I’ve covered a few decentralized exchanges in the past, but with everything that’s been happening with regulations and the popular U.S. exchanges,
I think it’s important that everyone knows:
- Decentralized exchanges do exist
- The basic concepts of how to use them.
So today we’re going to explore how centralized exchanges are flawed, and how decentralized exchanges work.
So real quick, this is a little lesson for those of you who are new to crypto or who haven’t yet realized that there is indeed a need for decentralized exchanges.
All you hear in this land of cryptocurrency is the need for decentralization. This can be accomplished by the blockchains themselves if the team develops a distributed network of nodes and they work to eliminate bottlenecks within the network, in any form they may take.
One entity that in itself is a bottleneck, are centralized exchanges.
Although these are popular with the crypto crowd and they make it easy for newcomers to buy, trade and store their cryptocurrency investments, these centralized exchanges defeat the whole purpose of cryptocurrency in the first place. As time goes on, the need for decentralized exchanges will be made all the more evident by the regulations that centralized exchanges are forced to abide by.
Centralized exchanges use centralized servers to store coins for hundreds of thousands of individuals.
They also have a CEO which ultimately decides how your funds are handled within their exchange.
Doesn’t quite sound like these qualities match up well with the idea for decentralized, peer-2-peer networks that Satoshi had envisioned for us.
If you’re coming to this realization and you’re interested in learning how you can still participate in the trading of cryptocurrencies without having to place your trust in a third party, that’s great, because there are other people who care about this as well, and they’ve developed decentralized exchanges to be used by anyone.
The basic concept behind decentralized exchanges is that they do not store your cryptocurrencies for you.
Here is a basic rundown of how these decentralized exchanges work.
- There is no need to create any type of account, or provide any type of personal information or request any type of verification.
Instead, you will connect a wallet of which you have complete control. If it’s a decentralized exchange, or “dex” for the Ethereum blockchain, then you’ll be using MyEtherWallet, MyCrypto, MetaMask, or a Ledger hardware wallet.
- From there you will deposit whatever amount of coins you’d like to trade.
- Once your deposit has gone through and is now on the exchange, you’re ready to begin trading.
If this DEX is designed for the Ethereum blockchain, like EtherDelta, or IDEX, then you’ll need to keep an amount of Ethereum in your actual wallet to account for the gas fees that will occur for each transaction. Meaning your deposit, your trades and your eventual withdrawal back into your wallet.
This is where the Bitshares DEX comes in play!
If only it was usable.
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future will be decentralized :)
You can already trade on the decentralized exchange BarterDEX, developped by Komodo Platform https://komodoplatform.com/decentralized-exchange/
You can view statistics here : http://dexstats.info/
more than 79 000 Atomic-Swaps already done (with all ERC20 supported, called "ETOMIC" mechanism)
That's why I'm buying Bitshares because I think that will be the future top exchange :)
If Dan doesn't make DEX on EOS...
Of course, a decentralized exchanges are the way to go!
tried using cryptobridge which is decentralized exchange.too expensive and slow!!!
I look forward to the day when coinbase becomes history. It rips people off something terrible with its exorbitant fees and is slow. I look forward to the shows on decentralized exchanges. Keep up the good work!
First of all thanks not only for this but also for all your othr posts. Silent reader all along and I really like you.
Do you think decentralized exchanges are ready for all of us?Most of us fear scaling issues or unpredictable bugs. Iam not yet member of any decentralized exchange but I do agree with you! Centralized can be quite shady!
Stay Ahead Of The Game ~ Get There First ~ WIN >
Regulation is going to shut down US exchanges eventually. Where are the servers for the decentralized exchange? Is it spread across many computers like Torrents or blockchain? You could end up trouble if you run a node and exchanges are banned no?
Interesting idea that is going to become vital soon
This is why I am so enthusiastic about Guld.io. Decentralize all the things and build a whole new internet where we take back out privacy. Resteemed
nice post, very useful, thank you for sharing our knowledge to us
I have been dealing with way too much non-sense from some of these exchanges.. With SMT's hopefully coming soon I have given up on a lot of other projects besides STEEM.. So I'm excited to see what happens 😊
yes, I think that will be the future top exchange :)
If we hope to have our cake and eat it too, we must also decentralize power and water infrastructure, because the central banking elite will have no problem taking down power grids to keep their power.
I am proposing a blockchain app that allows neighborhoods to allocate municipal bonds in the form of crypto to each resident in the community, who then create and vote on proposals for neighborhood improvement projects (the winning proposal would then use the crypto to execute the project, sort of like GoFundMe).
Along with this D.App will be an educational initiative to guide each neighborhood in providing their own power, water, and locally interdependent economies (these parts will be hashed out in later proposal versions).
Feedback is much appreciated. The Steemit community has already helped in asking the right questions and directing me to the right orgs and individuals.
https://steemit.com/blockchain/@tidnull/ut-arlington-s-engineering-challenge-my-proposal-rough-draft
information is very useful
excellent
@heiditravels I love the idea of decentralized exchanges, but allow me to ask you this question, please. How to you get your coins in the first place, to trade on the decentralized exchange?
Tried to use DDEX a couple of days back with no success. They are much more difficult to use for the time being.
Of course!
@heiditravels
Don't forget Bisq, https://bisq.network/, the P2P exchange network.
Thanks for these posts on decentralised exchanges, I am fan and user of Bitshares, but I would like to explore supplementary options.
Very good post!!
What is your favorite exchange?
cool!
Sometimes it is better to listen THAN to read . . . I can dig :3