Decentralization

Governments fear it. Banks tried to ignore it. Teenage developers are building it in their basements and bedrooms.

The cryptocurrency industry has given us the tools to decentralize all manner of services; from cargo logistics to financial accounting.

But there’s a very significant hurdle to overcome before the largest economic boom in human history can take place.

Exchanges

To buy or sell crypto, you either deal with an OTC trading desk at a big firm (if you have that kind of moola), or you open an account on an exchange and trade with your fellow man. Places like Binance, Bitfinex, Kraken, Bitstamp, and so on.

Those exchanges are centralized.

Meaning, all transactions take place inside of their privately controlled platform: kind of like a bank!

Centralized Exchanges (CEX’s) act as custodians of your cryptocurrency. Allowing you to deposit your coins into an account — which gives them full control of your coins.

This creates a single point of failure, a target for hackers, excessive trading fees, and a barrier to greater market adoption.

In 2018 an estimated $1 billion dollars was lost due to hacks on CEX’s, reports CoinTelegraph (article).

The solution?

Decentralized Exchanges (DEX’s) operate differently. They work via distributed trustless relay networks, peer-to-peer.

That is: the DEX takes a basic finders fee for connecting two parties, but doesn’t actually get involved in handling the finances per se.

Rather than depositing crypto into the exchange account, any transaction made via a DEX happens directly between the two parties.

It’s not just a subtle difference. It’s vital for retained ownership, maximum security, and reliable privacy — unlike the ongoing problems at Facebook!

Co-founder of Ethereum Vitalik Buterin recently said he:

“definitely hopes centralized exchanges (CEX’s) go burn in hell as much as possible.”

And famous security entrepreneur John McAfee says:

“Decentralized exchanges (DEX’s), when fully functional, will mark the end of any potential control by governments and will be the beginning of the largest economic boom in human history.” “Because I do not care how much power you have as a government, how many police, how many soldiers, whatever. If the exchange is distributed across 20 million wallets on smartphones and laptops and pads, then what do you do? It is impossible. You would have to shut down all twenty million of them scattered around the world.” — John McAfee

But we’re not there yet…

To date, DEX’s have a host of challenges to overcome:

• Not as user-friendly as CEX’s

• Have limited trading tools compared to CEX’s

• Have low liquidity (trading volume) compared to CEX’s

Solving these problems is just a matter of time and many DEX projects are fast afoot, including LuxCore, IDEX and my current personal favorite; Metamorph.Pro.

In the next bull run of cryptocurrency investing, speculating and trading, decentralized exchanges will become ever-more popular.

The fees they earn for trading will go back into R&D...

…New features will make the services more user-friendly, cheaper, faster, more connected between different blockchains — opening up more opportunity for financial inclusion, economic freedom, and value exchange from person-to-person.

As cryptocurrency’s become fully decentralized, old currencies created by ‘central banks’ (like the Euro, Pound and Dollar) will lose relevance.

Buckle your seatbelts

The transition from centralised financial services to fully disintermediated decentralization will happen fast — and possibly feel tumultuous for some… especially for politicians.

“Our income taxes are the greatest source of revenue, but if everybody’s using Bitcoin, the government doesn’t know what your income is. They can’t tax it, and if you choose to say I didn’t have anything, they cannot prove otherwise,” McAfee told CalvinAyre.com. “It will eventually frighten every nation state, but it doesn’t matter what they do, there’s no way you can create a law or to legislate something that will stop Bitcoin or any cryptocurrency because technically, you cannot.” … “They [Governments and Central Banks] have taken control and power away from their citizens for hundreds of years. It’s time that we, as citizens, took that power back.” — John McAfee

…and it will all be over before you know.

So get set: Learn how decentralized cryptocurrency exchange works today.

It just might be really — really — good for your future.