Prospects and potential of ATUMchain technology applying
The development of ATUMchain technology is a step towards the formation of a new level of decentralized platforms that allow to fully implement the concept of decentralization.
Due to its own blockchain based on the best sides of the algorithm Tendermint, tested on the technology of NEM, allows the project to take all the most effective in the future of decentralized platforms.
The ATUMbridge platform as a crosschain platform for fast and extremely profitable exchange or trade in cryptocurrency assets has every right to claim an advanced position among decentralized cryptocurrency exchanges.
Over the past three years, centralized cryptocurrency exchanges have experienced a real flowering, with most of these structures being developed and deployed in a relatively short period of time. Given the high complexity of the assets they have to deal with (cryptographic tokens compared to securities), as well as short testing periods and the lack of history, it is not surprising that most of such exchanges are vulnerable to attacks. In fact, most leading cryptocurrency exchanges for the same three years have been the victims of such attacks, which almost always led to huge losses: Bithumb, MtGox, ShapeShift, Bitfinex, Yapizon, Cryptsy — the list can be continued if desired.
In addition to its vulnerability, the principle of centralization, which is the basis for such exchanges, runs counter to the very spirit of decentralized blockchain. These reasons led to the attention of investors and developers turned to decentralized exchanges or DEX (DEcentralized eXchange). The three-year period brought many such projects — most of them have not yet left the development stage, but several operating platforms have already gained a reputation.
However, today’s cryptocurrency exchanges are centralized: they are vulnerable to hacking, they do not react well to the processes associated with blockchain and are often associated with the risk of regulation by governments. The systems of centralized exchanges are outside the blockchain, and this means that exchanges work as organizations that carry out the escrow of their clients’ money; while transactions are not recorded in the blockchain. This, in fact, a massive security breach: unsafe storage of information, money and private keys.
Decentralized exchanges (DEX) are aimed at solving problems that are inherent in centralized structures. They create p2p-markets directly on the blockchain, usually on the ethereum, which allows traders to independently store funds and operate on them. However, the creation of fully decentralized and efficient exchanges remains a kind of utopia. The exchanges are centralized, because this is the easiest way out. The construction of fully decentralized exchanges remains expensive and technically difficult.
In 2017, the market capitalization of the cryptocurrency increased by more than 3400% (exponentially): from less than $ 18 billion to more than $ 600 billion.
From January 1, 2017 to January 1, 2018, the number of transactions per day in the cryptocurrency market increased 240 times: the average cost of transactions per day ranged from $ 130 million to more than $ 30 billion.
More than 170 cryptocurrency exchanges in 2017 functioned in real time, while their number also grew exponentially. Also there are countless projects of new sites.
More than 99% of cryptocurrency transactions pass through centralized exchanges.
The lack of security, transparency and efficiency in centralized services dictates strong demand for decentralized exchanges. New market participants solve these problems and try to meet the obvious needs of the community. The emergence of such (not decentralized) projects like 0x, Ethfinex, ShapeShift and EtherDelta, which do not store users’ funds, aroused great interest.
Experts agree that decentralized exchanges promise two main advantages: security and the global market.
One of the oldest and most recognized projects in this field is EtherDelta, a platform with a simple user interface and basic options for trading (no margin), through which up to $ 25 million daily passes in crypto-currencies.
The main advantages of DEX:
- there is no need to trust users’ funds to third parties: this means that the funds are safe;
- confidential data is stored in a safe environment.
The main limitations of DEX:
- the problems of scalability of the blockchain system, which is based on them;
- while most of them are not adapted for convenient use, they experience difficulties with liquidity, do not provide for finish payments, etc.
In the context of the foregoing, let us consider what decisions on this issue allow the project to fully declare itself and what issues it solves.
In simple terms, the ATUMchain plans to provide all the advantages of decentralized exchanges and peddle real and practical solutions to the market. The application of lightning network technology and the ability to send data to different user registries — interledger decision, a direct crosschain technology based on the product ATUMbridge.
– direct client-client trades which eliminates the risk of keeping your own funds on the exchange;
– no volume restrictions of transactions and no KYC forms (except for option trades);
– no possibility for platform quotes manipulation and trading “against” the client;
– Optimal pricing and competitive commission. ATUM will give quotes and transactions from other trading platforms, so possessing full information, ATUM customers will be able to place the best market orders. Actually, ATUM is pushing the trade to a new quality level.
In this case clients can:
– place and cancel orders (it is only possible before bridge –momentum);
– place limit orders (stop-loss and take profit);
– place hiding order (orders hiding the actual order quantity).
In case of option sales a client should have KYC form. KYC presupposes “smart contract”, where tokens will be partly frozen. To reduce the delivery risk, option sellers will be assigned reliability rating and their main wallet will be given.
Trustless transactions are a big deal in the cryptoverse, and they will be even bigger deals in the future. These DEXs are what the future of human commerce looks like, and the neatest part of all is that we have the opportunity to “get in at the ground floor” and try them out before cryptocurrencies really go mainstream.
Prospects for the development and dissemination of decentralized platforms is an obvious reality, not long ago such giants of cryptotrading as Binance and Bitfinex decided to actively develop decentralized solutions. To this they were forced by hacker attacks carried out on the resources of exchanges.
Bitfinex was informed that soon the decentralized trading exchange EOSFinex, based on the EOS.IO blockchain protocol, will be launched. According to the representatives of the exchange, EOSFinex will be high-performance due to high speed of data processing, as well as horizontal scaling. Therefore, a decentralized project will have to cope with the influx of new customers and the increase in the number of transactions. Of course, and security will be at the appropriate level — decentralization will not allow storing data in one place, which in theory should protect the accounts of Binance decided to go on an even simpler route and announced a tender for the development of a decentralized platform (that is, a blockchain) with a prize fund of 1 million dollars.
The new Binance blockchain will have to be a hybrid of decentralized and centralized technologies that complement each other. According to Binance, this approach will facilitate the transition from the form of the company to the form of the community. Binance Chain (and this is what the new project will be called) will provide decent performance, ease of use and liquidity.
By the way, Binance Coin (BNB), which now operates on the basis of the Ethereum platform, will be transferred to the developed blockchain. BNB-tokens will form the basis of the blockchain-system-asset exchange system. Users who will themselves be responsible for their own cryptocurrency.
Do not forget that decentralization will allow large exchanges in the long term to evade dependence on financial regulators. Now they are pushing projects from all sides, overlapping them with checks and lawsuits. If decentralization is introduced, there will be nothing to check: all funds will be distributed among tens of millions of independent devices connected to the network.
Of course, the creation of a fully decentralized exchange is a technically difficult task, connected with a lot of problems. Therefore, do not wait for the instant and complete decentralization of Bitfinex, Binance or any other large exchange. Most likely, both directions — decentralized and centralized — will develop in parallel or, more likely, in the form of a kind of “hybrid” combining the advantages of the two technologies.
According to statistics, at the moment about 99% of transactions are still going through centralized exchanges. However, all of the above reasons, as well as others (high risks associated with possible malfunctions, delayed payments, lack of transparency in trading processes and management of users’ funds, overcrowding by stock exchanges that are not aware of basic security measures) will prompt owners of centralized projects to make a decision in the benefit of development. Therefore, it can be predicted that the current year may become a year of decentralization and ATUMchain has every opportunity to take its rightful place in this series.