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Analysis: Centralized Exchanges vs Decentralized Exchanges



Unlike centralized exchanges, DEXs allow direct, peer - to - peer trading ( P2P ) in cryptocurrency, where users control their funds.

Unlike centralized exchanges, DEXs do not function as a bank or traditional fiat currency exchange, but instead they allow direct, peer – to – peer trading ( P2P ) in cryptocurrency, where users control their funds.


Centralized vs Decentralized Exchanges

Centralized markets dominate the global volume of cryptocurrency trade with an overwhelming margin, and the trading volume is much more constant ( although it is still incredibly volatile compared to traditional stock systems ). Centralized exchanges can do so without any problems because trading on centralized markets does not involve any cryptocurrency movement. Digital assets in centralized markets are only transferred when they WITHDRAW from the stock market, not in all transactions. In general, cryptocurrency regulation is still a bit of a legal grey area – especially when it comes to decentralized exchanges. The massive armies of automated price robots for a given market bring rapid changes, so playing multiple markets at the same time offers some additional benefits for experienced algorithmic traders.

Centralized exchanges are fast because they are centralized and do not exchange assets in the chain. The advantages of legitimate central markets include offering substantial liquidity ( approximately 99 percent of cryptocurrency is done on central markets ), offering fiat on-ramp, offering greater trade functionality and the ability to use sophisticated trading strategies, institutional support, and compliance with the laws of the jurisdictions in which they reside. The decentralized exchanges ( DEXs ) are applications built on the dapp platforms ( such as Ethereum ) that use smart contracts to facilitate trade.

To make things more complicated, there are actually several models that are currently used by decentralized exchanges. Centralized exchanges continue to dominate the daily trading volume, primarily due to significant technological and user experience barriers that continue to separate centralized and decentralized markets.

The central exchange can be used as fiat on ramps, allowing customers to deposit money directly from their bank account to purchase cryptocurrency in a trustworthy and compliant manner. Also, the central cryptocurrency markets are capable of offering high – performance trading opportunities and other advanced tools that can attract institutional investors. Today, relays offer highly sophisticated web applications that can compete with the centralized exchange rate of cryptocurrency in terms of user-friendliness.

In general, centralized exchanges are a more straightforward point of entry for new people who are new to digital currencies. Centralized exchanges can also provide additional services for their customers, which are not yet available on decentralized markets such as margin trading, loss prevention, and lending. One of the criticisms of the centralized exchanges is that they oppose the decentralized world of the blockchain, which essentially gives up power to a third party.

More specifically, decentralization causes censors, which in the case of a decentralized exchange, means that no central authority could impose regulations, or even ban currencies and the exchange itself. Without a decentralized exchange, the people’s ability to invest in cryptocurrency is subject to governments, so that cryptocurrency is hardly more democratic than traditional capital markets. Governments can control centralized exchanges, and users are subject to authorities who can track and tax users at any time, or ban currencies.

Decentralized exchanges can vary considerably in terms of technology, lack of trust, security, legal consequences, economic consequences, and many others. Keep in mind that for many decentralized applications, one or more components can be off – chain centralized or have economic incentives to support a trend towards centralization. Most of the decentralized exchange protocols usually work with chips with the same technical implementation and are on the same distributed ledger platform.


Though the motive of cryptocurrencies was decentralization before decentralized exchanges can achieve the popularity of centralized exchanges, they will have to become more user – friendly, interoperable between different block architectures and increase their liquidity.


Mt Gox: Has the time come when Mt.Gox Creditors will be paid?



As reported by the Mt Gox trustee, They still have 141,000 BTC and 142,000 BCH and the trustee seems to be taking charge to return the funds to the victims.

The small cryptocurrency community back then was in shock when the biggest bitcoin exchange Mt Gox (at that time) was hacked and around 850,000 BTC were stolen which were worth around $450 million back then and around $3.4 billion according to today’s price. Years have passed since the incident, however, only a few the victims have received their share and most of them are still waiting for their lost funds.


Mt Gox to credit victims?

As reported by Nobuaki Kobayashi, the Mt Gox trustee, Mt Gox still has more than 141,000 Bitcoin and 142,000 Bitcoin Cash and the trustee seems to be taking charge to return the following funds to the victims. The victims were super excited to hear this and Twitter seems to be full of tweets claiming that the exchange has finally made its decision of returning the lost funds to the victims.

