Crypto Currency Exchange Market

Blockchain fuses the security of cryptography, the storage and transmission of data in the coded frame, with the peer-to-peer networks to make a mutual database of exchanges that is trusted, yet controlled by no one.

In case that Blockchain discover the uses as a part of different businesses we could see an all the more digitally coordinated global economy, something that could improve the financial growth and decrease the poverty.

Hundreds of Exchanges have been started

Major Bitcoin as well as the cryptocurrency exchanging platform in the global market has been including more than 100000 users for each day.

A large number of the main cryptocurrency exchanges, for example, Binance, Coinbase (GDAX), Bittrex, Kraken and Bitstamp have battled in managing the sudden surge in the demand for the cryptocurrencies. A few exchanges have re-designd their frameworks to enhance their versatility, while others have incidentally stopped opening new user accounts.

Unexpected growth rate

Changpeng Zhao, the organizer and the CEO of the Binance, the global market’s biggest cryptocurrency exchange with an amazing $9.5 bln daily exchanging volume, exposed that it has included more than 250000 users in just one day.

In December, both Coinbase and Kraken assigned a noteworthy part of their resources and capital in enhancing the customer support and the adaptability of their platforms. On Dec. 23, Kraken, which has discovered trouble in the account confirmations, unveiled that it has executed significant framework updates and upgrades in execution and will keep on developing its trading platform to support the new users.

In the next couple of months, worldwide cryptocurrency exchanges will roll out some drastic improvements to their frameworks. Until then, the users, particularly newcomers, will think that it’s hard to open the approved trading user accounts.

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Hybrid Cryptocurrency Exchange: Moving Towards A Better Future

Today, there are more than 500 crypto exchanges around the globe and the number continues to grow with every passing week.

A cryptocurrency exchange is an online platform that allows you to exchange a fiat currency for a crypto asset or one digital currency for another. As crypto trading grows, an increasing number of companies are developing more advanced and secure crypto exchange software.

However, not all crypto exchanges are made equal. While most crypto exchanges, such as Coinbase and Bitfinex are centralized, there are a few decentralized exchanges too, such as RuDex and Waves Dex. Recently, a third type of crypto exchange has emerged that is making headlines in the crypto world. It is called a hybrid cryptocurrency exchange.

Read on to more about hybrid crypto exchanges.

1. Evolution of Cryptocurrency Exchanges

The idea of crypto exchanges began with peer-to-peer trading of cryptocurrency, giving rise to decentralized exchanges (DEX). As decentralized exchanges don’t need a middleman, the cost of transaction and trading fees are next to none.

They are also far more secure. However, as trading transactions take longer to process, most DEXs lack liquidity. They also have laxed KYC and AML verifications, and are not regulated.

Cryptocurrency exchanges (CEX), just like their traditional counterparts, act as intermediaries. So, they charge trading and transaction fees. As a centralized white label crypto exchange has to follow KYC and AML regulations, most CEXs are legal and regulated. They are also easy to use.

Recently, hybrid exchanges seem to have taken off.

2. What Are Hybrid Cryptocurrency Exchanges (HEX)?

A hybrid exchange offers the perfect combination of centralized and decentralized platforms.

CEX + DEX = HEX

These exchanges aim to provide speed, legal compliance, and liquidity of a centralized exchange along with the security of a decentralized exchange. You will be able to enjoy all the perks of a CEX while trading directly from your hardware wallet as a DEX does.

Right now there are only a handful of hybrid exchanges such as Next and Eidoo. However, as various companies have started developing hybrid white label exchange software, we will see new platforms emerge in 2019 and beyond.

3. Why Hybrid Exchange Alternative?

One of the primary reasons why the trend is shifting towards hybrid exchanges is to provide the best possible functionality with enhanced security.

