How important are exchanges?

[krishnaverma]

There's likely been a lot of scam exchanges that have done worse for the space

Most of these are local exchanges. I mean the exchanges catering to people from certain country. On the contrary, a global exchange like Binance is operating at big level and there is less chance of fraud there.

Let me give you an example of my country India. Here , the most popular exchange is WazirX. But there have been reports that it had also been used for some type of frauds and many times the government has seized its funds. But it is still operating and it is the most common exchange in my country. Now one day if they just run away with the funds and holdings of investors, it will be chaos and people will start blaming crypto. It is thus important not to trust exchanges blindly and keep the coins in hardware wallets.

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[doomloop]

Oh, when we talk about audits of some companies I always remember Bernard Madoff's story: I'm sure that for years of his Ponzi scheme there were multiple audits of his company! It looked really safe. But now we know that it was never safe and if was fraud for tens of years!

Even if an exchange looks really safe remember that you risk your money, your own money trusting a third party when you can just keep money at a personal non custodial wallet. Everyone weighs their own risks, but IMO they should keep in mind that there is nothing safe for 100%.

Absolutely true, each person must bear responsibility for their money on their own. I spoke with several people to understand why it is so important for them to save coins on the exchange, the answers were amazing. Someone really believes that it is safe and in case of theft believes that the exchange will reimburse them for everything, and someone thinks that this is important, otherwise he will not have time to buy or sell coins at the best price if he keeps it in his wallet, very strange decisions.

They better verify if their assumptions are true that the exchange that they use will be responsible for their coins because I know that most of the exchanges don't work like that. The other reason that they said seems legit but again it will still depend on the exchange that they are using if they are insured or not.

It can also depend on the coins that they hold or want to buy. If it was a pump and dump kind of coin, then expect that its movements are fast but if it's a top crypto, then they shouldn't worry because they don't dump in an instant right after they pumped up, so even if they kept their coins in their external wallet they can always catch up.

[Newlifebtc]

People knowing they can securely exchange their bitcoin in a centralized and decentralized give them a hope of a quick ready liquid market which builds confidence to hold and pass the good news to family and friends. I started my bitcoin journey in 2017 when I got tired of ponzi schemes. I took my laptop and taught myself how bitcoin works. I only learnt to buy and sell bitcoin via P2P and buyers were more than sellers. I started using CEX in later 2017.

those times you are in for sizing in Bitcoin I believe that we still have some exchanges who who do Transit bitcoin and saw something platform but the problem is that all the exchanges are not popular as it is right now so knowing Bitcoin in 2017 is a newly something which almost all the exchanges has been introduced and if you functioning

[jokers10]

There's likely been a lot of scam exchanges that have done worse for the space

Most of these are local exchanges. I mean the exchanges catering to people from certain country. On the contrary, a global exchange like Binance is operating at big level and there is less chance of fraud there.

Let me give you an example of my country India. Here , the most popular exchange is WazirX. But there have been reports that it had also been used for some type of frauds and many times the government has seized its funds. But it is still operating and it is the most common exchange in my country. Now one day if they just run away with the funds and holdings of investors, it will be chaos and people will start blaming crypto. It is thus important not to trust exchanges blindly and keep the coins in hardware wallets.

Problems with local exchanges (there were multiple examples with hundreds of millions dollars losses which hardly remember anyone outside the country) rarely attract much attention unlike some like FTX or Mt. Gox. Binance is not guaranteed from bankruptcy as any other top global crypto exchange.

So even if an exchange is big and global it is better not to trust it with all assets you have and maximum hold what you need for everyday trading and not more than you are ready to lose.

[sulendra12]

Crypto exchanges are not the safest option though. Your funds are not under your control, it means that if the exchange stops working, you may not get your funds back (like FTX lol). Here is some comparison of wallets and exchanges https://oneart.digital/en/blog/crypto-wallets-vs-crypto-exchanges-which-is-better

That's not the point of this thread though. No one states that you should store your money into crypto exchanges.

So even if an exchange is big and global it is better not to trust it with all assets you have and maximum hold what you need for everyday trading and not more than you are ready to lose.

If you throw your money into somebody else hands then you have a risk your money to lost or stolen. If we are talking about exchanges then if any amount of money you have in that exchange solely for trading within affordable amount then you should be fine as long as you keep track with the update of your exchanges of choice.

[jokers10]

...

So even if an exchange is big and global it is better not to trust it with all assets you have and maximum hold what you need for everyday trading and not more than you are ready to lose.

