How Decentralized Exchanges Benefit Traders?

Decentralization is a type of network that isn’t operated by a central party. In other words, unlike their counterparts, their platform doesn’t need all the information to go through a single point. Instead, it’s more like a peer-to-peer network where many points connect.

This means, instead of one party being responsible for all the data and information, decentralized platforms operate on a peer-to-peer basis. By operating this way, consumers personal information are not shared as a third party has no access to the information.

These exchanges offer privacy and control over the assets by taking power away from market makers and leaders like banks, lawyers, and brokers. They also operate with the help of smart contracts. Though there are plenty of decentralized exchanges out there, they have always struggled to rival the centralized exchanges. This is due to the technical difficulties making decentralization more accessible.

When a transaction initiates on DEX (decentralized exchange), the transaction data processed on different hard drives must get verified to achieve a secure result. This multiplies the difficulty required to complete a transaction on DEX.

The shared blockchain network remains to be the core issue in improving decentralization. We should also notice that it has been the biggest technical difficulty since the introduction of cryptocurrencies. But, the introduction of smart contracts and distributed apps can make the difference for decentralized exchanges as it offers more functionality.

Benefits Of Using Decentralized Exchanges

Privacy

Transactions made on DEX shares no data with the third party. Hence, it allows maintaining consumers information and privacy. Also, centralized exchanges ask for personal information such as email, identity proof, and phone number while signing up. DEX doesn’t need any of that.

Security

The biggest advantage of decentralization is the enhanced security it offers. The cryptocurrency got introduced for this purpose, it gives the consumer complete control over their assets.

Decentralized servers

Most DEXs do not have a centralized server, they store data across various servers around the world. Hence, the data remains safe and is almost impossible to get hacked.

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Blockchain Companies Using Decentralized Exchange Models

Decentralization is promising a system liberated from banks, laws, and third parties. Thus, the system has the potential to bolster its growth in the next few years. Here’s a list of companies trying to solve their inefficiencies by making use of the blockchain technology. Particularly the future is promising for decentralized exchanges because they are destined to improve and innovate if they want to save the cryosphere.

Waves Dex, CryptoBridge Dex, OasisDex, Bisq (aka BitSquare), Stellar Dex are one of them but there are much more decentralized exchanges out of which few are still being built and few are facing security difficulties or still have very low liquidity.

Companies spend millions on improving decentralized apps. Yet, they are still slow, hard to use, and sometimes very expensive for consumers. Menlo One has found a solution to solve these concerns for users. They provide a reliable framework for making decentralized apps by using a reputed algorithm for enhanced performance. They are as fast as traditional web apps and offer the security of blockchain technology.

Implementing and applying the decentralized technology of the Blockchain cryptocurrency network in the alternative assets as wine industry, invests in it its future and ensures its longevity. Modern trading platforms make fine wine trading easier and more reliable than ever before. Backed up by its partner, DotChain GmbH based in Switzerland, one of such platforms, CWEX, guarantees anonymity and security of investment by providing blockchain based ownership certification to each bottle of wine traded on the trading platform. Fine wine vendors that passed a strict auditing process can list their products for trading in CWEX/EOS/BTC/ETH/NEO/USD.

Founded by Zhang Jian, FCoin is also a fully decentralized exchange with a massive volume of trades happening each day. Centralized exchanges have been ruling the crypto markets since the very beginning. However, a start-up based in China has made the headlines with its fully transparent crypto exchange.

Conclusion

To sum it up, decentralization is the core reason behind the creation of cryptocurrency. Though the centralized exchanges are benefiting the investors and the system, the true purpose of cryptocurrency will only come true with a decentralized cryptocurrency exchange.

It’s up to the individual to choose the right exchange for themselves. Centralized exchange provides the ease of access and reliability while decentralized exchange contributes to the enhanced privacy. Both has its own benefits and concerns, for now, they serve to bring crypto markets into the broad frame.