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Decentralised or Centralised Exchanges: Which Should You Be Using?

Geplaatst op juni 1, 2018 door Blockchain News

Decentralised or Centralised Exchanges Which Should You be Using

Decentralised or Centralised Exchanges Which Should You be Using

There’s actually a good chance these days that even your grandma has heard of bitcoin. Your parents may even own some, and you may have overheard someone at work talking about how they bought $50 worth of Litecoin and it’s going to the moon. With so many people coming into the crypto space, it’s time we looked at how secure our holdings are – particularly, the types of exchanges we are using.

It seems not a month goes by without the news of some kind of exchange hack coming out. Mt Gox and Bitfinex have become bywords for these crypto bank runs where flaws in exchanges are found and exploited by hackers, causing people to lose vast amounts of crypto in a matter of seconds. It is estimated that nearly one million bitcoins – valued at around $15 billion – have been stolen since 2013.

As 99% of crypto trades take place on centralised exchanges, they are clearly the most popular choice – but may not be the safest. Let’s take a closer look at the pros and cons of both:

Centralised exchanges

  • + Ease of use

This is the main reason centralised exchanges are so dominant. Platforms like Coinbase offer a user-friendly interface with Facebook colours to make you feel like you’re somewhere safe and familiar. Their slick and professional presentation as well as customer service infrastructure make them appealing to those who aren’t crypto experts.

  • + Choice

There are many centralised exchanges to choose from, so there is a lot of wriggle-room depending on which currencies you want to trade in.

  • – High Fees

Some of the most well-known exchanges charge fees of between 0.25% and 3% for transactions, much higher than decentralised exchanges.

  • – Server failure and hacks

During periods of increased activity – which are inevitably times of large price fluctuations – centralized exchanges all too often crash out. Instead of capitalizing on price surges, customers are left screaming at a ‘we’re working on it’ screen. Hacks as well, are an ever-present demon which haunts exchanges and even some of the biggest can be taken down.

Decentralised Exchanges

  • – Low availability

There just aren’t that many decentralised exchanges out there. As they are comparatively harder to build, many projects, whilst still in the pipeline have not come to fruition yet. However, that does not mean there aren’t any: idex and wavesdex are two decentralised exchanges which are already up and running.

  • – Lower speed and volume

Decentralised exchanges can run slower than centralised ones, although many claim to have resolved this issue. Wavesdex for example, whilst being a decentralised exchange, boasts a centralised matching system to speed up transactions. The volume on decentralised exchanges is also much lower than centralised ones making their ecosystem comparatively smaller.

  • + High security

Decentralised exchanges are based everywhere and nowhere: so it is extremely hard to rob them. Traders on decentralised exchanges handle their own security by keeping hold of their own keys and funds.

  • + Anonymous

Decentralised exchanges allow users to keep their personal information private; there is no need to upload copies of ID documents and the system operates anonymously.

  • + Transparent

Transactions which take place on decentralized exchanges can be viewed by anyone owing to the fact that they are open source.

 

It seems the biggest obstacle to decentralized exchanges gaining a significant market share is their low availability. The ones which exist now have a reputation for being complex and not for the uninitiated; however, with the growth of exchanges like LQDEX which aims to address this issue, decentralized exchanges may have their day yet.

Image Source: “Flickr”

The post Decentralised or Centralised Exchanges: Which Should You Be Using? appeared first on Toshi Times.


Source: Toshi Times
Original Post: Decentralised or Centralised Exchanges: Which Should You Be Using?

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