Why does Bitcoiner still support the use of centralized exchanges?

[initim]

Centralized exchange is more popular and easier than the decentralized hence the reasons investors will go for the popular one.We all want the More comfort.

[mvdheuvel1983]

I did some research on Bitcoin because I was interested in it, and I discovered that the key principles of Bitcoin are peer-to-peer, anonymity, pseudonymity, decentralization, and operating without a middleman to ensure that Bitcoiners can have financial freedom. However, despite knowing that Bitcoiners adhere to these tenets, why do some Bitcoiners act contrary to them? Why do they continue to support centralized exchanges, use them, and retain their Bitcoin there?

I listened to an radio interview on this and the reason the person give was that, most people who go contrary to them are newbies. Because they do not yet have a lot of bitcoin holdings, they do not see the need in using a decentralized exchange. According to them, they are more familiar with it.

Another reason is that rule/law regarding bitcoin in some countries has made centralized exchanges like Binance the saviour for people to easily conduct peer-to-peer exchange. They have created the platform for them. In addition, there are some free incentives they get for using centralized exchanges.

[BlackHatCoiner]

I'm all in for decentralized exchanges, except the cost comparably to a very small fraction of centralized exchanges. Namely, Robosats. In my opinion, besides custody and the trust required, there isn't a single other reason I would prefer a DEX. It's cheaper, and has less liquidity (which is in favor of the trade maker sometimes).

But that's just an exception (which might also shut down at anytime) in the vast ocean called CEX. Bisq is my second option, and it will surely become the first if the DAO decides to be more competitive.

[The Cryptovator]

To be transparent, we do not endorse the use of centralized exchanges, even though some of us may be utilizing them. Personally, I must admit that I still use centralized exchanges for various reasons. Firstly, trading on centralized exchanges is more convenient and there is a higher level of liquidity. Although it's not ideal to hold our funds there, I always transfer my funds to my ledger wallet for added security. When I need to convert my assets into cash, I am compelled to use centralized exchanges due to their wider availability.

Additionally, centralized exchanges offer a broader range of trading pairs, enabling us to trade tokens that we are interested in. Decentralized exchanges may not always be an ideal solution for this purpose. The latest trading features are usually available on centralized exchanges, which is another reason why I prefer them. However, if decentralized exchanges offered the same benefits and facilities, I would happily switch to them.

[Minecache]

Yes, bitcoin was initially created as a payment method that could work without a 3rd party. But nowadays, people are considering and using bitcoin as an investment, they are less concerned with the function and utility of bitcoin but only interested in profit and convenience for them. And CEX provides all the services that investors need in the most convenient way. 
Moreover, the market is not only bitcoin, but we also have altcoins, and if you want to invest, buy, sell, and trade altcoins, you must go with CEX. It can be said that it plays an important role in the market whether you use it or not because people still need it.

...
Centralization and decentralization will exist together for a long time to come.

Since bitcoin was created, more people started to pay more attention to decentralization and privacy. But what I fear more is that governments won't leave us alone if most of us look to decentralization and ignore their centralized services. They are drafting regulations, and regulations will be a huge barrier for us. I am afraid they will squeeze everything and find a way to destroy our privacy even if we use bitcoin to evade them.
I don't know what measures they will use to control us, many say they will use centralized exchanges, but that is only part of it, they will have many more.

[justdimin]

I think it is much more easier, convenient and even safer to use centralized exchanges for trades because we no longer have to pay for an external escrow and most times don't have to panic over the safety of our coins while indulging in trades.

What are you talking about? Centralized exchanges lock accounts, freeze coins, or just straight up scam/go bankrupt all the time. You are handing complete control of your coins over to a third party, who can (and often do) do anything they like with them. With a good decentralized exchange like Bisq, the coins stay under your control until the trade is complete. There is no possibility for them to steal your coins since they never have them in the first place. A good DEX is exponentially safer than a CEX.

I basically don't store my coins in centralized exchanges but I trade most times on those exchanges like binance  and I like the entire experience I get from there and there there also possibilities of stealing coins on those private exchanges ?
I would love to know the risk of associated with using private exchanges apart from not being a sole holder of your coins.

That depends on the exchange that you are using. If you are using Binance then I would say that it is as safe as it gets, most probably it is safer than using any type of wallet yourself, because binance can do security better than any of us can do.