CEXs are vulnerable to cyberattacks. As the CEXs act like intermediaries, investors are required to trust them for keeping their funds and identity safe. They don’t have any control and custody over their funds. In other words, hackers can steal hard-earned funds from traders although exchanges get hacked. In a recent cyberattack on Coincheck, a Tokyo-based cryptocurrency exchange, cybercriminals stole crypto assets worth almost $533 million.

Most centralized exchanges, especially the ones that are not regulated, are also notorious for engaging in front-running. Front-running involves exchanges inserting their own orders first in anticipation of big price movements. This considerably undermines the trading capabilities of individual traders.

DEXs, on the other hand, lack liquidity as they are not suitable for institutional investors. That’s why many crypto experts are exploring the possibilities hybrid exchanges can offer.

4. Benefits of Hybrid Cryptocurrency Exchanges

Hybrid cryptocurrency exchanges offer a few stellar benefits to both, individual and institutional investors.

• They bridge the gap between DEXs and CEXs in terms of functionality, regulation, and transparency. It’s a win-win for everyone.
• They provide access to the real-time trading process for individual traders.
• You can integrate existing conventional trading solutions into the exchange platform using blockchain infrastructure.
• Users can enjoy a transaction speed as fast as or better than CEXs. It applies to both, crypto-to-crypto and crypto-to-fiat currency transactions.
• Traders get access to an extensive array of trading tools that provide better reliability, modularity, and scalability.
• Traders will not need to keep their funds on the exchange. Thus, their crypto money will be less vulnerable to cyber attacks.
• Users don’t need to manage two sets of credentials as most HEXs require a synchronized identity model.

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Everything You Need to Know about P2P Cryptocurrency Exchanges

Crypto trading is the bedrock of the global cryptocurrency market. To complete the four critical aspects of trading including capital deposits, order books, order matching, and asset exchange, you have to use a cryptocurrency exchange platform. Most regular exchanges use a centralized white-label crypto exchange to process transactions.

While centralized exchanges are quick and easy to use, they are often susceptible to technical failures, cyberattacks, and theft. This is where peer-to-peer (P2P) or decentralized crypto exchanges come in. They allow the seller and the buyer to complete a transaction directly without the need of a trusted third party.

P2P exchanges are steadily gaining momentum in the crypto community. For example, Paxful, a popular peer-to-peer crypto exchange, gained a trading volume of $739 million in 2018, up by 130% in transaction volume from $320 million in 2017.

A. How P2P Exchange Works

A P2P crypto exchange does not rely on a third-party service to hold the customer’s funds. As buyers and sellers can directly exchange cryptocurrencies, there is no need for an individual or institutional middleman. It is a striking example of the blockchain ideology, which is the backbone of crypto.

A P2P system runs exclusively as cryptocurrency exchange software. Usually, a preprogrammed set of instructions carries out each transaction automatically. Unlike a centralized exchange, a P2P exchange matches the people behind buy/sell orders instead of matching buy/sell orders in the ledger.

So, when the software finds a matching buy-and-sell order, it connects the respective traders with each other. They can process the transaction without an intermediary. You can to involve third-party arbitrators only in case of a dispute. However, by default, there is no human intervention on behalf of the exchange.

B. The Transition from CEX to P2P Exchange

Although centralized exchanges (CEX) provide a gateway between the real-world market (fiat currency) and crypto economy, they are vulnerable to frauds and cyberattacks. You also need to maintain a substantial amount of time, money, and labor to create paperwork and carry out daily transactions. Essentially, traders have to pay for this infrastructure in the form of transaction fees and service charges.

The transition from centralized exchanges to P2P exchanges took place to provide a better alternative to the traditional centralized trading system. They are way more simplified, trustless, transparent, and cost-effective compared to the CEXs.

C. Advantages of P2P Exchange

P2P exchanges offer several advantages that attract many crypto advocates. Some of the notable benefits include

1. Low Transaction Cost

It cuts out the central authorities creating a trustless ecosystem of crypto trading. As a result, you don’t have to shell out hefty transaction fees and other services charges. As P2P exchanges are simple software, the overhead costs are negligible.

