Bitcoin, Privacy exchanges, and KYC verification

[Shadiq]

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

CEX is still the first choice for most people when it comes to buying Bitcoin. However, CEX is very weak and risky in terms of security. Although Bitcoin gives us decentralized benefits, we are still reluctant to accept it, we have not yet freed ourselves from complete central surveillance and have not yet achieved Satoshi Nakamoto's goal.

I rely on CEX most of the time when it comes to buying Bitcoin. I was able to deposit only the Bitcoins I received from the signature campaign without using any central exchange. But I have not yet enjoyed the decentralized benefits when it comes to buying. Although DEX is a good option, I am not used to it.

[snowpega]

How will a Bitcoin world without the existence of centralised exchanges be like?

What if this is all we had all along?
...
Can anyone tell me why CZ decide to go with DEx rather, and abandoned Binance?

kYC was a bad idea after all, but we can't control what others do with their Bitcoin, I'm then wondering why this is looking like something that's possible, I believe it would have been a better world without centralised exchanges right from the start.

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

Those who really understand how important privacy is in the crypto space then they will literally hate KYC or CEX platforms. The more anonymous you are, the more secure you will stay. Besides this, there are also options using which you can accumulate Bitcoin using DEX platforms. (DYOR!) And those who are on this forum from very long time can accumulate Bitcoin at their desired destination(wallets). Other than this, CZ is also very aware of the importance of privacy, and especially when it is about long-term holding, then no one will use a CEX platform if they really know how risky it can be holding major funds for the long term on CEX platforms.

[Asiska02]

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

Almost everyone that have own a bitcoin or later found interest to invest in bitcoin had to mostly use a centralised exchange to buy them. Not all method of payment for services accept bitcoin, so it makes it hard for one not to pass through a centralised exchange to buy bitcoin and start an investment through it. Due to how strict the government can be about bitcoin, so many people still prefer to go through KYC’d exchanges to buy bitcoin, even though they’ll later transfer them out into their personal wallet for anonymity sake.

These kind of people have more trust in centralized exchanges than they do for decentralised exchanges and the use of it. Privacy is important and key to every investment in crypto, but due to lack of sufficient knowledge by some investors, they don’t really take privacy serious and just play by the rules of the government which most times exposes their privacy and security. A lot of people are use to centralized exchanges already, it’ll not be easy to take their minds off it or they see the world been a better place without using them.

[Forsyth Jones]

kYC was a bad idea after all, but we can't control what others do with their Bitcoin, I'm then wondering why this is looking like something that's possible, I believe it would have been a better world without centralised exchanges right from the start.

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

Yes, I've already managed to go 02 years without using CEX exchanges. My job allowed me to receive my payment directly in Bitcoin to my wallet, and I would made swaps with some trusted P2P sellers without going through KYC processes.

I believe that the more governments pressure CEX exchanges to reinforce the use of KYC on its clients, the more exchanges will look for other alternatives, such as opening branches in more crypto-friendly countries that don't have formal legal cooperation agreements for mutual data sharing with other countries like El salvador. This way, clients can migrate their accounts to the new branch. The Bybit exchange is an example that is already making this move: https://citizenx.com/insights/bybit-kyc-el-salvador-passport

[Fivestar4everMVP]

kYC was a bad idea after all, but we can't control what others do with their Bitcoin, I'm then wondering why this is looking like something that's possible, I believe it would have been a better world without centralised exchanges right from the start.

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

Well, I remember back in the day, that is in my early days in crypto when centralised exchanges wasn't really a thing in this part of the world, a lot of us bought and sold bitcoin by means of peer 2 peer trading, that is, one could or can come on this forum (for example) and in their local board place order to buy or sell some amount of bitcoins, and who ever is interested in that trade will contact the op and in a couple of minutes, the trade is complete..

A lot of people DCAed into Bitcoin through p2p, but I honestly do not know if this means is any better than centralised exchanges since p2p can also involve giving out ones personal information like real name (which can be seen from the bank account details given to the other party) phone contact, and sometimes a picture or video of oneself in a bid to establish trust, and let me put aside the fact that a lot of scam also happened through local p2p trading back then too.

But then if today, we can have a good privacy focused decentralised exchange that is completely free from kYC, that would definitely be a very good development.

[d5000]

How will a Bitcoin world without the existence of centralised exchanges be like?