However, if you are using some small volume place, they could just exit scam everyone and steal their money, that would be a troubling thing. I hope that it wouldn't really become something boring and risky, I hope that it does as well as hoped for, but that doesn't change the fact that I would not be doing anything risky. Just keep it at a safe place if you want to, but using Binance would be enough for you, unless you have millions of dollars, in that case find something that is even safer.

[Obari]

I think it is much more easier, convenient and even safer to use centralized exchanges for trades because we no longer have to pay for an external escrow and most times don't have to panic over the safety of our coins while indulging in trades.

What are you talking about? Centralized exchanges lock accounts, freeze coins, or just straight up scam/go bankrupt all the time. You are handing complete control of your coins over to a third party, who can (and often do) do anything they like with them. With a good decentralized exchange like Bisq, the coins stay under your control until the trade is complete. There is no possibility for them to steal your coins since they never have them in the first place. A good DEX is exponentially safer than a CEX.

I basically don't store my coins in centralized exchanges but I trade most times on those exchanges like binance  and I like the entire experience I get from there and there there also possibilities of stealing coins on those private exchanges ?
I would love to know the risk of associated with using private exchanges apart from not being a sole holder of your coins.

That depends on the exchange that you are using. If you are using Binance then I would say that it is as safe as it gets, most probably it is safer than using any type of wallet yourself, because binance can do security better than any of us can do.

However, if you are using some small volume place, they could just exit scam everyone and steal their money, that would be a troubling thing. I hope that it wouldn't really become something boring and risky, I hope that it does as well as hoped for, but that doesn't change the fact that I would not be doing anything risky. Just keep it at a safe place if you want to, but using Binance would be enough for you, unless you have millions of dollars, in that case find something that is even safer.

Exactly mate and I always find very safe and secure especially when using the two factor authentication and most times people forget that same person who owns binance also owns trust wallet and if anything happens to binance, it might at some point get to affect trust wallet and there is this new scam going on with trust wallet where the seed phrase is gotten and all the available coins wiped out, hence no where is safe except you practice the right security measures.

[Woodie]

Why do they continue to support centralized exchanges, use them, and retain their Bitcoin there?

A decentralized exchange  usually is limited to what it can do if compared to a centralized exchange, like the number of blockchains it can support. So technically a cex is far much superior and can house all sorts of blockchains all under one roof something that can be the main reason for their continued use.

Liquidity is another reason, most Dex(s) usually don't have much of it and price is usually so bad compared to a Cex which will show true market prices for anybody wanting to buy/sell.

Centralized exchange is more popular and easier than the decentralized hence the reasons investors will go for the popular one.We all want the More comfort.

Agreed, useability with Centralized exchange is by far so much easy on these platforms compared to a dex which requires a bit of common sense and technical know how  to get around.

[o_e_l_e_o]

I would love to know the risk of associated with using private exchanges apart from not being a sole holder of your coins.

I mean, millions of users have lost everything from centralized exchanges scamming, going bankrupt, or simply locking accounts, so not holding your own coins is the biggest risk. There is also the risk to your privacy of course. Not only do you have zero financial privacy with the CEX monitoring everything you do and where your coins come from and go to, but you also have to hand over all the information and documents necessary to steal your identity and ruin your life.

That depends on the exchange that you are using. If you are using Binance then I would say that it is as safe as it gets, most probably it is safer than using any type of wallet yourself, because binance can do security better than any of us can do.

This is just factually incorrect. Binance have been hacked multiple times, both for coins and for data, not to mention the possibility of a bank run or other external event they can't control. Coins on any CEX, Binance included, are never safe.

[CryptSafe]

I did some research on Bitcoin because I was interested in it, and I discovered that the key principles of Bitcoin are peer-to-peer, anonymity, pseudonymity, decentralization, and operating without a middleman to ensure that Bitcoiners can have financial freedom. However, despite knowing that Bitcoiners adhere to these tenets, why do some Bitcoiners act contrary to them? Why do they continue to support centralized exchanges, use them, and retain their Bitcoin there?

I really see your points as you have said. Although it is true that bitcoin was invented for such purpose and it is in its course of fulfilling the sole reason it was invented. Come to talk of bitcoin peer to peer transaction, I believe a peer to peer transaction definitely would require two parties meeting to do transfer one on one which do not also guarantee ones safety of the account holder and it does not reflect the pseudo or anonymous transaction for which Satoshi Nakamoto clearly stated.

