In 2016, almost $60 million worth of Bitcoins were stolen from Bitfinex, which was the leading and largest cryptocurrency exchange during that period. You might be wondering how someone is able to hack and stole coins from such a big exchange. Even though many of these exchanges take better security measures, you cannot rule out the possibility of hacks or attacks as they are not uncommon. Because of their centralized architecture, if some hacker can get hold of the exchange’s main server, then it will affect all the customers as their funds are stored in the wallet of the exchange. Even though centralized exchanges are user-friendly and offer advanced trading options like stop limits, margin trading, etc, there are some drawbacks which are given below:
In centralized exchanges, the users don’t have any control over their funds as they are stored in either the exchange’s or some third party provider’s wallets. So, if a user needs to withdraw funds, it will take more time as the withdrawal process is not straightforward like taking money from an ATM.
You may face issues like “slow speed”, “server down” etc as it is a centralized system.
Users will be required to provide their personal information for opening account and to deposit/withdraw funds from the account.
How to overcome the above limitations of a centralized exchange? Decentralized exchange? Yes. The crypto world is slowly moving towards the concept of Decentralized exchanges. What is a Decentralized exchange? It is an exchange market where the transactions occur directly between users through P2P (Peer-to-Peer) without relying on a third-party service provider. Instead of a centralized server, the exchange will use a network of nodes. Decentralized exchanges will provide a solution for all the three limitations of centralized exchanges as given below.
Users will get full control over their funds as they are trading directly with other users using P2P. Also, they can access their wallets to withdraw funds at any point in time as it is not controlled by a third party.
There will not be any risk of server downtime as the exchange is operated by a distributed network of nodes.
Decentralized exchanges provide more privacy as there is no need to disclose your personal information to the exchange. If needed, you can provide your personal details only to the buyer/seller with whom you are making the transaction.
Sounds Interesting? DEEX is one such decentralized exchange that is under development. The main objective of DEEX to provider the users a friendly and flexible platform to buy, sell/trade any type of cryptocurrency. Initially, the exchange will provide support trading/exchange for the Top 10 cryptocurrencies like Bitcoin, Ether, Litecoin, etc. Please visit their official whitepaper https://deex.exchange/docs/DEEX_wp-2.0_eng.pdf to learn more information about DEEX.
Besides a user-friendly platform, DEEX also provides the following features.
- DEX Messenger
- All-in-one debit card
- Crypto ATMs
- Decentralized Blockchain Fund
The company is also planning to release the mobile application of the DEEX platform soon. It will be releasing its utility tokens named DEEX.CORE which can be used to access the platform.
Kindly visit https://deex.exchange/ to know the latest information about the token sale event.