2. No Government Censorship

As there are no middlemen involved, P2P exchanges offer high resistance to transaction censorship. Government authorities can’t exploit such exchanges like the CEXs by imposing regulations as there is no central authority. Thus, anyone can trade on a P2P exchange.

3. Privacy

Unlike centralized crypto exchanges, most P2P exchanges aren’t required to conform to AML and KYC regulations. In other words, you don’t have to share personal information such as place of residence and ID number. So, your trading activity remains private. There is also no risk of identity theft.

4. Security

Security is perhaps the biggest benefit of P2P exchanges as you don’t have to entrust your crypto coins to a third party. According to a recent estimate, exchanges suffered a total loss of $882 million due to targeted attacks in 2017 and in the first three quarters of 2018. Most attacks exploited the security vulnerabilities in the centralized hot wallets of the exchange. However, as no hot wallets are required in P2P exchanges, they offer better security.

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CEX 101: Understanding Pros and Cons of Centralized Cryptocurrency Exchanges

Whether for profit or obtaining another currency, trading has been at the heart of the fiat currency ecosystem. The cryptocurrency realm is no exception to this phenomenon. Considering cryptocurrencies didn’t exist until 2009, the overall crypto trading ecosystem has made substantial progress over the last decade.

According to a recent study by Bloomberg, the top ten cryptocurrency exchanges are bringing in as much as $3 million per day as fees, and steadily heading towards $1 billion a year. However, almost all top-earning crypto exchanges are centralized where crypto coins get traded much like the share trading on well known New York Stock Exchange.

Most traders are likely to begin their journey through a centralized exchange as they offer a variety of benefits to both individual and institutional traders.

Read on to know more.

A. Advantages of Centralized Cryptocurrency Exchanges

The reason centralized crypto exchanges have become popular is that they offer several advantages to both individual and institutional traders.

1. They Are Usually Regulated

One of the most touted benefits of centralized crypto exchanges is government regulations. Most exchanges have to get a trading license and follow the KYC and AML regulations set by the respective government authority. Traders have to submit an identity proof to open an account with the exchange.

Many investors may find it easier to invest in a regulated and licensed centralized exchange than a DEX considering their jurisdiction. You can also hold these exchanges responsible and take the appropriate legal action to recover your investment.

2. Fiat to Crypto Conversion

Another principal advantage is that you can convert fiat into crypto and the other way around through a centralized exchange. However, decentralized exchanges (DEXs), allow the only crypto to crypto transactions as they are mostly unregulated.

Also, decentralized exchanges can’t accept payments through bank wires and credit/debit cards owing to their unregulated decentralized nature. Most CEXs can also make out payments in fiat currencies should you choose to withdraw your funds.

3. Large Volume and High Liquidity

Being regulated, most institutional and individual crypto investors are interested in trading only through centralized exchanges. In fact, nearly 99% of cryptocurrency trading volume remains on centralized exchanges. Large volume lends higher liquidity, allowing traders to complete their transactions quickly. As a result, you can capitalize on the smallest price movement to make a profit.

4. Price Stability

Centralized exchanges also lend price stability. The extreme price volatility not only negatively affects the crypto traders but also the projects that rely on the cryptocurrency for finances. It also makes a crypto asset abstract, hard to spend, and inefficient, prohibiting it from going mainstream. As CEXs control most of the flow of cryptocurrencies, they can avoid sudden volatile price movement.

5. Network Stability

Using the centralized crypto exchange software for listing and trading a newly mined crypto coin provides your project with initial stability. It helps you build better product awareness in the crypto community as your asset gets exposed to hundreds of traders from the start.

Once your crypto asset establishes itself, trading it over decentralized exchanges with low trading volume and more safety becomes a viable solution. For the time being, this is the most practical approach to develop your crypto project in a more stable and enriching environment.

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