Apart from pure convenience and ease of use, there are some other reasons why some people prefer centralized exchanges:

1) They could fear to get "dirty" coins if paying on a DEX like Bisq. It would be interesting how the Mercury Layer exchange mentioned in the OP prevents this.

2) Higher prices on DEXes for coins from trusted long time users.

3) The DEX trading partner could also try to use your account data for malicious purposes. This is above all a problem if you use a standard bank transfer to buy, exposing your bank account number and possibly even your real name.

4) Trust issues, like the DEX trading partner claiming to not having received the payment, and you have no good option to prove the escrower that you sent it. (I think most banks now do provide a signed receipt, but that would again expose more data ...)

I got to the conclusion that CEX and DEX have different tradeoffs and there is no clear advantage for current DEXes, at least for the fiat <-> BTC step. Perhaps it is even better to use a CEX and then anonymize your Bitcoins with different methods (simulating payments, CoinJoins etc.)

Things would be different if we had a fiat transfer method which was anonymous. Yes, we have stablecoins, but then the challenge becomes to buy the stablecoins instead of the BTC ... And cash requires trust or geographic closeness of buyer and seller ...

PS: In the end, the best method for me is to get indeed the BTC for goods and services you provide yourself. It may not be always private, but you circunvent the traditional chain analysis/data mining circuit of CEXes.

[r_victory]

For a long time I used CEX without needing verification; the deposit and withdrawal limits were more than sufficient. In my case, the situation changed because of regulations in my country, and CEXs operating here are required to request KYC. Even so, I can choose from many others that are not required and are available to me. Not declaring BTC or any other cryptocurrency I own can lead to imprisonment and fines, so unfortunately, I have no way to avoid it. My privacy or tax evasion could be my downfall.

DEXs are great for staying in the cryptocurrency environment, exchanging one for another, but they don't offer me the possibility of exchanging for my country's local currency, which is what I need to do most of the time.

[Cryptomultiplier]

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

Almost everyone that have own a bitcoin or later found interest to invest in bitcoin had to mostly use a centralised exchange to buy them. Not all method of payment for services accept bitcoin, so it makes it hard for one not to pass through a centralised exchange to buy bitcoin and start an investment through it. Due to how strict the government can be about bitcoin, so many people still prefer to go through KYC’d exchanges to buy bitcoin, even though they’ll later transfer them out into their personal wallet for anonymity sake.

These kind of people have more trust in centralized exchanges than they do for decentralised exchanges and the use of it. Privacy is important and key to every investment in crypto, but due to lack of sufficient knowledge by some investors, they don’t really take privacy serious and just play by the rules of the government which most times exposes their privacy and security. A lot of people are use to centralized exchanges already, it’ll not be easy to take their minds off it or they see the world been a better place without using them.

This current and modern world where Bitcoin has become a household name, became so because CEX came into existence and that meant more adoption even for those who know nothing about the technology or technical processes involved in owning, holding or using Bitcoin for transactions.

CEX definitely brought more capital and made the Bitcoin ecosystem to evolve to fit spot ETF and other technologies that make it efficient and productive today, but it came at the cost of self soverignty, privacy and regulations of which the original core of Bitcoin was for P2P protocols, and non custodial ownership.

[Faisal2202]

Yes, I've already managed to go 02 years without using CEX exchanges. My job allowed me to receive my payment directly in Bitcoin to my wallet, and I would made swaps with some trusted P2P sellers without going through KYC processes.

I had to buy Bitcoin using P2P, and in the beginning I could not find any trusted seller. Hell, I still have not found one. I had to trust CEXs for this, but recent account seizure problems have been creating some problems now, and I am trying to find a trusted person because if we are making such deals off-chain, then the chances are really high that they could throw us under the bus. While on CEXs these chances are also high, at least we have a platform to prove the deal if anything goes wrong.

While in deals like this, an agreement can be objected to by both parties in case of fraud by either one.

How did you find one? Can you share your method?

[coinlary]

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

Yes but in my country it's a bit hard thing to do and you will eventually spend extra just to get a coin not linked to your kyc,  that doesn't  mean it can't  come from a Centralised exchange depending on source.

The source I used didn't  come from a CEX but along the line I eventually switched back to using a CEX  which is much more easier to do here, can't  afford to sacrifice 5~10 bucks(which will eventually worth x2) on every DCA attempts .

