Tuesday, June 22, 2021
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Let’s talk about CEX (Centralized Exchanges)


Where there’s people, there’s problems. Wouldn’t the world be much better if everything was conducted over the blockchain? Your accounts, your trading activities, your shopping, your gaming, your haircuts? Maybe not that, but there is a lot to be said for a self-governing, trustless environment for Decentralized Finance.

For one, everything is conducted under a veil of absolute privacy, for two there’s no room for human error and for three, on the blockchain, security is all but guaranteed.

CEX vs. DEX

Compare CEXs (Centralized Exchanges) to DEXs (Decentralized Exchanges) or those that work over the blockchain, if you will. Think about the example of Robinhood, one of the most popular trading platforms for retail traders, and how when the price of Bitcoin or its allies are shooting up, Bitcoin is suddenly unavailable for trading on Robinhood. This is a notable example that has led to over 90 rather serious court cases.

Think now about Binance. Binance is large. It is a leading centralized exchange that deals in the trading, buying and selling of a huge selection of cryptos. And yet, Binance has had more outages and instances of shoddy performance than any leading DEX. Binance’s latest tweet:

Lets talk about CEX Centralized

All withdrawals are temporarily suspended on #Binance

. Rest assured our team is working on it. We apologize for any inconvenience caused and thank you for your patience.

Ouch, I don’t need to show you the reactions to this tweet to make you understand the outrage and hilarity that ensued. You don’t get withdrawal suspensions on the blockchain. Know why?

Everything is automated, everything is reconciled and approved on the blockchain. No room for human intermediation.

Everything is automated, everything is reconciled and approved on the blockchain. No room for human intermediation.

To the moon

When Bitcoin flies to the moon or indeed Doge, suddenly exchanges see a huge influx of subscriber additions that they just cannot handle. Often registration is shut down, or the verification process just breaks. The result makes for a frustrating experience all around.

You don’t get that with the blockchain. Seeing my point here? 

One classic example of a DEX gateway is called the OrionProtocol. It is open-sourced, so the software is free to anyone, it is decentralized meaning no broker is taking the other side of the trade or transaction, it is simply you against the blockchain, with all your activities reconciled and verified through the distributed ledger (no room for error).  

With a protocol like this, you can trade across all major exchanges, both centralized and decentralized, from the safety of your own wallet. You don’t need to open an account with each digital exchange, and there is no KYC to conduct, thus saving you sweat and tears. Orion is literally a door that opens up into all the exchanges, while allowing you to use your own wallet. 

Finally, take the case of Turkey, where the Central Bank banned the use of cryptos for payments and then the leader there axed the head of the central bank leading to the Lire topping and the Bitcoin keyword search on Google leaping up fourfold, showing that people do not want to have their money governed in this way. 

With the blockchain, self-governance is often the name of the game, allowing members to decide the fate of native tokens and protocol applications. The future of the blockchain is bright and is unlimited as human imagination can dream.





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