Centralized vs Decentralized
Nowadays cryptocurrencies like Bitcoin, Ethereum, Ripple, Monero, Lightcoin and other currencies have become a global phenomenon which are traded in variety of exchanges. Let’s see what are the main differences between centralized and decentralized exchanges??? Security: In centralized exchange, you are trusting a third-party or sever which has total control over your digital assets while in decentralized system you trust a huge network of computers which are constantly checking out the blockchain network. So far, significant digital currencies worth of millions of dollars have been stolen from various exchanges. Cost: Centralized exchanges must be ready to pay higher cost due to the server and its need to maintenance. Users also have to pay higher fees for doing trades. On the other hand, by decentralized system users can easily implement their transactions via very low fee. Speed: Currently, centralized exchanges are offering higher speed of transactions and new decentralized exchanges are in competition to outperform the centralized systems in speed. Privacy: Using centralized exchanges, privacy is compromised and the possibility of identity theft will increase because you are required to disclose sensitive information such as home address, national code and etc. On the other hand, since the transactions of the decentralized exchanges are quite anonymous, your privacy can be strictly protected.