As per news, a topic attracting heavy debates these days is regarding what type of crypto-exchange platforms are better. Whether it is decentralized or centralized?

What Type of Crypto-Exchange: Decentralized Or Centralized?

As per news, a topic attracting heavy debates these days is regarding what type of crypto-exchange platforms are better. Whether it is decentralized or centralized?

The whole concept of cryptocurrencies is very much based on protocols that are decentralized in nature. But when it comes to trading, the holders of digital currencies prefer to conduct their trades through centralized platforms. The rationale behind is that centralized platforms/exchanges are more secured as compared to decentralized exchanges.

There was a time when owning a trading account with a centralized crypto-trading platform was considered essential. The account was to be used for selling and purchasing, trading, and exchanging digital assets.

However, in the past three years, there is a huge debate regarding the benefits of decentralized exchange versus the centralized exchange. For the time being, the general preference is given to decentralized platforms over centralized by crypto investors. This is irrespective of the fact that trading with a decentralized platform is comparatively risky.

But these days it seems that not only the decentralized but the centralized exchanges too are facing difficulties. In the recent past, relationships between the world’s renowned centralized exchanges (such as Coinbase, Binance or OKEx) and the regulator are worsening. News reports suggest that various crypto by-products being offered by these exchanges were not appreciated by the Regulator. Resultantly, disputes developed between the exchanges and regulator which then went up to the Court of law.

Similarly, scams involving looting of huge sums of money recently occurred in Coinbase, Binance, and OKEx. In a case or two, it had been found out that the administration of the exchange was involved in allowing the hack to occur.

At the end of the day, it was the exchanges that had to face the fire as the Court findings were in favor of the regulator. In between these disputes, the affected parties were none other than the investors whose monies were lying with the exchanges. In addition, being a decentralized exchange also goes against the investor. For instance, when any hack was committed at these exchanges, no refunds were compensated to these exchanges’ customers. Meaning thereby that whether funds were stolen or made to be stolen, in both cases losing party is the investor/customer.

So both i.e. decentralized as well as centralized exchanges have their own pros and cons. However, there is a genuine need to provide more security to customers and/or investors.

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