Centralized Exchanges and the High Cost of Business
By Liam Bussell
The discussion around the issues in the centralized exchange market has run ad infinitum this week. The Shapeshift guys have acknowledged it with their further expansion of Shapeshift into Prism. They have moved to advance the decentralized market and should be applauded for that. Erik Voorhees believes that mass adoption will only become reality when we collectively lower the entry cost for new users. At openANX we agree, but we believe that there is another factor to be considered. Trust.
The ability of new users to trust the system, to understand clearly the risks of parties they are working with and how they can pursue dispute resolution they may have in case of an issue. That’s one of the key drivers behind our platform. Collaterized gateways, a predetermined resolution pathway and smart contracts governing the collateral of these gateways, all open and transparent and accessible to the user.
The reduction on the barriers to entry is important, but trust in the system that they utilize is a key obstacle to mass adoption.