The concerns around centralized cryptocurrency exchanges being hacked, corrupt, or operating illegally has spread fear amongst traders for years. From Mt. Gox (the largest crypto exchange in 2013) closing its doors and leaving its users without ~850,000 BTC to the 1Broker exchange recently seized by the FBI, you can assume the worst when it comes to leaving your coins in these companies hands.
Today, we’ll discuss the recently introduced #ProofOfKeys movement that could reveal the scammers among centralized exchanges and why you should consider a decentralized exchange (DEX) in 2019. We crafted a list of the most advantageous DEXs that you can use, as a trader or just simple crypto owner.
“Proof of Keys” is a movement founded by the famous Bitcoin investor, Trace Mayer. It started this year on the 10th anniversary of the first-ever Bitcoin block mined on January 3rd, 2009. He suggests that every Bitcoin owner with BTC stored on a centralized exchange should withdraw it to his own wallet on this date.
As you know, all the coins stored by a third-party service (i.e. centralized exchange) are not truly yours. It’s more like a custodianship where they are holding them for you. In this relationship, you’re only a number in their database, while they are the true owners of the private keys that account for the real coins on the blockchain.
So this makes us wonder, “Do these centralized exchanges really own 1:1 the BTC claimed in this database? Will our collective action prove the opposite?”
This is exactly what happened with HitBTC, a centralized exchange with a daily trading volume of more than 40,000 BTC. When trying to withdraw their BTC that is rightfully theirs, some users had the unpleasant surprise of being welcomed by the “Withdrawals are temporarily disabled on your account” message.
In order to make #ProofOfKeys obsolete and always make sure you are the true owner of your assets, decentralized crypto exchanges are the best solution available right now:
If you’re planning to further support your monetary independence, we are bringing you a handcrafted list of the top 10 decentralized crypto-changes (DEXs) that can help you out in 2019:
IDEX is a decentralized exchange for trading Ethereum (ERC-20) tokens. IDEX combines the speed of centralization with the security of blockchain settlements.
Paradex is a relay platform that allows customers to trade hundreds of Ethereum (ERC-20) tokens directly from their own wallets.
VDex is a tradable digital assets platform that integrates the Vespucci analytical interface and its own Verto wallet. Its users maintain their own private keys for VTX and a vast array of other digital assets even while trading.
*vDEX is part of a more complex DAE (digital assets ecosystem) that is governed by a DAO (decentralized autonomous organization) represented by a member-driven foundation and a third party partnership structure that ensures its ability to become self-regulating, self-funding, and autonomous.
0x is an open, permissionless protocol allowing for Ethereum (ERC-20) tokens to be traded on the Ethereum blockchain.
Bancor allows its users to convert any token on the network with no counterparty and at an automatically calculated price.
Kyber offers seamless transactions between individuals, dApps, and ecosystems.
Waves DEX is a decentralized market where users can trade Waves-based assets, including Waves, Waves Assets, fiat tokens, and cryptocurrency tokens, such as wBTC and wETH.
Radar Relay is a decentralized token trading alternative to the currently popular centralized exchanges that have been built on Ethereum and the 0x Protocol.
ForkDelta currently acts as an open source, updated interface for EtherDelta’s smart contract with an active and public development team.
Bisq is an open-source, peer-to-peer application that allows you to buy and sell cryptocurrencies in exchange for national currencies.
Will 2019 be the year when crypto traders shift to DEXs? Given that there’s always FUD (Fear, Uncertainty, and Doubt) around centralized exchanges and with more regulations coming in, we can assume that it’s only a matter of time until the decentralized counterparts take over. Until then, you can be the witness to a shift in trends where more and more traders will jump ship and consider the real advantages that decentralized crypto exchanges bring!
Kirill Shilov — Founder of Geekforge.io and Howtotoken.com. Interviewing the top 10,000 worldwide experts who reveal the biggest issues on the way to technological singularity. Join my #10kqachallenge: GeekForge Formula.