In the earlier days, have you imagined of a world where we just swipe for food, tap for transportation or click for clothing? Obviously we wouldn’t have thought about it. But the very fast moving techno world made all of it possible. Now, can you imagine a world without bank, coins and currency notes? Do you think it’s possible to make our leather wallet to digital wallet? My answer is yes! It is certainly possible with cryptocurrencies. “The future of money is digital currency” quoted by Bill Gates, founder of Microsoft Corporation. As he says, cryptocurrencies are actually ruling the world today.
Gradually, the fame for cryptocurrency scattered around the world and it is being accepted as a real-world currency payment at most of the countries. One of the most interesting fact about this cryptocurrency is that, in the year 2010 at the initial creation of bitcoin, an individual named Laszlo Hanyecz has bought just 2 pizzas for 10,000 Bitcoin (equals 11,33,99,000 USD today). With the surge in movement and transactions of Cryptocurrencies, the investors demand for Cryptocurrency Exchanges to buy, sell and trade digital currencies instantly in a secure way.
Cryptocurrency Exchange Platform
The value of cryptocurrency slowly elevated as the demand and supply for the digital currency increased. The circulation of cryptocurrency has immensely raised at a lot of developed and developing countries like US, UK, Japan, Singapore, Malaysia, etc. Generally, transactions will be made in a centralized platform where a trusted third party acts as a central authority between the transactions. Most of the investors believe that centralized cryptocurrency exchange platform is an important medium to buy, sell and transact cryptocurrency secure and seamless. Yet, some investors find centralized exchange platform to be insecure and misleading as the decision making power is from the central authority.
Here comes the decentralized exchange platform that overcomes the flaws of centralized exchange platform. This decentralized platform was accepted by most of the crypto investors for its amazing trading functionality. I am sure that still many are not sure about the difference between centralized and decentralized platform. Now let us understand what centralized and decentralized exchange platform is and how are they different from each other.
How is Centralized Exchange Different from Decentralized P2P Exchange
- There will be a central authority or owner or trusted third party,
- It is safe
- A set of rules and regulations will be framed.
This concept of centralization is an old concept which exists everywhere around us. A trusted third party will act as a middleman in the centralized exchange. In case of centralized cryptocurrency exchange platform, there will be a middleman to connect the crypto holders and investors for seamless trading. You have to give your information and data to the trusted third party to proceed with transaction.
- The centralized system can be easily hacked and funds could be lost in a matter of second.
- High possibility for the entire exchange to disappear.
- Transaction fees includes intermediary fees.
To overcome these hurdles of centralized exchange platform, decentralized exchange platform evolved as a fascinating strategy to secure crypto assets. Many investors are ready to trade on a decentralized exchange (P2P) platform, because it inherit the following
- Assured Privacy as it excludes registration requirements or KYC process.
- There is no need to deposit or withdraw digital asset as all the transactions between peer to peer is securely handled by smart contracts.
- There is no single point of failure, control or regulation.
To address the challenges associated with the centralized platform, peer to peer exchange came into existence. In this peer-to-peer decentralized exchange platform, a user can seamlessly trade with another user directly without involving third party. Also, the cryptocurrencies will be instantly transferred from each other wallets and all these are done with blockchain and smart contracts.
Additionally, to completely eliminate the involvement of fraudulent activities, decentralized asset exchange platform offer escrow services, where each user deposit their funds and both parties would get their funds.
Fascinating Facts of Decentralized Exchange Platform
Decentralized exchanges platforms are exclusively designed with significant advantages for users. The amazing features that engage more users to the platform is the absence of an middleman which reduces transaction fees. Yet another interesting fact of decentralized exchanges is it’s privacy because the centralized exchanges often require personal information and submit a proof of identity like passport, to trade on their platform. But in decentralized platform, the user will disclose their identity only with the user with whom they trade. Lastly, the most important factor, security is doubled under the decentralized exchange platform. They do not hold cryptocurrency for users instead users are connected directly with each other so that you need not worry about the security of your cryptocurrency to be exchanged.
Choosing between the best decentralized exchange platform and centralized exchange is completely based on the user’s desire. Centralization involved intermediary, rules and regulations whereas decentralization excludes middleman, rules and regulations while saving time and money. If you choose to engage with decentralized exchange, you have the responsibility to take care of your private key and a higher level of responsibility is always needed to safeguard your own assets.
Velareum is the best P2P decentralized exchange platform that could significantly offer better trading functionalities for the investors along with secure wallet to store your crypto assets. Are you an investor who want to buy, sell or trade your cryptocurrency in a secure platform, then Velareum would be the perfect choice to trade.
To engage with our P2P decentralized exchange platform, visit us at Velareum
Source: Crypto New Media