, I believe if only people who know what they are doing, were trading altcoins, their trading volume would be much lower and the amount lost due to ignorance in the field of trading would be much lower as well. I'm convinced that newbies should not use centralized exchanges, since newbies shouldn't be trading altcoins.

[cheezcarls]

This is why I’ll never ever going to use CEXs as my storage for the crypto assets that I have. Although that it can save us trading fees and with faster experience, it’s biggest downside was the security. Coz’ no matter how they are enforcing these measures, the hackers are just one step ahead in doing whatever it takes to find a backdoor that would bypass restrictions just like the recent Axie Infinity hack on the Ronin Dex.

[BlackHatCoiner]

They should read that post by Pmalek as well and learn the fundamentals of Bitcoin.

The understanding of it requires a decent level of maturity and discipline, though. Sure, I can share it with my friend who wants to make a quick cheese with Dogecoin, by the assumption that they'll read it, but I have my doubts they'll soon enough understand why Bitcoin.

Most don't care. I don't know if you had relatives or closed friends who were experimenting with trading, but me who's surrounded by economist and banker graduates, half of which are hustler-wannabes, I can easily say they're not sensitized by these issues at all.

[RashidulIR]

It is true that keeping money traded on centralized exchanges is risky at times and can be controlled at times which can lead to inconvenience at times.  But I have seen that in many countries decentralized exchanges do not have the convenience to take their own money or currency due to which people are bound to trade in centralized exchanges and exchange it in their own currency through P2P.

[n0nce]

They should read that post by Pmalek as well and learn the fundamentals of Bitcoin.

The understanding of it requires a decent level of maturity and discipline, though. Sure, I can share it with my friend who wants to make a quick cheese with Dogecoin, by the assumption that they'll read it, but I have my doubts they'll soon enough understand why Bitcoin.

Most don't care. I don't know if you had relatives or closed friends who were experimenting with trading, but me who's surrounded by economist and banker graduates, half of which are hustler-wannabes, I can easily say they're not sensitized by these issues at all.

You bring up some very good points. I noticed that the less confident people are about their understanding of finance / economics and technology, the more they trust me and are open to learning, also by researching and reading themselves. On the other hand, people who already dabbled with stocks or who have an education in the field of economics do show these 'hustler-wannabe' traits and clearly find themselves on the spike of the Dunning-Kruger curve. It's much harder getting them to learn, because for that you first have to convince them of the harsh truth that they don't know everything..

It is true that keeping money traded on centralized exchanges is risky at times and can be controlled at times which can lead to inconvenience at times.  But I have seen that in many countries decentralized exchanges do not have the convenience to take their own money or currency due to which people are bound to trade in centralized exchanges and exchange it in their own currency through P2P.

Yes, it's possible that a trade pair for your national currency doesn't yet exist on Bisq. Peer-to-peer trading can happen outside of it too, though of course more risky. There are / were even escrow services for this right on this forum, I believe. Where a trusted member of the community escrows the transaction so both sides are secure. Maybe this could be a solution for you. Also feel free to open a thread on https://bisq.community/ with new trade pair suggestions and encourage people in your local community to make use of it once it's added.

[tranthidung]

You bring up some very good points. I noticed that the less confident people are about their understanding of finance / economics and technology, the more they trust me and are open to learning, also by researching and reading themselves. On the other hand, people who already dabbled with stocks or who have an education in the field of economics do show these 'hustler-wannabe' traits and clearly find themselves on the spike of the Dunning-Kruger curve. It's much harder getting them to learn, because for that you first have to convince them of the harsh truth that they don't know everything..

Nice graph that reflects the truth that newbies are mostly always positive when they participate in a new area. Unfortunately, in early days, they usually receive good results and temporary profit that mislead their thinking that they are actually genius. Then, they 'bet' (I use the bet term because it exactly reflects what newbies think of themselves and what the truth is) and go all in.

Consequently, because of lack of knowledge, experience and peak of mount stupid, they will be punish painfully by the market. From the hell after being killed by the market, they will have to go through a very long period of pain and regret, some of people who can survive through that challenging period will see harvesting time later. Just part of survivors will harvest sweet results later because most of them will repeat their mistakes later.

In any market, it's around 20% winners and 80% are losers. Pareto principle

[dlightag]

That is well noted information been share, as you stated it early, the restriction of crypto trading and investment has been a major concern in many country in the name of Known Your Customer (KYC), in centralized exchanges, which government against on. Never the less blockchain technology is transparent, which they are many decentralized exchanges where you can buy and trading including the once already mention as the case may be.

[Avnerochi]

It kind of counteracts the whole concept of cryptography... if they are asking you for verification to unfreeze your coins then it loses it's all meaning of being uncentralized

[Bamjos]

Wow, this is a real eye opener, I've always thought in this line before but I wasn't clear on it. For some reasons I felt decentralised exchange would be better for cryptocurrency, but then I looked at the advantage some of these centralised exchange (like binance and kucoin) have in the area of P2P transaction, there's great security and the transaction is very much under control.

But looking at the matter wholistically, decentralised exchange truly would be the best. I once thought of this that when the major aim of cryptocurrency is to eliminate the intermediary (centralization) factor, why should there still be Centralised exchange? It appears to me like Cryptocurrency is not serving it's ordained purpose (to be a decentralise currency).

[o_e_l_e_o]

It appears to me like Cryptocurrency is not serving it's ordained purpose (to be a decentralise currency).

It's not bitcoin that is failing here. Bitcoin is, and always has been, decentralized. It is very straightforward to buy, sell, trade, use, spend, hold, and anything else you want to do with bitcoin without ever touching a centralized exchange or other financial institution. You can buy peer to peer with other users, you can hold your own keys in your own wallet, run your own node to verify transactions and blocks yourself, spend directly with merchants in exchange for goods and services, and so on. You never need to give up your security and your privacy as demanded by centralized exchanges to use bitcoin.