If you throw your money into somebody else hands then you have a risk your money to lost or stolen. If we are talking about exchanges then if any amount of money you have in that exchange solely for trading within affordable amount then you should be fine as long as you keep track with the update of your exchanges of choice.

As I said, if you are ready to lose all amount held in an exchange account than everything will be fine: in worst you'll lose what is not catastrophic for you, in other cases you'll have all or nearly all your assets and even have an option of earning more. But to keep in mind that every exchange can be bankrupt in theory is important anyway.

[Rjakash]

It is absolutely impossible to transact anything without an exchanger because if you have money but no place to store the money and no system to transact the money then you must get help from a third party or something to figure out how to transact it because you have  You can turn dollars into money and turn your money into tokens or dollars from the exchange because it is both the main sender and receiver of your economy.  Politics depends on your exchange, share market on stock market, and stock market depends on your money and your product, so you must have an exchange, it is very expensive and usable.  So this exchanger has no comparison.

[irhact]

Bitcoins can exist without exchanges, but would you support the argument that the existence of exchanges are among the factors facilitating the popularity and accessibility that people have to bitcoins?

I believe you're referring to the centralized exchange with this topic because you just saying exchange could mean both decentralized or centralized exchange. If you were not referring to any specific exchange but speaking on the fact that exchange in general has brought about a major contribution to the popularity of Bitcoin then that's accurate because without the exchanges there won't have been a means to exchange our assets to fiats or other cryptocurency.
The availability of exchange convince many investors to invest in Bitcoin because now they don't have to trust some unknown individual to send them there coins or money when they want to sell or buy Bitcoin. They can just trust the system which they're using to execute the trade successfully.

[jokers10]

Bitcoins can exist without exchanges, but would you support the argument that the existence of exchanges are among the factors facilitating the popularity and accessibility that people have to bitcoins?

I believe you're referring to the centralized exchange with this topic because you just saying exchange could mean both decentralized or centralized exchange. If you were not referring to any specific exchange but speaking on the fact that exchange in general has brought about a major contribution to the popularity of Bitcoin then that's accurate because without the exchanges there won't have been a means to exchange our assets to fiats or other cryptocurency.
The availability of exchange convince many investors to invest in Bitcoin because now they don't have to trust some unknown individual to send them there coins or money when they want to sell or buy Bitcoin. They can just trust the system which they're using to execute the trade successfully.

Main word you used is trust. And one of the main ideas of bitcoin is to make trustless financial system. So may be investors would better use a system where they see some exchange to trust, but they can use a classical financial system for investing as well. But trustless alternative is what returns a control over our money to us, what is important by itself. So there is a choice: to have entire control over own money in a trustless system or to trust a third party.

[alexandr1115]

Definitely, exchanges have something to do with the popularity of bitcoin. Therefore, it cannot be said that exchanges do not affect the popularity of bitcoin in any way. There are many different advertisements of the exchange platforms themselves. And those who learn about the exchange through this advertisement will then learn about such a concept as cryptocurrency, and, accordingly, learn about bitcoin itself. Exchanges definitely affect the popularity of bitcoin!!

[wastagnn]

The exchange is a cryptocurrency bank, which plays a very important role in the cryptocurrency industry. Of course, it is very easy and convenient for investors to use the exchange to buy and sell Bitcoin, and it also attracts more investors, making cryptocurrency more and more popular. The existence of exchanges brings more people into the cryptocurrency world and plays a vital role in the promotion and mass application of cryptocurrencies.

[TanhyaTrudy]

I think exchanges help bitcoin newbies get bitcoin easier and are easier for newbies to operate. But newbies should avoid frequent trading, and I know this is hard to do.

[LittleBitFunny]

Definitely, exchanges have something to do with the popularity of bitcoin. Therefore, it cannot be said that exchanges do not affect the popularity of bitcoin in any way. There are many different advertisements of the exchange platforms themselves. And those who learn about the exchange through this advertisement will then learn about such a concept as cryptocurrency, and, accordingly, learn about bitcoin itself. Exchanges definitely affect the popularity of bitcoin!!

That's precisely what's going on, although bitcoin can also exist without an exchange but the popularity of bitcoin and the development of bitcoin today has a huge contribution from exchanges. It is a bridge between investors and the market, without an exchange, we would have a lot of trouble accessing bitcoin by fiat. The crash of the FTX exchange makes us feel unsafe using it, but it will be difficult for us to stop using it completely.