 Although CEX are not  pseudo or anonymous and they demand for kyc before depositing with them but the peer to peer with the CEX are anonymous and ok to go with just as the DEX is.

Do not get me wrong and also do not get things twisted. The CEX have played a big role in aiding the far and wide spread of Crypto currency including bitcoin to a global scale purchase and accessibility. Without the CEX and DEX, bitcoin and other Crypto currencies would have been limited in circulation in speed compared to the initial time bitcoin came to existence.

 So in all sense,  I believe someone people wants to remain anonymous through that means by dealing with CEX and DEX rather than doing a peer to peer or a one on one that would reveal their identities an possibly keep their wallets activities on track by their counterpart.

[BVeyron]

I did some research on Bitcoin because I was interested in it, and I discovered that the key principles of Bitcoin are peer-to-peer, anonymity, pseudonymity, decentralization, and operating without a middleman to ensure that Bitcoiners can have financial freedom. However, despite knowing that Bitcoiners adhere to these tenets, why do some Bitcoiners act contrary to them? Why do they continue to support centralized exchanges, use them, and retain their Bitcoin there?

Centralised exchanges are an imminent phenomenon, since people got used to buy things in fiat, so for most people involved in cryptoindustry, cryptocurrencies are just a tool to earn in fiat. And fiat banking systems are highly centralised, no one will ever pay fiat without tax report...

[Baoo]

Simply, Centralized exchanges are easier to use for beginners than decentralized ones and have more advanced tools. In addition to that, they offer tech support unlike DEX  and by using their platforms you are allowed to buy crypto with FIAT. In fact, crypto users especially newbies are more looking for simplicity through easy operation and regulation. Regrettably, centralized exchanges have a plenty of cons  such as risk of getting hacked, no anonymity, your funds are completely controlled by them.
As far I am concerned DEX’s have not been known well yet due to they are newer than CEX’s. Possibly more Bitcoiners or generally crypto users will move to DEX once they get to know the advantages of them.

[boyptc]

Exactly mate and I always find very safe and secure especially when using the two factor authentication and most times people forget that same person who owns binance also owns trust wallet and if anything happens to binance, it might at some point get to affect trust wallet and there is this new scam going on with trust wallet where the seed phrase is gotten and all the available coins wiped out, hence no where is safe except you practice the right security measures.

What is that type of new scam that's happening with Trust Wallet? Isn't it that it's always been the same scams out there that's currently targeting any type of wallet?

Simply, Centralized exchanges are easier to use for beginners than decentralized ones and have more advanced tools. In addition to that, they offer tech support unlike DEX  and by using their platforms you are allowed to buy crypto with FIAT. In fact, crypto users especially newbies are more looking for simplicity through easy operation and regulation. Regrettably, centralized exchanges have a plenty of cons  such as risk of getting hacked, no anonymity, your funds are completely controlled by them.
As far I am concerned DEX’s have not been known well yet due to they are newer than CEX’s. Possibly more Bitcoiners or generally crypto users will move to DEX once they get to know the advantages of them.

Anyone likes simplicity and ease of using it and that's why everyone is still with the cex's and if anyone who's using a dex finds it easier to use, we just have an option to use whatever we want.

So in all sense,  I believe someone people wants to remain anonymous through that means by dealing with CEX and DEX rather than doing a peer to peer or a one on one that would reveal their identities an possibly keep their wallets activities on track by their counterpart.

But with cex, we're giving up our privacy and that purpose is being defeated because most of them ask now kyc.

[Ale88]

there is this new scam going on with trust wallet where the seed phrase is gotten and all the available coins wiped out, hence no where is safe except you practice the right security measures.

Would you mind explaining this scam you're talking about? Scam from who? From Trust Wallet, hence Binance is scamming people? Or the scam has nothing do to with Binance? How do these people get the seed phrase? Do they trick the owner or can they just get it without any kind of real interaction? Just to understand if it's an app problem or just social engineering as usual.