The problem here isn't bitcoin, but rather people being all too willing to give up everything that bitcoin stands for - sovereignty over your money, censorship resistance, no third parties, decentralization - in exchange for a little bit of convenience.

[KingsDen]

The problem here isn't bitcoin, but rather people being all too willing to give up everything that bitcoin stands for - sovereignty over your money, censorship resistance, no third parties, decentralization - in exchange for a little bit of convenience.

Thank you senior mate o_e_l_e_o for this;
People are very much lazy and afraid to handle their wealth themselves. We exchange our privacy and security for a little bit of convenience. Though, what you see as little convenience might mean much to them. The inability to man up to to our personal task is the reason we have bank accounts, then have bank managers, then financial advisors, relationship managers, investment advisors and to every aspect. Many do not want to take responsibilities and that  is why bitcoin appears to be so much technical to them.

[BlackHatCoiner]

Bump.

South Korean exchanges delist Litecoin, because consensus was found to implement the MimbleWimble upgrade. They're removing it, because they don't want your privacy, it can't become more clear than that. Same has happened with Monero. As it's already proved again, fungibility ≠ privacy.

It's time for the users to start delisting the exchanges.

[NotATether]

It's time for the users to start delisting the exchanges.

I know this is cliche, but how are we going to achieve this when exchanges are hanging paltry sums of $5, $10 over users' heads for "learning crypto", "verifying your account" and so on? You won't believe how many people would run after that tiny sum.

[BlackHatCoiner]

I know this is cliche, but how are we going to achieve this when exchanges are hanging paltry sums of $5, $10 over users' heads for "learning crypto", "verifying your account" and so on?

With education. Sure, if a person doesn't care of having every right that's written in the first page infringed, wants to trade shitcoins, upload his documents, play with a x10 margin call, leave all of his coins to the exchange and so on, it's impossible to convince him do otherwise.

But, if he's interested into actually using bitcoin because of the fundamentals, he ought to opt himself out of this opaque, weak and corrupted exchanging system. Even if he's already left footprints. Better late than never.

[m2017]

It's time for the users to start delisting the exchanges.

I understand your wish and I fully support the opinion that it is not necessary to use centralized exchanges. Now there are many alternatives for buying / selling crypto and it is easy to do this without using centralized exchanges with their extremely unprofitable and inflated prices for withdrawing funds and KYC. I assume that centralized exchanges will still attract beginners and traders despite all the shortcomings. Firstly, because beginners don't know alternative methods / platforms, and secondly, because where else can traders to trade shitcoins. The influx of beginners and traders will never stop, therefore, even if all users heed your call and delisting exchanges, then all the same, centralized exchanges there will be an impressive user base.

[n0nce]

I know, shameless plug; but I believe this fits the topic and will be very useful to newbies, too.

[Blacklist] of unreliable, 'taint proclaiming' Bitcoin services / exchanges

The (of course centralized) exchanges listed in this topic are especially untrustworthy by being proven to confiscate your coins if they believe you got it from gambling or other activites they don't like (directly or indirectly). Keep in mind that you can receive 'tainted funds' by someone you do legit business with, and you can be a totally legal person and still get your coins confiscated.
I can't imagine how it must feel to deposit a large sum of money that you got by selling goods legally, on an exchange, just to find out they confiscated it because some of the people you did business with, might have got their coins through supposedly 'illicit activities'.

[Charles-Tim]

It's time for the users to start delisting the exchanges.

People that wants privacy are just few from other people that do not even know what privacy is as fiat system has totally deceived them. If you ask some people that do not mind of having privacy why privacy is not needed, they will say when they are not thief or aiming to be involved in any online criminal activities, that privacy is not what it is necessary for them. They do not know the negative aspect of not being private online, like in data leak and also in possible way they can be traced to their home or real identity if their data leaked to online criminals. So, even the privacy people are most likely not using the exchanges as KYC policies had become very strict in South Korea since last year after their government has made it mandatory the exchanges to follow certain KYC laws that their customers should abide to before making use of any South Korea exchange.

[tvplus006]

I see in this thread only opponents of centralized exchanges, but in fact most traders use CEX because of the greater functionality for trading. I myself very often use various decentralized exchanges to buy new coins that are not yet available on centralized exchanges.

[n0nce]

I see in this thread only opponents of centralized exchanges, but in fact most traders use CEX because of the greater functionality for trading.

That's a good point; but I don't really believe you need privacy, untraceability or even self-custody if you see cryptocurrencies as just a means of speculation / trading. Because then you're just buying coins to sell them higher later. Traders don't aim to use the coins as anonymous, P2P cash anyway. They only want to maximize fiat holdings and never intend to actually use the currency. So therefore they couldn't care less about anonymity and privacy, right. That's a whole different use case.

Centralized, KYC exchanges might be a legit option for serious traders. However newbies should probably not trade in the first place.
What Can Happen If You Want to Trade Cryptocurrencies, but You Don’t Know How?

Maybe we should establish a distinction between:
(centralized) KYC exchange = best compared to stock exchange; for traders, looking to maximize fiat profits and
(decentralized) no-KYC Bitcoin on-ramp = novel concept, captures the spirit of Bitcoin (P2P), gets people Bitcoin without ties to identities and allows them to spend it anywhere and everywhere.

I myself very often use various decentralized exchanges to buy new coins that are not yet available on centralized exchanges.

That's interesting! Do you have an example? I was under the impression that it's easier to find liquidity of altcoins on centralized exchanges rather than decentralized exchanges (just due to the fact that they have less liquidity in general).