The pros and cons of a Decentralized Crypto-Exchange

Decentralized exchanges are a popular way to trade Bitcoin and other cryptocurrencies without the restrictions of larger centralized platforms. They allow users to buy and sell cryptocoins from each other without the involvement of a middleman or a third-party.

All decentralized cryptocurrency exchanges require users to register for an account before they can trade however once they do they can list cryptocoins to sell, or buy someone else’s, almost immediately.

Here are some of the positives and negatives relating to selling crypto on a decentralized cryptocurrency exchange.

Decentralized Cryptocurrency Exchange Benefits

  • Decentralized Servers: Many decentralized cryptocurrency exchanges are hosted on decentralized servers. This means that all of their servers aren’t located within a single location and are often spread out around the world. Some servers can even be truly decentralized by existing solely in the cloud. This method of hosting can make decentralized exchanges much harder to hack than traditionally hosted exchanges, thus making user data and funds more secure.
  • Not Restricted by Law: Not being restricted to one physical location, decentralized cryptocurrency exchanges are much harder to regulate or even shut down. This can be good news for users of Bitcoin and other cryptocoins who live in countries where cryptocurrency is illegal.
  • More Privacy: Most decentralized exchanges do require the creation of an account before you can begin trading. However, unlike more centralized exchanges such as Coinbase which needs to confirm users’ identities via various forms of official government ID, most decentralized exchanges allow anyone to create an account under any name they choose with very little or no approval process. This can be admittedly bad for governments and the finance sector but it is a feature that is becoming more attractive to those citizens who are weary of Big Brother tracking their every move.
  • Coin Responsibility: Centralized exchanges store all of the crypto funds placed on their exchanges which can potentially make them vulnerable to hackers. Decentralized exchanges on the other hand often leave ownership of cryptocurrency in the hands of their users and simply act as a place for peer-to-peer trading.

Decentralized Cryptocurrency Exchange Dangers

  • Still an Option B: Traditional centralized cryptocurrency exchanges are generally much more popular than decentralized ones and as a result often have many more users and active trades. Centralized exchanges also tend to have more money behind them and can afford a better user experience, customer support, and sense of professionalism.
  • Mysterious Ownership: Because decentralized exchanges can be used to avoid regulation, many choose to keep their founders’ identities anonymous. Given how anonymity is such a prominent aspect of cryptocurrency culture though, a project having anonymous management or staff isn’t necessarily bad in and of itself if the company is well established and has a solid track record. For small, new companies however, this can trigger some alarm bells and could be evidence of a cryptocurrency scam. Users should still be sceptical at all times when it comes to their finances.
  • Not Regulated: The lack of regulation, as mentioned above, can be a positive but it also means that there will be very little support from outside parties if a decentralized exchange goes down or is suspected of stealing funds from users.
  • Intimidating to New Investors: Decentralized cryptocurrency exchanges don’t have the mainstream appeal of centralized ones and this can scare away many potential users who only want to work with companies that are officially approved by their country’s government and can be held responsible for a poor customer experience. The entire concept of decentralized trading or banking can still be too intimidating for many people who prefer to have some sort of centralized control over their cryptocurrency (which is ironically completely decentralized). Less users means less active trades on a decentralized platform.

Who Should Use Decentralized Exchanges

Decentralized exchanges should only be used by those with experience in cryptocurrency trading due to its anonymity and potential risk. People who are completely new to Bitcoin and other cryptos trading should check out a more mainstream, centralized service such as Coinbase which is fairly trustworthy and is designed for the casual user.

One of the most shining Decentralized Cryptocurrency Exchange is and I will explain you why its better than other exchanges.

First of all its adoption ready and prepared and opened for any further regulations, also has passed individual and private regulators.

They are complient to KYK/Aml that means you don’t have to be afraid that the day after tomorrow the exchange will be shut down for abusive or illegal practices, Its fully transparent and reliable.

The ownership is publicly shown and also has been giving speeches at cryptocurrency meetings around the world, CEO is called Pierre Noizat.

The exchange is backed by Paymium , one of the oldest cryptocurrency exchanges known in this sector,that was never hack and its still up and running.

It has a simple outfit ready for the newcomers to crypto’s and also has advanced trading pairs, High performance matching orderbook and short and long margin trading for those that are already familiarized with the trading.

The exchange is backed by strategic partners as Kima ventures, Gattaca, Avolta partners, Dentsu or Newfund among many others.

The team behind the exchange is formed by more than 35 members that are experts in cryptocurrency and trading with many years of experience.

With all this said, you can take a look at the technology behind this exchange in they whitepaper , and research a bit more about them.

Till next time you could buy me a cofee or send me a meme.
ETH : 0xf6f0301c3ec0b89ef3b3d757e8b768ff1641bd4c

This isnt a investment advice