These are some terms that are used a lot in the crypto world. But, do all of us really fully understand them?
What is a Decentralized Exchange?
You don't need to perform a verification in order to store, sell, convert or buy any coins! Your identity is not needed, you have a wallet with the Decentralized Exchange, you use it to connect in the blockchain, you do your trading and then you Disconnect it!
Simple as that!
But let's talk more about the safety, Pros and Cons and everything else.
What is a Centralized Exchange?
Putting it in the simplest way...there is almost no difference from a actual bank. If you have a bank account you already know that they'll ask you for every personal data one might have, Name, surname, birth certificate, ID, phone number, home address, you occupation, anything and everything! They'll keep your money (with which they lease, loan and what not) and they charge you for keeping it safe, they charge you when you withdraw, when you deposit, when you buy/pay something and also for "maintaining" you account! That is pretty much the same story with the Centralized Exchanges.
We do risk our money when we invest in something! That is usually a calculated risk, but when you lose that money because someone has hacked the exchange and there is no one to give you insurance or at least more explanations...that is really disappointing. That is what actually have happened some time ago with some of the most known exchanges. Let me mention some of them (Bitrue, Binance, Coinmama, Cryptopia, Gatehub..etc.
Having that in mind you will always be seeking for a more safer and better exchange when you can do all of trading without the doubt that the exchange will be hacked. This is where a Decentralized exchange comes into the scene. Your funds are held by you, in your wallet and no one is responsible for you wallet but you. If your funds are lost that is because you were not careful with you private keys and personal things.
Some of the Centralized Exchanges won't even let you withdraw your own coins if you don't perform KYC verification. In i.e Check my post on HitBTC if you want to know how that feels.
But leaving this aside another problem is that even if you want to verify your account there are some Centralized Exchanges that just won't accept traders from specific places...in i.e USA.
This is not something that you will be struggling with when you use a Decentralized Exchange.
We know that many of Centralized Exchanges have a limit on depositing/withdrawing and also on trading plus they charge a % on trades we take or when we convert, withdraw or even deposit. When it comes to Decentralized Exchanges there are also fees but those are so low, usually from 0.05$ to 1$.
The whole idea behind Cryptos is to have a faster, safer, cheaper fund (money) management, where you become your own bank. But having said all of the above about the Centralized Exchanges, is anything going according to plan?
Let me know if you use a decentralized exchange.
What do you think about KYC verifications?
Catch with me on Leofinance!