In an ever-changing crypto world, the ability to easily and freely trade a crypto asset plays a large role in it's mainstream adoption. Because of this, there is a greater need for services that provide alternative solutions to that of traditional services that can no longer keep up with the fast pace. The most prominent of these services is an exchange. The giants of crypto exchanges like Coinbase and Binance have long been dominating the market. They are custodial, meaning they are in control of your funds. However, because they are constantly under cyber-attack, they are subject to hacks and security breaches. Although their dominance is still undeniable, the exposure of these weaknesses has created an alternative solution: a non-custodial exchange.
What is a non-custodial exchange?
A non-custodial exchange is a decentralized crypto exchange platform that does not hold custody of a user's funds. Private keys are never stored on these exchanges, so users have full control of their funds.
Why choose a non-custodial exchange over a centralized exchange?
If a non-custodial exchange is decentralized, then a custodial exchange is one that is centralized. The biggest difference between the two is custody of funds, obviously. Why is this a big deal? Well, if the recent Twitter hack has taught us anything is that centralization, especially in the crypto world, is fragile. This fragility stems from the fact that, because centralized crypto services hold large amounts of funds, they are often big targets for theft. This is an age-old concern of centralized financial entities, not just of cryptocurrency. Centralization in crypto undermines and contradicts its vision—to be community-based and not be of a single central authority. Custody of funds is not the only advantage a non-custodial exchange has over a centralized exchange. Other advantages include:
Security
Any exchange platform is susceptible to being hacked so having full custody of your own funds brings a great deal of security. There are many examples of major centralized exchanges being hacked and compromised—most notably, Binance in 2019. Using a non-custodial exchange reduces the risk of losing money in case of a hack, making it safer.
Anonymity
Non-custodial exchanges grants customers full anonymity, giving them extra privacy. Custodial exchanges, on the other hand, must comply with KYC and AML laws.
No central authority
Governments around the world are coming down hard on cryptocurrency. China and India banned cryptocurrency exchanges and many other countries have restricted cryptocurrencies. Unlike centralized exchanges, no central authority can impose laws and regulations on a decentralized exchange.
Why do centralized exchanges dominate the market?
For one, centralized exchanges have been around longer than decentralized exchanges, so they are well-established. They maintain their dominance by providing more liquidity, larger volume and easy-to-use platforms. Decentralized exchanges have less liquidity and typically can't handle as much volume. Their User Interface can be slow and difficult to use. Although decentralized exchanges are more inline with the fundamental principles of cryptocurrency, they are inferior to centralized exchanges when it comes to functionality, scalability and liquidity which hinders it from mass adoption.
How can decentralized exchanges compete with centralized exchanges?
Instant exchange is one solution. An instant exchange is a decentralized exchange that is able to aggregate prices and liquidity from custodial exchanges. It offers a fast, simple and secure exchange platform that allows users to maintain anonymity as most of them don't require registration. Like a traditional decentralized exchange, an instant exchange gives users complete control of their funds but it takes it a step further; users only need to send the exact amount they want to exchange and they will receive their converted crypto directly in their wallet . Equipped with many benefits of both decentralized and centralized exchanges, instant exchanges have gained popularity recently due to how simple and easy it is to use. There are many instant exchanges out there but one that stands out is ChangeNOW.
ChangeNOW explained:
ChangeNOW is an instant non-custodial cryptocurrency exchange service that provides simple and fast cryptocurrency swaps without limits. What makes ChangeNOW stand out?
It's registration-free
No registration is required. Start trading right away.
It's fast
Average exchange time is 2 minutes.
It supports many coins
ChangeNOW supports over 200 coins.
It has fiat to Crypto buying
ChangeNOW is one of the few non-custodial exchange services to support fiat to crypto buying.
It has good rates
ChangeNOW is integrated into popular trading platforms such as Binance, Bitfinex, Huobi, and OKEx to give you the best rate at the time of trade. Customers have a choice of two rate flows, floating and fixed. Floating rates fluctuate depending on market conditions; as a result, you might receive more or less by the end of the transaction. Fixed rates are safe from fluctuations, giving customers stability of their conversions.
How does ChangeNOW work?
ChangeNOW has an easy-to-use user interface that works well on any browser. An android and iOS app is also available for download on Google Play and App Store, respectively. With no account registration required, exchanging cryptos is a simple 4-step process.
Step 1: Go to changenow.io and select desired exchange pair.
Step 2: Provide address for the wallet you want your converted crypto sent to.
Step 3: Confirm the exchange.
Step 4: Deposit funds and complete the exchange.
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