[Lillominato89]

Bitcoins can exist without exchanges, but would you support the argument that the existence of exchanges are among the factors facilitating the popularity and accessibility that people have to bitcoins?

I try to say my opinion, which obviously can be shared or not. Bitcoin is a technology! which is likely or not to change the fortunes of future finances. Do you need exchanges? most likely not! if it is seen as a speculative object then it needs a counter value in fiat, but if we look at it as a means of mass adoption then it absolutely does not need the existence of Exchanges

[Casdinyard]

Bitcoins can exist without exchanges, but would you support the argument that the existence of exchanges are among the factors facilitating the popularity and accessibility that people have to bitcoins?

I would agree. Bitcoin in itself no matter how popular it may be wouldn't come this far in utilization if exchanges did not exist. They are the ones who made bitcoin and other cryptocurrencies completely accessible and transactable. I would argue however on the matter that exchanges are the ones that made bitcoin popular. Even in its early days bitcoin is already being talked about by many, and it grew popularity on its own, without any outside help from a third-party entity or whatever. Bitcoin made its name for itself, while exchanges made sure its popularity is reached through multiple facets by many people. It's a mutual symbiosis between the two really.

[cheezcarls]

If you're one of those who think that exchanges are not that important, I assume that you only buy Bitcoin or any altcoin via P2P and just holding it and not trading. Exchanges are not perfect. They have their pros and cons for both CEX and DEX.

In my opinion, most are preferring CEX because of quick transactions and low trading fees at the expense of "not your keys not your coins". It's important if you are so active into either day trading, futures, etc. That's just my opinion of course.

[CryptSafe]

Bitcoins can exist without exchanges, but would you support the argument that the existence of exchanges are among the factors facilitating the popularity and accessibility that people have to bitcoins?

I will argue and agree to the fact that centralised exchange somehow aided the easy access to Bitcoin spread globally. Actually, it also aided in the quick purchase because in most locality you barely see people who will want to exchange via p2p so the only way they can do that is via centralised or decentralized exchange which is easier to access through the internet. In my own research, I found out people prefer trading and buying Bitcoin through exchange than doing p2p. When I inquired about their reasons for doing so,  they told me that they preferred it that way for security and safety reasons as to the large volume or amount of purchase, they said centralised exchange somehow is safe and secured for trading as they do conduct kyc so therefore they are ready assured of their funds and assets. There were lots of reasons mentioned by them but just these few I could list do to cut the long story short, I think OP topic is a good idea and calls for a wide range research.

[S A KHAIR]

If you're one of those who think that exchanges are not that important, I assume that you only buy Bitcoin or any altcoin via P2P and just holding it and not trading. Exchanges are not perfect. They have their pros and cons for both CEX and DEX.

In my opinion, most are preferring CEX because of quick transactions and low trading fees at the expense of "not your keys not your coins". It's important if you are so active into either day trading, futures, etc. That's just my opinion of course.

It is true that exchanges are extremely important and without them the market would not be as vibrant and developed as it is today. I am a trader, and my profits come mainly from trading, and without exchanges, I cannot make profits. I have no reason to stay in this market. Most of the market's trading volume comes from trading, without trading the market would be extremely bleak.

[jokers10]

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they said centralised exchange somehow is safe and secured for trading as they do conduct kyc
...

To come to a decentralized project invented to become anonymous and trustless to choose a centralized intermediary which will totally destroy anonymity with KYC... Ingeniously! (Sarcasm.) Looks like most people who do so just don't understand what Bitcoin is and that there are classical financial assets which have included all that things with a trust to a third party and KYC and it is much easier to use those assets and not Bitcoin if they are interested in that.

[alexandr1115]

Definitely, exchanges have something to do with the popularity of bitcoin. Therefore, it cannot be said that exchanges do not affect the popularity of bitcoin in any way. There are many different advertisements of the exchange platforms themselves. And those who learn about the exchange through this advertisement will then learn about such a concept as cryptocurrency, and, accordingly, learn about bitcoin itself. Exchanges definitely affect the popularity of bitcoin!!

That's precisely what's going on, although bitcoin can also exist without an exchange but the popularity of bitcoin and the development of bitcoin today has a huge contribution from exchanges. It is a bridge between investors and the market, without an exchange, we would have a lot of trouble accessing bitcoin by fiat. The crash of the FTX exchange makes us feel unsafe using it, but it will be difficult for us to stop using it completely.

Of course! Therefore, I believe that exchanges also contribute. But I think that many exchanges also create anti-advertising and reduce the popularity of bitcoin. Therefore, there are both pros and cons here.