[Hamza2424]

Can anyone tell me why CZ decide to go with DEx rather, and abandoned Binance?

kYC was a bad idea after all, but we can't control what others do with their Bitcoin, I'm then wondering why this is looking like something that's possible, I believe it would have been a better world without centralised exchanges right from the start.

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

He said, in the future decentralized exchanges will become larger than centralized ones, and it is a huge claim, but he never bluffs, so I would agree with him. But also, if he is making this statement, it does not mean he has abandoned CEXs. It is just the nature of the market. It always shifts from one type of usage to another.

So bro, he has not abandoned Binance, although he stepped down as CEO due to the terror funding case.

I have used DEXs for alts mostly, but never consistently DCAed with them. I have bought Bitcoin on them, but not for holding, only for trading or testing purposes.

[Ucy]

Ofcourse, kyc is a violation of privacy except the exchanges can guarantee they don't, by collecting private data in privacy-friendly manner. But we can't trust their guarantee without full, permissionless and constant access to the exchanges to verify the gurantee or proof. Unfortunately, only decentralized exchanges/platforms can give that kind of access as far I can tell.

In regards to decentralized platforms and privacy, there is a difference between staying anonymous on a transparent/public platforms vs staying anonymous on opaque ones ..  The first is compatible with Bitcoin principle while the latter can be easily abused. We hope they find ways to prevent abuses by, for example, including automated checks on addresses for stolen funds (for example) before transactions are allowed.
I think the so called Darkpool is an interesting idea because I thought such things would be important in betting-like platforms to prevent the system or people from working against people's bets.
This idea should help minimize the publication of movement of funds from one address to another and help prevent/minimize speculation and extreme movements of the Bitcoin price especially at the negative side. That of kind of behavior (like the publication of movement of funds) is why this Darkpool thing becomes necessary, which is why I'm not really against it. But care must be taken to prevent abuse otherwise government will most likely intervene.

A decentralized/responsible platforms should self-regulate or governments will be forced to intervene

[taufik123]

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

When many people on this forum will prefer BCA, using the bitcoin gotten from the signature campaign they are participating in. Do not mind me that I used BCA. What I mean their is bitcoin cost average, that they do not buy bitcoin with dollar but they are receiving it from the signature campaign that they are on this forum.

This is what I have been applying for a long time, never making any deposit with a bank account to buy Bitcoin, instead of buying I get Bitcoin from signature campaigns, from contests and more.
All are collected in 1 wallet or several wallets according to the contest and signature I participated.

That way I no longer need to make gradual purchases with Dex or CEX.
But in the past several times I have done DCA at my local exchange even though I have to do KYC.
And talking about KYC, it is not completely avoidable because in the end it requires an exchange to exchange with Fiat and KYC will still be requested for disbursement at the local exchange.

[MRY]

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

Yes but in my country it's a bit hard thing to do and you will eventually spend extra just to get a coin not linked to your kyc,  that doesn't  mean it can't  come from a Centralised exchange depending on source.

The source I used didn't  come from a CEX but along the line I eventually switched back to using a CEX  which is much more easier to do here, can't  afford to sacrifice 5~10 bucks(which will eventually worth x2) on every DCA attempts .

The additional expenses of escaping formal communications can be unbelievable to normal users. The best solution to the loss of savings due to outrageous network transfer cost is going back to the usual kind of exchanges. The cleverest way to survive in the modern world is keeping the number of coin by reducing the small amounts of money spent.

[Patikno]

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

When many people on this forum will prefer BCA, using the bitcoin gotten from the signature campaign they are participating in. Do not mind me that I used BCA. What I mean their is bitcoin cost average, that they do not buy bitcoin with dollar but they are receiving it from the signature campaign that they are on this forum.

There is only one way to DCA (Dollar Cost Averaging) Bitcoin without using a centralized exchange, and it is; through a p2p (person-to-person) transaction.

As far as I know, dollar cost averaging is only appropriate for Bitcoin installments when an exchange involving fiat is still required. So, I agree with @_act_ who mentioned "BCA (Bitcoin Cost Averaging)". I think the term is perfectly appropriate for Bitcoin installments in any way (whether involving fiat, or not). Furthermore, I also believe that Bitcoin installments (or, Bitcoin Cost Averaging) can also be done through mining.

[AmoreJaz]

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

Yes but in my country it's a bit hard thing to do and you will eventually spend extra just to get a coin not linked to your kyc,  that doesn't  mean it can't  come from a Centralised exchange depending on source.

