If you are a cryptocurrency investor, you are probably familiar with one or several cryptocurrency exchanges. Cryptocurrency exchanges are online platforms where you can exchange between cryptocurrencies or in some cases between cryptocurrency and fiat currency.
These exchanges link buyers and sellers with the exchange acting as a middleman. There are many popular exchange platforms, but not all exchanges are created equal.
Centralized Exchange
Mt. Gox was the worlds largest volume centralized exchange before it collapsed
Most exchanges are centralized online exchanges. This means that the company has control over your private keys. In the world of cryptocurrency, private keys are literally the keys to the kingdom.
Whoever controls the private keys controls the funds. Using a centralized exchange, you have to rely on a third-party to secure your funds. This can be very problematic for a number of reasons. Many investors have had their funds lost or stolen by centralized exchanges.
The most infamous investor loss was the Mt Gox Bitcoin exchange. In February of 2014, Mt Gox, the largest Bitcoin exchange at the time, abruptly suspended trading, filed for bankruptcy and announced 850,000 bitcoins, belonging to its customers, were missing. This crushed investors and devastated the bitcoin market. Those Bitcoin would be valued at $3.5 billion today!
Mt. Gox users lost the equivalent in Billions of dollars at today’s Bitcoin Prices
Unfortunately, while cryptocurrency has come a long way since 2014, most exchanges are still operating on a centralized framework. Year after year there continue to be stories of fraud, mishandling and blatant theft of customer funds from popular exchanges.
Even “respectable” exchanges frequently experience outages, trading/withdrawal suspensions and flash price crashes and spikes. Luckily for investors, they now have a choice to control their own security on a decentralized exchange.
Decentralized CryptoCurrency Exchange
Decentralization of the exchange gives it robustness against failure because any attack or failure impacts only a single user and their funds. Users are in control of their own security, which can be much better than any centralized entity.
The most advanced decentralized exchange is the BitShares Decentralized Exchange (DEX). The DEX offers a high-performance exchange capable of handling the trade volume of the NASDAQ while offering the benefits of a decentralized system. There is no need to sacrifice functionality for security. The DEX even offers many features centralized exchanges do not.
The DEX allows for the creation and trading of BitAssets. These are market pegged assets that have their value tied to that of real assets such as the U.S. dollar or gold. This allows investors to have the benefits of price stable currencies while also having the features of cryptocurrency. The BitShares platform provides a feature known as "user-issued assets". These are custom tokens, designed to suit an individual or company’s needs, that can be traded on the DEX.
The BitShares DEX even offers its own native currency, BitShares (BTS). BTS derives its value from the demand for BitShares services. BTS is a tradable token that also plays an important function in the BitShares ecosystem, acting as a form of collateral and helping to ensure liquidity of Market Pegged Assets (MPA) and BitAssets. By purchasing and holding BTS, you can invest in the future of the platform.
Aside from the security and features the DEX offers, it also helps protect you from the instability and politics of the crypto industry. Earlier this year, crypto exchange BTC-E had their domain seized and services halted due to a federal investigation regarding one of the administrators of the site, Alexander Vinnik. BTC-E customers were left confused, worried and without access to their funds.
BTC-e Centralized Exchange was seized by US Regulators and consumer wallets frozen
One of the worst feelings in cryptocurrency investing is realizing you are not in control of your funds and you might lose everything, don’t let that be you.
Are you going to be one of the victims of the next exchange hack, theft or shutdowns, or are you going make the switch to a DEX, and be the master of your own cryptocurrency?
Decentralized exchanges are the future. The world is experiencing a wave of innovation based on blockchain technology. Blockchain and the decentralization it provides will challenge nearly every industry and institution in the future. Just as the internet decentralized information, blockchain will decentralize economics. It is only natural that the industry will gravitate toward decentralized exchanges.
Be safe, be in control and be part of the future by using the BitShares DEX!
“Throughout history, centralized exchanges have repeatedly proven unreliable and untrustworthy. Whether it is MF Global, Mt. Gox, or BitStamp, many people have been cheated because they allowed a third party to hold their funds. It doesn’t matter how big they are, or how many auditors, regulators or insurers are involved, every kind of fraud, abuse, and theft can occur. In the modern financial system, these transgressions happen all too frequently within centralized banks and exchanges operating across the world. It is time for a change.” bitshares.org
If you want to learn more about the BitShares platform and the powerful services it offers visit bitshares.org.
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