[Hamza2424]

The concept of the bitcoin was established to remove the central authority power and to distribute the rights in segments/nodes to create a transparent environment. Time passes and the market continued to grow to control this idea centralized exchanges where introduced and the idea worked they provided some greedy features to the users of the space and attracted them then controlled their funds in the market which was created in the name of decentralization. So sad but this has happened to us and now these centralized exchanges and platforms which provide major services in the market control the market most of the time.

I was one of the centralized exchanges supporters until the last few weeks I use to say that centralized exchanges have done a lot in the adoption of bitcoin and crypto technology but I have recently realized that the have done it in their own favor to attract more users and control more market capital. They trigger us against the law enforcement and government centralized policies then do the same on the name of revolution.

[panganib999]

Basically over the fact that Centralized Exchanges are just extremely convenient and tailored towards that concept. They act as a means to safekeep and easily manage user's funds for when they wanna trade or sell their cryptocurrencies from the get-go. Plus most of them give rewards that you normally wouldn't get from regular exchanges. These are the major reasons why Centralized Exchanges are selling like hotcakes despite the fact that they are practically the unwanted son in the industry. Still, they are slowly slipping away from their throne as the big thing in the industry after multiple flaks against the name, with the only remaining exchange being Binance.

[o_e_l_e_o]

Come to talk of bitcoin peer to peer transaction, I believe a peer to peer transaction definitely would require two parties meeting to do transfer one on one which do not also guarantee ones safety of the account holder

You don't need to meet at all and the bitcoin being traded can be placed in escrow prior to the trade for safety. There are plenty of platforms such as Bisq and Robosats which have such a system in operation.

Although CEX are not  pseudo or anonymous and they demand for kyc before depositing with them but the peer to peer with the CEX are anonymous and ok to go with just as the DEX is.

Not correct. Trading peer to peer on a CEX is not in the least bit private or secure, since the CEX watches everything you do, reports it all to blockchain analysis companies, and has complete control over your bitcoin while the trade is taking place. You cannot trade peer to peer on a CEX - it is always peer to CEX to peer, with the CEX being a centralized third party. All CEXs which offer "peer to peer" are simply using the term as a marketing gimmick - it isn't actually peer to peer at all.

[Mate2237]

I did some research on Bitcoin because I was interested in it, and I discovered that the key principles of Bitcoin are peer-to-peer, anonymity, pseudonymity, decentralization, and operating without a middleman to ensure that Bitcoiners can have financial freedom. However, despite knowing that Bitcoiners adhere to these tenets, why do some Bitcoiners act contrary to them? Why do they continue to support centralized exchanges, use them, and retain their Bitcoin there?

Hey mate! I know that you have also used the central exchange platforms for transactions and you know the purpose of those platforms and also know the basic concept of Bitcoin. Those central platforms are carrying out some of the purposes and functions of Bitcoin. Those are the digital banks bitcoin, so bitcoiners use those platforms to make fast and easy transactions. There are some locations that there are no vendors so in such location your have to use the exchange platforms for the transactions.

Your financial freedom with Bitcoin is still guarantee because the exchanges do not or can not have access to your wallet. And the main thing is the wallet. It is when you transfer your coins to the exchange that you will make the transactions.

[Obari]

there is this new scam going on with trust wallet where the seed phrase is gotten and all the available coins wiped out, hence no where is safe except you practice the right security measures.

Would you mind explaining this scam you're talking about? Scam from who? From Trust Wallet, hence Binance is scamming people? Or the scam has nothing do to with Binance? How do these people get the seed phrase? Do they trick the owner or can they just get it without any kind of real interaction? Just to understand if it's an app problem or just social engineering as usual.

It absolutely has nothing to do with binance or trust wallet and it's just the social engineering as usual and if I'm not wrong,these scammers have to guess the seed phrase of these accounts and anyone that is gotten correctly, it's been wiped mercilessly.

Apart from the fact that they have the possibility of folding up without getting to let users have their money, I really enjoy using centralized exchanges and I think these exchanges have leveled up and wouldn't just vanish with users money and the case is with that of paxful because I think they're now respecting their users.

[DeathAngel]

Some people are lazy, some are complacent, some aren’t very tech savvy & don’t trust themselves to self custody, maybe they don’t even know how to.

I think whilst bitcoin has been around since 2009, it’s still a relatively new tech. People just aren’t very educated on it. It’s sad but sometimes people get burnt when they play with fire.