Exchanges have started to gain prominence within the following months. According to CoinInvestmentReview, the popular exchanges such as Binance already making decentralized platforms, it’s a clear sign that decentralized exchanges are heading in the right direction.
Decentralized exchanges are more secure than centralized platforms, which is more susceptible to hacks. They are created in a manner where people can have ownership of their coins via private keys. This prevents all the cryptocurrencies from being collected together in one point of attack or honeypot.
In recent news, Binance recently acquired Trust Wallet, an anonymous, open sourced, decentralized wallet that supports Ethereum and over 20,000 different Ethereum alt tokens.
This news only shows the beginning of the revolution.
The Problem With Centralized Models
The current systems that use the Internet of Things rely on centralized communication models, known as the client/server paradigm. All of the devices are identified, registered, and connected to cloud servers which sport large storage capacities.
The connection of these devices has to go through the internet, even if they’re a few feet apart. While this model has connected basic computing devices and can continue to support small networks, centralized models won’t be able to support the needs of our ecosystem in the future.
Binance’s recent acquisition is a sign of a change in payment systems. While centralized models function correctly, they’re known for being slow, ineffective, and less secure. That’s why decentralized exchanges are the answer.
How Does This All Tie Together?
Exchanges have shown multiple stages of evolution since it was created. Before banks were created, the value was exchanged through a barter system. As technology and society have progressed, we’d see more efficient ways to exchange valued goods.
For IT teams, they’ll have to adapt with the constant rate of growth. This means that they’ll have to update their systems, protocols, and train their team to work in a “decentralized” manner. IT businesses will need to change their business model to include a “blockchain-friendly” approach.
ICOs and Crowdfunding
Initial coin offerings allow for companies to raise money for a new digital token in exchange for fiat of cryptocurrency. However, there is an evident risk with ICOs. In a few jurisdictions internationally, ICOs remain in a grey area, but there are some countries that want to put them in regulatory funds. Always proceed with caution when venturing into ICO territory.
When thinking about Binance’s recent acquisition, it directly impacts ICOs. Now, ICOs will use Binance as the main exchange. Newer ICOs will want to use decentralized exchanges to increase the value of their token and increase exposure to their personal project.
Due to the growth of decentralized exchanges, new investors want to get involved. As a result, there’s been an increasing demand for bringing improved financial products in the traditional market.
Benefits of Blockchain
The main benefit is that blockchain is public. Everyone participating in it can see the blocks and transactions performed within it. It doesn’t mean that everyone can see the transaction content, but its protected by a private key.
The blockchain technology has made it possible to record transactions in a way that’s transparent, secure, auditable and efficient, and extremely resistant to outages. As such, this can disrupt traditional business models and leave room for newer ones.
Another reason why IT specialists use blockchain is due to its open access. For instance, blockchain enables the usage of smart devices that can execute financial transactions or exchange data, or without the need for a centralized broker.
Thanks to blockchain technology, there is an unlimited number of possibilities. With its promise to provide secure and transparent transactions, this technology is poised to be one of the main pillars within the digital world.
Public vs. Private Blockchain
Blockchain is truly the information technology of the future. Traditional IT systems are made with multiple computers that are connected into one network. However, they are often easily attacked by outsider and insider threats.
Because of this, private blockchains were created. In a private blockchain, all participants are known and verified. This is useful when the blockchain is utilized in multiple organizations that have the same mother entity.
Public blockchains are for more user-centric models. In this model, everyone can write, read or share data. For example, Bitcoin does this where they allow anyone to write within its framework.
Blockchain And The IoT
Blockchain is the technology needed to settle reliability, privacy, and scalability issues within the IoT. This technology can be used to connect billions of devices, allow for coordination and transactions across devices.
And it allows for increased savings amongst manufacturers. The decentralized model will help eliminate significant failure points, creating a more reliable ecosystem for devices to run. The technology’s cryptographic algorithms help keep the user’s data’s private.
The decentralized, trustless, and autonomous capabilities of blockchain make it an ideal IoT solution. It’s not a surprise why most IT technology groups have become the first early adopters to blockchain technology.
In an IoT network, blockchain can keep a record of all registered smart devices. This allows for the smart devices to function without needing a central authority. The blockchain then opens the door to a series of complex IoT instances that were previously impossible to implement.
The Future of Exchanges
As we’ve stated earlier, the future of IT and exchanges lies in blockchain technology. As it continues to grow, we’ll notice improved IT, models. No longer will data be safe in a cloud storage system. IT teams will have to implement blockchain technology to ensure that the data stays protected.
To conclude, it’s evident that exchanges are growing. This is great news for the IT sector, as it means everyone will have stronger networks and better systems to deploy their apps. Out of all of the industries that have a bright future, the IT industry comes in first place.
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