** Para ler esse artigo em Português, entre no link abaixo https://medium.com/@bizanc/exchange-descentralizada-vs-exchange-centralizada-846779678d20 **
The first blockchain-based history is bitcoin, in 2009 was created the peer-2-peers payment network that allows users to transfer values between then, without central authority or third party. Once the network is distributed and decentralized, most of those users are anonymous included miners. Miners are all in charge to process transactions trades, this process ensured security and reliability and avoid problems like frauds, censorship, double spending and others.
The decentralized architecture provides automated issuance system of cryptocurrencies (Bitcoin, Biz, Ethereum…) through mining and also the control of money issuance without central and privately banks. The privately banks lend money to governments at interest, creating huge economy debts, impacting directly in population. The financial crash in 2008 is the perfect example.
Bitcoin, Biz and Ethereum, empower people with full control of their money, but we still entrust our funds as such Ethereum to third-party services. One of the most common are Centralized Exchange services.
Centralized Exchanges in general are more popular, and people are used to it because of traditional financial market.
However, it represent a huge security risk for your funds. Hacks in centralized exchange are quite normal in the cryptocurrency industry, in 2018 the equivalent 1.5 billions USD has been stolen! One of most famous is Bitfinex affecting thousands of users.
The low transparency in the process, allow some exchanges be malicious and incompetent, applying fractional reserve system leading voluntary elimination of the excess instruments, causing bankruptcy around people involved. Mt Gox in 2011 is good example for that.
Even so, there are few items or services that cannot be payed with crypto assets yet also to acquire bitcoin and crytocurrencies as such Bitcoin, Monero and ETH, most people needs exchange it for fiat currency. How can we solve all those problems mention above and exchange without third party service ?
The answer is DECENTRALIZED EXCHANGES (DEX).
What is a Decentralized Exchange?
A decentralized exchange is an exchange that runs under blockchain infrastructure and the market does not need third-party service to hold the users funds. Instead, trades occur directly between users (peer-to-peer) through blockchain mecanism. Ecosystem can be established and managed by creating tokens, cryptoassets that represent a certain fiat or any kind of assets. It can represent shares in a company, commodities, bonds, contracts, futures, through a decentralized multi-signature escrow system, Over the counting (OTC) or even payments.
In Decentralized Exchanges the deposits, withdrawal, funds, trade, OTC and payment are fully controlled by users. Those transactions will be process by miners as mention before.
Benefits:
The benefits to using a decentralized exchange over a centralized one is the trustless provided. You don`t need to trust the exchange, once the the funds are held by you.
Another awesome advantage to the decentralized model is the privacy it provides. The pair keys are generate independently no one are not required to disclose their personal details, only if the exchange involves bank transfers, otherwise your identity will not be revealed to any person that is selling or buying from you.
The system is absolutely resilient, hosting decentralized meaning that there is no risk of server downtime, so it can be trade 24/07.
Downsides:
The adoption for decentralized today is not that easy, most people are interest but the barriers still high.
The main features like margin, lending and stop loss in many DEX is not available and people usually are not used to take of their own funds.
Bizanc aims to provide a fully Decentralized Exchange and easy adoption.
Using metamask or electrum wallet, you are able to deposit, withdrawal and trade any of assets as such Biz, Bitcoin, Ethereum and any ERC20 tokens listed.
For further information, please get in bizanc.io
whitepaper: https://bizanc.io/documentos/Bizanc-whitepaper-draft.pdf userguide: https://bizanc.io/documentos/EN-TutorialTestnet.pdf
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Thanks for reading!
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