#Explained Decentralized Exchange working explained Published 12 months ago on June 10, 2018 By Nadja Eriksson Share Tweet Peer- to-peer or decentralized exchange Peer- to-peer or decentralized exchanges work purely dependent on a software. All their computations are operated and maintained by this. There is no requirement of a trusted third party to establish trust and facilitate a trade directly between two willing parties in the market. No such processing of trade or maintenance of records needs to be done by this third party, all transactions occur based on trust established by cryptographic methods. Like any other place, a cryptocurrency exchange is where buyers and sellers conduct their purchases and transactions. For eg, a Bitcoin seller uses the exchange’s address to deposit his or her bitcoins. One can then use their balance on this exchange to sell their bitcoins for other coins, dollars and other digital assets. On the other hand, a person or party looking to buy anything on this exchange would deposit his or her money with the exchange and this balance would then be used to buy bitcoins from the sellers. This way, it facilitates a direct merchant-customer relation, without a government authority or centralized bank having to meddle in between. Significantly reducing any sort of processing fees, transaction fees, additional extra charges, and processing time for transactions to settle, these exchanges are steadily gaining popularity among people and more and more people and institutions, and even the government, is looking to explore this whole new technology based upon the concept of blockchain. China has already added blockchain technology into its 13th 5 year plan. Evolution of peer – to – peer exchanges Owing to how very few online and physical stores and outlets actually accept cryptocurrencies as a legal form of payments for their products or services, online exchanges have been the primary source of transactions in the world of digital currency. Cryptocurrency exchanges serve as an interface for people to connect cryptocurrencies and the economies of real world. Unlike Bitcoin, online exchanges are themselves run by companies thus making its existence a complete redundancy. The company’s staff oversees and manages transactions between the users and collect fees for their services. This is the reason why a decentralized peer to peer exchange idea was formulated and now these exchanges are not run by people but a software, and the network is maintained by a group and dedicated volunteers all over the world. Prevention of fraud in decentralized exchange Fiat money transfers are refundable however, transactions concerning cryptocurrencies are non refundable, irreversible and irrevocable. As a result, one might buy a cryptocurrency like bitcoins, in exchange for their fiat currency and then ask their financial institution like banks for a refund. This ultimately would leave the seller with absolutely nothing. In order to eliminate the chances of such fraudulent activities, different methods are used by different cryptocurrency exchanges. Coinffeine, a very popular decentralised peer to peer bitcoin exchange requires the two willing parties to make a deposit before a transaction between the two is initiated. This deposit can be understood as a security deposit one pays to ensure the owner that no scam would take place. If the transaction is initiated, processed and logged onto the blockchain uncontested, without any issues, this deposit is returned back to their payer. Another Bitcoin startup company known as LocalBitcoins actually has the option for the two willing parties to meet in person. Although this limits trading options because of geographical limits, one can ensure that a transaction has been made earnestly and honestly before parting ways. Advantages of peer to peer exchange Although a single point of central control provides faster trading solutions, it also incurs for additional service charges and and serves as a single point of complete system failure. Any attack or failure at this central point would affect the working and trading of the entire network involved. Eliminating the requirement of such a single point of authority, a decentralised peer to peer exchange provides high resistance to transaction censorship. There are not vulnerable or obligated to the interference of the government or a centralised financial institution. Even if a particular chunk of the network is forced to shut down its working, the remaining chunk can keep making trades and transactions without any system or network failures. There is virtually no point of control which can be pressurised or dealt with to shut down the operation of the entire network. Related Topics:AltcoinBitcoiinBitcoinbitcoin exchangeBlockchainBlockonixCoinbaseCoingeckoCoinscheduleDecentralizeddecentralized exchangeEthereumexchangeNext Exchangepeer to peer Up Next Distributed Ledger: Demonstrated Don't Miss Cryptocurrency Mining: Explained Continue Reading Advertisement You may like Circle Fires 30 Employees due to Regularity and Market Conditions NYAG Case: Bitfinex and Tether Argue for Case Dismissal Craig Wright registers Copyright for Satoshi Whitepaper: BSV Surges 85% The Current Bitcoin Market Scenario: Price Manipulation by Whales ETH to USD, 21 May: Ethereum Price Analysis, What’s Next? ETH Updates: Ethereum 2.0, Louis Vuitton, Chainlink and Price Analysis 1 Comment 1 Comment Pingback: What is Lisk Cryptocurrency? 