Why use decentralized bitcoin in a centralized way?

[Floxynice]

In the early days of Bitcoin, I think some users were really up to keep Bitcoin as decentralized as possible. They seems to be outnumbered already and some are just shying away because users are becoming used to the centralization.

Maybe because the idea that Bitcoin will not grow with out the regulation of the government so we gradually get used to KYC already, we are now INSTITUTIONALIZED. 

People who're using Bitcoin in decentralized way are privacy oriented or value security over money, so they won't shift to centralized way. It just new people who interested with Bitcoin tend to choose centralized way since they lack of knowledge or they're money oriented person.

Nope, the idea of Bitcoin will still grow, no matter how strict is the regulation, there's always a way to get rid from centralization, check kycnot.me there are many no KYC sites.

Bitcoin is money, asset, people who are using bitcoin in a decentralized way are people who value money above all else because they want to keep their money as private as possible. Those who prefer to use centralized exchanges because they don't care about privacy, they like simplicity and convenience. And both of these types of investors value money and all care about money, if they didn't care about money, they wouldn't invest in bitcoin.

You're right, no matter how strict and harsh the government is, there will always be a solution for us to use bitcoin in a decentralized way, the problem is whether we want it or not.

Government regulations are always in favour of the government. I still believe decentralization is the best way we can have greater financial control over our assets. From the replies so far, it is clear that not everyone will be willing to use bitcoin the decentralized way, this isn't supposed to be a problem as their decision doesn't stop the next person from using bitcoin the way it pleases him.

[Z-tight]

We use decentralized Bitcoin in a centralized way because we cannot use exchanges that are compliant to the local laws due to the regulations being implemented so we are forced to do KYC as we are using their services and that us how I think it works.

I can understand that, but there are also p2p exchanges that you can use, and in them you do not have to submit kyc, they don't harvest data like centralized exchanges. The crazy part of it all is that some people do not only trade in centralized exchanges, but they also store their funds in such custodial platforms, and that is what i think is the worst of all, even if you trade in centralized exchanges, you should do well to move your money into your self custody after you are done.

[highalch]

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

It's as easy as pressing the withdraw button on that exchange. No, seriously.

The price you pay is the due diligence you did or did not do. Learn how to securely use a hardware wallet.

[oktana]

To use bitcoin the decentralized way, you simply have to ensure that you’re the only one who has access (private key or mnemonic phrases) to your Bitcoin. It’s that simple. For those who use decentralized exchanges, one of the reasons is how easy it is to use but the smart ones know that decentralized exchanges are only used to trade (buy or sell) and not to store Bitcoin. And for those who use Bitcoin bank i honestly don’t have any clue what’s going on in their head. Lol

Honestly there's nothing wrong to hold your coins in decentralized exchange, but make sure it's a real decentralized exchange in the first place!

The real decentralized exchange is bisq, it's better to hold there rather than hold in centralized exchange. Bisq has no central server, even government shutdown the site, we can still access our wallet and the exchange.

And wait... what's exactly "Bitcoin bank"?

You can’t hold your coins in a decentralized exchange. I mean; you’re the one who holds it, but you say it like it has to be in the “exchange”. Using  decentralized exchange is simply connecting your wallet so you can make trades. Also, it’s best to have a wallet for this. So you can connect and disconnect safely, and you only send the asset you want to trade at the time you’re trading it. I don’t find it wise to use a wallet with too many assets and trade directly.

Bitcoin bank; centralized bank to store your bitcoins.

[bettercrypto]

Pardon me if I am digressing, I am still in the learning process.
I have been reading about  Bitcoin since i joined this forum. I learnt that decentralization is a unique attribute of Bitcoin. And this attribute permits bitcoin users to have total control over their money and be their own banks.

From my research recently, I have come to realize that a lot of bitcoin users are still stuck with the traditional idea of saving money with a central authority. Importing this idea to a decentralized Bitcoin, has led to the invention of bitcoin banks, exchanges and custodial wallets. Now, as the day passes, more bitcoiners are becoming centralized.  Is there a club or group of only people who uses bitcoin the Satoshi way, I will like to belong here.

I do not want to use bitcoin the centralized way, I want to have total control of my coins and be my own bank. Is this difficult to achieve? Are there prices I have to pay or is everyone eventually moving to the centralized way?

It's very simple: in decentralization, we have full control over the bitcoin or crypto assets that we will buy, while in a centralized-based system, we don't. That does not mean that it is not good to choose a centralized-based system; of course, that is not what we want to say.

There are also instances where CEX does not have the Dex platform, like p2p features most of the time. When CEX is reputed, it is also good, especially if there is a big issue that is resolved immediately, unlike DEX, where the risk is a bit higher compared to CEX. This is just my idea and what I know about it.

[wxa7115]

We use decentralized Bitcoin in a centralized way because we cannot use exchanges that are compliant to the local laws due to the regulations being implemented so we are forced to do KYC as we are using their services and that us how I think it works.

I can understand that, but there are also p2p exchanges that you can use, and in them you do not have to submit kyc, they don't harvest data like centralized exchanges. The crazy part of it all is that some people do not only trade in centralized exchanges, but they also store their funds in such custodial platforms, and that is what i think is the worst of all, even if you trade in centralized exchanges, you should do well to move your money into your self custody after you are done.

I have noticed this and quite often the reason for traders to behave this way is that they do not want to spend additional money each day on fees, and they also do not want to have to wait for a few minutes or hours to get a transaction confirmed.

As if they did this then they may miss a movement on the market, but the trade off is that by keeping their coins in a CEX they are risking that the exchange may scam them, go bankrupt or get hacked, events that while in theory should be rare, they are common on this market.

[Plaguedeath]

We use decentralized Bitcoin in a centralized way because we cannot use exchanges that are compliant to the local laws due to the regulations being implemented so we are forced to do KYC as we are using their services and that us how I think it works.

Where are the regulations that forbid to use no KYC P2P and DEX? if you mean in your country, it's no problem to post the documents here. I just want to see if your government really blacklist unregulated sites usage instead of making own assumption.

There are also instances where CEX does not have the Dex platform, like p2p features most of the time. When CEX is reputed, it is also good, especially if there is a big issue that is resolved immediately, unlike DEX, where the risk is a bit higher compared to CEX. This is just my idea and what I know about it.

What's the risk in DEX, what issue that happened in DEX and didn't resolved immediately? please make sure it's a real DEX, not fake DEXs e.g. Uniswap, Sushiswap, dYdX or any other swap platform that claimed to be DEX.

[Saint-loup]

Unfortunately Bitcoin is not Turing complete, the instructions it is able to execute are very basic, so it can't be used to create sophisticated smart contracts like EVM cryptos. It means you can't use this crypto for Web3 dapps, DEX or DAO. So for any advanced use cases, you will need to deal with centralized platforms unfortunately. BTC is designed for very basic payment transactions, this makes it reliable and robust but it comes with drawbacks and limitations sadly. That's why some people consider it as a good cryptocurrency for payments and value transfers, but not as a good technology for future evolved use cases.