“I hope personally central exchanges burn in hell as much as possible”, says Vitalik Buterin, the founder of Ethereum.
Decentralized exchanges are the next logical step.
China, South Korea, and the USA, Germany, France and other European countries are starting to regulate the cryptocurrency market. First attempts in this direction emanate from the G20 summit, which set the course in March 2018.
How can regulations take effect?
The central crypto exchange will be the first approach to government regulations. However, apart from the regulations, centralized crypto exchanges have far more disadvantages.
They are one of the most popular targets for hackers.
Billions have been stolen by hackers in the past from central exchanges. Mostly to the detriment of the user. In addition, rates of coins were manipulated by central exchanges. Also, scams by the central exchanges were revealed as studies of US universities prove. Central exchanges asking for listing fees of $ 10 million to $ 15 million for new coins. They hinder the development of new blockchain projects designed to shape our future.
The solution is decentralized marketplaces
Only the use of decentralized marketplaces will guarantee freedom and independence of the cryptocurrency. The advantages of decentralized exchanges are obvious. The user has full control over his coins and tokens. This provides a high level of security — both in terms of hackers and government regulation. In addition, there is no need to register or verify for trading. The user thus remains anonymous and can theoretically use a decentralized marketplace even if the state in which he lives completely prohibits the trading of cryptocurrencies. In addition, the likelihood of the crypto market being offline is far less than that of centralized counterparts because the marketplace is decentralized and thus distributed.
What are the disadvantages of decentralized exchanges?
Currently, the biggest disadvantage of decentralized marketplaces is that most such exchanges are far less liquid than the centralized counterparts. The trading volume in the various exchanges is still quite low. What is the value of a beautiful decentralized exchange, if you cannot find buyer or sellers for your orders? In addition, the decentralized exchanges have not yet solved all the problems that are of great importance to decentralized trading. A major problem is the trading speed. In addition, usually only very specific coins can be traded or replacement tokens are used which represent the actual asset. Decentralized solutions are often hybrid solutions that are not completely decentralized and again require trusted third parties.
Binance is particularly dangerous
Particularly dangerous is the decentralized exchange project, which is currently being developed by Binance. It is not a true decentralized solution, but a hybrid model that gives the operator Binance full power to influence the crypto community over fees and manipulation. Solutions that hide under the cloak of piety but are made by the devil should burn in hell.
But for all these problems there is an interesting solution.
Tokrex.org is a nonprofit foundation that has recognized and solved the issues of decentralized exchange that previous decentralized exchange projects cannot yet fully address.
Cross-Chain Trading speed has been reduced to milliseconds.
They achieve this because the coins are no longer transmitted on-chain. The coins are stored in distributed private keys and can be exchanged directly with almost no latency. They call their cryptography “Cryptographic Deposit Guarantees”. Their protocol allows truly decentralized wallets that extending the capabilities of today’s smart contracts by adding homomorphic encryption and enable crypto asset swapping in a high-frequency setting.
They have solved cross-chain trading brilliantly.
The user can trade any coin in the millisecond range. A listing of the coins can be done by every user and does not cost a thing. Trading fees do not exist by definition. But users can, if they wish, set their own trading fees per trade. This makes it an ecosystem designed by its users. Order matching is replaced by Tokrex FloorNet. A decentralized order matching that works in real time in both online and offline modes. In addition, any order type such as limit orders, market orders, partial executions and special order types such as fill-or-kill can be used.
A particularly interesting approach was found by Tokrex to solve the problem of low trading volumes, which, of course, also applies to this project. Before starting with their ICO, they will build a large crypto community. The goal is one million members. Members can actively shape the project via voting rights and defend cryptocurrencies against the supervision, manipulation, and control of central exchanges, government interference, and banks.