2018 Predictions for Lisk. | APAC Newswire Leave a Reply Cancel reply Your e-mail address will not be published. Required fields are marked *Comment Name * Email * Website #Explained Alert EOS Holders, REX is here: All about the Resource Exchange Published 3 weeks ago on May 5, 2019 By Coinnounce - Coin Announcements The big thing everyone is chattering about right now is REX or Resource Exchange. REX is a marketplace made for the EOS blockchain that allows for the leasing of network resources in a risk-free way. It establishes a market where you can either borrow resources or rent out your available ones and then receive a return on those lent-out resources on a 30-day loan basis. When renting out your resources you do retain full custody of your EOS and you do keep your EOS votes. REX: EOS Resource Exchange REX will be held in maturity buckets that cannot be sold until they actually reach maturity. REX is a separate token which is used for the accounting of EOS resources on the EOS network. Risk-Free: The REX tokens will be redeemable for no-less than the number of EOS that you put in. So if you put in 1000 EOS and no one uses your resources, then you get your 1000 EOS back but if someone does want your REX, then, for example, you may get back 1050 EOS. The following is just an example and the current rate of return is incredibly small but that, of course, could change in the future. In order to be eligible to buy REX, the user must be voting for at least 21 block producers or delegating their vote out to a proxy and when they stake their tokens, they enable developers or anyone else who wants to use their unused resources. Remember: When you are staking, you are basically claiming a percentage of the EOS network resources. That’s whether you decide to use those resources or not. The NOT part is what REX is focusing on as many users have large unused surpluses that could be used others at a very low price. Thus, the Resource Exchange is trying to create an efficient on-chain marketplace for maximizing network resources. The service is already in very high demand as we have seen millions of EOS staked in just the first hours of the REX going live and thousands of buyers lining up to get those cheap network resources. Continue Reading #Explained IEO replacing ICO: Initial Exchange Offering Explained. Published 2 months ago on April 3, 2019 By Ruchi Ramaswamy Initial Exchange Offering ( IEO ) is a fundraising procedure in which developers create coins for their projects and send them to cryptocurrency exchanges for selling to cryptocurrency investors and traders. Initial Exchange Offering: Initial Exchange Offering is usually an agreement between developers and cryptocurrency exchanges, with some of the conditions that are common in the ICOs in the fundraising model. Initial Exchange Offering is an abbreviation for the “initial offer of exchange” – a fundraising procedure in which the exchange takes place on behalf of the token issuers. Although IEO is a relatively new phenomenon in the cryptocurrency industry, it is clear that securities trading is very similar – it can be estimated as a sign of the crypto’s maturity. From Huobi to Okex and Bitmax to Bittrex, the number of cryptocurrency exchanges offering the sale of Initial Exchange Offerings has increased. In order to maintain trust with its customers, the exchange must carry out a comprehensive evaluation of the project before the IEO is launched. IEO replacing ICO: While in the ICO, it is the developer’s business to ensure that the intelligent contract is correct and that everything goes according to plan, in the IEO model, a third party, such as a cryptocurrency exchange, fulfills the same obligations. Anyone who wants to participate in the IEO token sale must create an account on the exchange platform and fund their portfolio so that they can be willing to buy the token. While digital exchanges were only a platform for cryptocurrencies, the Initial Exchange Offering has introduced a new, value-added business model. Since the Initial Exchange Offering is usually carried out on cryptocurrency exchange, some potential investors may be excluded from the possibility of creating a new account and passing through the verification procedure, which usually takes several days. With IEOs, a cryptocurrency ( not the project developer himself ) acts as a counterpart, facilitating the fundraising process. While the exchanges continue to charge high fees for leading an IEO, the team behind the pawn can shift its focus from marketing and fundraising to the development of its project. The initial offer of Exchange introduces an intermediary to the decentralized