The source I used didn't  come from a CEX but along the line I eventually switched back to using a CEX  which is much more easier to do here, can't  afford to sacrifice 5~10 bucks(which will eventually worth x2) on every DCA attempts .

The additional expenses of escaping formal communications can be unbelievable to normal users. The best solution to the loss of savings due to outrageous network transfer cost is going back to the usual kind of exchanges. The cleverest way to survive in the modern world is keeping the number of coin by reducing the small amounts of money spent.

We can't get away with third party exchanges as we need to exchange it to fiat somehow or other alts. Hence, centralized exchanges are needed in this market. But you can always check the fees involved and select which ones are cheaper and at least have good liquidity.

[ThemePen]

To be honest, most of those that say they do not put any money into CEXs are not telling the whole truth. P2P platforms are available, such as Bisq but in terms of cash flow, price and user experience, the difference between DEX and CEX is huge.

It makes personal sense for CZ to move towards DEX, particularly in the aftermath of everything that is happened with Binance, the legal heat, the DOJ settlement, the brand damage. In his case, this is very easy choice when it comes to avoiding holding based models.

Better world without CEXs argument is interesting but it is not taking into account the entry problem. For most of those who take their first steps in Bitcoin, cash to crypto routes are still better served by CEXs, than by any other currently existing organization. In today context, a pure DEX world would have significantly slowed down use in the early years.

[X-ray]

Can anyone tell me why CZ decide to go with DEx rather, and abandoned Binance?

kYC was a bad idea after all, but we can't control what others do with their Bitcoin, I'm then wondering why this is looking like something that's possible, I believe it would have been a better world without centralised exchanges right from the start.

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

CZ didn't abandon Binance, he left because there is other CEO taking his position and after his imprisonment I assume he don't want to taint the reputation of Binance anymore.

kYC was a bad idea after all, but we can't control what others do with their Bitcoin, I'm then wondering why this is looking like something that's possible, I believe it would have been a better world without centralised exchanges right from the start.

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

I wish we have more decentralized exchange but liquidity has always been a problem, I have always wondered why centralized exchange gets the most liquidity while decentralized exchange is dry.

The perpetual and derivative ones don't have liquidity problem but the spot and AMM based one always have liquidity problem.

Which is why the market share is still pretty low even today.

[SquirrelJulietGarden]

CZ didn't abandon Binance, he left because there is other CEO taking his position and after his imprisonment I assume he don't want to taint the reputation of Binance anymore.

CZ did that likely because he wanted to leave the company, let it peacefully growing next without him and any legal drama related to him, and possibly because he loves Binance a lot.

But I really disagree with you that the Binance reputation is tainted by CZ, as the exchange success and reputation were built up successfully by CZ and his staffs. Main role and contribution for all these belong to CZ, and it's undeniable.

Before CZ case with DOJ and his decision to give CEO position to Richard Teng, that exchange was strict in listing coins and tokens. Under Richard Teng CEO era, we all witnessed how easily they listing shitcoins, meme tokens just for money. I don't know what you thought but in my opinion Richard Tend has destroyed Binance reputation since November 2023.

Teng joined Binance in August 2021 as CEO of the company's Singapore business. He became regional head of Asia, Europe, and the Middle East and North Africa, in April 2023, and was later the global head of regional markets. He was named CEO of Binance in November 2023, replacing founder Changpeng Zhao who stepped down after pleading guilty to criminal charges related to his management of Binance. Previously, Teng was a board member of Abu Dhabi-based Lulu Financial Group in 2021–2022.

[Abu-Naim]

Tell me, have you ever DCA into Bitcoin without using Centralised exchange? Be honest.

Yes, maybe because I get paid from signature campaigns, but I can’t deny the fact that centralized exchanges have helped a lot of investors adopting the DCA method because not every new investors understands how DEX works, they will prefer to use CEX that is easier, then send their Bitcoin to their personal wallet.

Centralized exchanges may have accelerated Bitcoin’s adoption, but they also delayed many users’ understanding of self-custody.

Yes, most people adopted bitcoin because of centralized exchanges they see always or hear from people using them around them, you will hardly hear people talking about wallets or DEXs, they prefer using exchanges due to how easy it is to use, while letter change to personal wallets when they have learned about site important and how risky leaving their Bitcoin in Centralized exchanges can be.