The demand for decentralized exchanges (DEX), such as Coinone, is skyrocketing. In the future years, I expect this need to persist, and the use of decentralized exchanges to increase.
Decentralized bitcoin exchanges pose a danger to centralized cryptocurrency exchanges. BitMEX, the world’s largest Bitcoin (BTC) futures exchange by volume, had its senior management team indicted recently. This caused shockwaves through the market, resulting in a large withdrawal of funds from centralized exchange wallets. In the event of further trading, the amount of Bitcoin wallets in exchange has fallen since November 2018 to its lowest level.
Given the uncertainty surrounding centralized exchanges and the growing desire for decentralized exchanges, the question becomes: What are the benefits of using decentralized exchanges?
Lower transaction Fees
When compared to centralized exchanges, trading on DEXs usually offers lower fees. Because crypto traders are continuously looking for the best rates to trade their assets, this poses a significant risk to decentralized exchanges. Centralized exchanges can be forced to reduce their costs in order to compete with DEX.
Reduce the risk of dealing with a third party
In our field, there’s a proverb that goes, “Not your keys; not your coins.” This means that you have no guarantee of ownership when you keep your crypto assets on centralized exchanges or with any third party.
In the past, there have been numerous centralized exchanges that are causing consumers to lose their money. No problem with decentralized exchanges, as bitcoin transactions are carried out via an automatic mechanism to eliminate broker requirements.
Many centralized exchanges do not allow residents of particular countries to use their services. DEXs do not have this problem because they may be used by anyone from anywhere in the world. As a result, the ecosystem becomes significantly more inclusive and equal.
Given the amount of data collected on each of us, privacy has become a highly important concern for many people nowadays.DEX users are not obliged and are rarely asked to record, to share personal information with third parties.
Despite these benefits, decentralized exchanges are still in their infancy, with a lot of work ahead of them. Poor user experience, little or no customer service, only crypto-to-crypto trading, and scalability concerns are just a few of their drawbacks. These conditions will increase over time, and decentralized exchanges will become a big challenge to centralized exchanges. DEXs, I believe, will eat into the trading volume of centralized exchanges in the coming years.