fundraising model, which gives cryptocurrencies a strong sense of trust as they participate. You can invest in IEOs by simply having an account on a cryptocurrency exchange. By hosting the IEO on their respective exchange platforms, cryptocurrency exchanges directly confirm the credibility and reliability of the project. For IEOs, token issuers do not have to worry, as the exchange manages the KYC – AML process is also managed by cryptocurrency. Continue Reading #Explained Analysis: Decentralization is the future Published 2 months ago on March 17, 2019 By Joyce Lang In 2008, when Satoshi Nakamoto wrote down the famous white paper in which he proposed a decentralized financial system, he did so in the context of crumbling banks and governments, which as a centralized institution, caused an economic collapse due to poor decision – making and management. Decentralization is the basis on which the entire Bitcoin blockchain is based, and that is why Bitcoin was created primarily to provide an alternative to the central authorities that operate our current global monetary system. Today, the concept is challenged by the uncontrolled growth of Bitcoin mining – giants such as Bitmain, a Chinese mining company that continues to generate absurd profits and continues to monopolize the Bitcoin network in pursuit of industry dominance. Ethereum Blockchain The cryptocurrency economy has come to a conclusion – at least for the foreseeable future – Ether will continue to feed the ICOs and lay the foundations for distributed applications. Called Ethereum’s Proposals for Improvement ( EIPs ), they allow for massive participation in decisions that could radically change the future of the network. However, the use of EIPs Ethereum tries to embody the principle of the blockchain technology, namely centralization leads to errors and inefficiencies, while the network, with the right technology, can make better decisions and work more effectively. So, when companies such as Amazon and Chile’s Energy Authority support Ethereum, they do so in a project that advocates – and through EIPs – real practice decentralization. The need of Decentralization: Where buildings such as capitalism, money, and democracy need new codes, new software, updated smart contracts, better AI and a more united kingdom, full of corporate social responsibility, equal opportunities, and prosperity shared with all. It is not only software decentralization, but it is also the shift of human values to a new way of thinking about exchanges, energy and the shared future of humanity. The blockchain technology, which offers an alternative to existing trading, governance and finance systems, has the potential to disrupt the industry and create new and exciting opportunities for billions around the world. A development that has threatened to dig up decentralization is the creation of integrated circuits or ASICs for applications. Even more complicated and challenging to decentralize is the rapidly changing world of hardware and the fact that a large technology company now produces most ASICs on the market. While many Bitcoin advocates see the blockchain as nothing more than competition for existing payment methods or gold, others believe that the blockchain technology is the harbinger of things the world has never seen before. Bitcoin’s market share has been declining slowly in recent years, and although many believe that bitcoin will continue to grow, there is a rapid rise in other parts of the blockchain ecosystem. When decentralized blockchain protocols begin to break down the central web services that dominate the current internet, we will begin to see real sovereignty on the internet. The future of Decentralization: Recently, blockchains have become the focus of attention as the first technology to use decentralized device networks. With the promise of full ownership and monetization of their data, blockchains are seemingly convincing alternatives to older third-party data farms. While blockchains use the increasing movement of increasingly powerful personal devices, they have a relatively limited use case and do not fully exploit the potential of paradigm shifts. This is decentralization, which is a decisive factor in cryptocurrency and blockchain technology in general. In addition to the major cases of well – known use, there are examples of massive companies that eliminate a “one – point failure” in their closed systems, for governments that approve university degrees. Secondly, governments have historically been serving exchanges with asset seizures, which have paralyzed merchants who hold large amounts of cryptocurrency in the market. If decentralized exchanges become a real reality, the regulatory war will become even more complex for legislators: their current strategy is to target exchanges that operate under their jurisdiction. Blockchain technology can provide a new way of confirming identity, ways of moving data faster and cheaper, easier transactions such as payments, claims, and data sharing. 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