However, it is worth noting that Mt Gox might have more than $631 million worth of Bitcoin and Bitcoin Cash, the number of funds to be compensated are likely much more than this amount. The other documents on the website claim that the victims shall be sent a notification regarding the approval or disapproval of their claims based upon their type of filing (online or email).


Nobuaki Kobayashi said that after a few days, the Rehabilitation Trustee of Mt Gox will be announcing the results of the claims filed by the victims. The result will showcase whether or not their claims have been accepted.


Missed the deadline?

If you are one of the victims and you’ve somehow missed submitting your claim, you can still download the claim form from the Mt Gox website. However, if these claims made after the deadline shall be accepted for refunds will be decided by the court.


Is there any timeline for the claims?

According to Nobuaki Kobayashi. he will contact the victims soon. So there is no specific timeline as to when the funds will return to the victims. However, it is still great news for the people who have been waiting for over 5 years and they are surely happy about the fact that they will soon be compensated.


Cryptocurrency investors are now wondering how will this affect the bitcoin price? What do you think? Tell us in the comments section below.

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Alert: Bancor Hackers move 25433 Ethereum



Three days ago, Bancor Exchange hackers moved around 25,433 Ethereum to an address which seems to be a mixer service address or an exchange.

The whole crypto community was in shock when Bancor was hacked on 10th July last year with more than $23 million worth of Ethereum being stolen. Almost eight months after the incident, the hackers have allegedly made transactions from the wallet where the stolen Ethereum were kept.

bancor hack address

Three days ago, the hackers moved around 25,433 Ethereum to an address which seems to be a mixer service address or an exchange. It cannot be determined yet whether the funds can still be tracked or not.

It might be the situation where the hackers are trying to bewilder people so that the funds can be cashed out later from the new address as the older address was already in the view of people and even etherscan displays a cautionary sign above the previous address “Warning! There are reports that this address was used in a (Bancor) hack. Please exercise caution when interacting with this address”.

The Bancor Hack:

Bancor decentralized exchange was hacked last year where the private key was stolen in an uncertain manner by a hacker that still remains mysterious.

Around 25,544 Ethereum, 230 million Pundi X tokens and 3.2 million Bancor Tokens were stolen during the hack. According to Bancor, the hack was due to the compromisation of a wallet that was kept for smart contract upgradation.

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QuadrigaCX mystery takes a shocking turn: Wife reveals CEO used own money to fund user withdrawals



Widowed wife of Gerry Cotton, the dead CEO of QuadrigaCX exchange claims that her husband used to mix his own money with the exchange's funds.

The current situation of the defunct exchange QuadrigaCX is just like a thriller movie as cryptocurrency enthusiasts around the world are curious to know what exactly has happened and what was the exchange up to. It was in the news recently that Ernst & Young, one of the top auditing and law firms in the world had revealed that QuadrigaCX’s cold storage wallets had almost NIL amount of user funds. This was quite shocking for the people who had millions of their investment or trading funds on the exchange as they were not hoping for this.


QuadrigaCX: A Shocking Turn

The situation gets even worse now as the widowed wife of Gerry Cotton, the dead co-founder, and CEO of QuadrigaCX exchange claims that her husband used to mix his own money with the exchange’s funds in order to fulfill customer withdrawals. According to Gerry’s wife, she does not know exactly how Gerry used to operate his business/exchange, however, he used to tell her that he had to keep transferring his own personal money into Quadriga CX exchange to fund the user withdrawals last year.


The statement of the widowed wife came into the picture soon after Ernst & Young revealed that the cold storage wallets of the exchange were nearly empty. A report also claimed that the exchange’s funds (around 600,000 ETH) were stored on different exchanges namely Kraken, Bitfinex, and Poloniex, after being transferred from the cold wallets.


The situation got worse long before the death of Gerry Cotton:

The situation had got worse long before the death of the CEO of QuadrigaCX, Gerry Cotton. The company was already in huge trouble and also is facing a legal battle with a bank. The CEO had to fund the exchange withdrawals using his own personal savings which may be because the holdings of people were being spent on personal expenses previously or had been lost on gambling or other activities. This is not confirmed and yet to be known. However, the people drew attention to the QuadrigaCX case only after the death of the CEO this year.


Is there a Change of Recovery?

If the CEO of QuadrigaCX, Gerry Cotton had really transferred the cold wallet funds onto other cryptocurrency exchanges as being reported earlier, and the auditors are able to track these fund’s transactions, there might be a chance for the victims to get their funds recovered, either fully or partially.

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