Centralized Exchanges Have Been Very Harmful ... OpenLedger to the Rescue!
As everyone has heard by now, all who pay attention to such things - another exchange has been hacked - or rather, another exchange has been hacked, again, its fate currently indeterminable. Strangely, the same thing occurred at Bitfinex earlier this year when Bitcoin was on the verge of the reward-halving back in June of this year. Nothing makes an investor/speculator lose confidence faster than not knowing if they will ever see their investment again.
The crypto-world has seen this time and again, the worst of which was Mt. Gox, which almost ended the revolution before it began. We have seen it again with Cryptsy when $5 MILLION dollars of customer funds were "lost" due supposedly to hackers.
Oh, but the list of exchanges, and other related-crypto-currency services, does not end there ... (source: The Guardian's List of Bitcoin Hacks
Allinvain
Bitcoin Savings and Trust
Bitcoinica
BitFloor
Inputs.io
BIPS
Shapeshift
Picostocks
Cointerra
Bitstamp
Flexcoin, Poloniex, Bitcurex & Canadian Bitcoins
What is the Solution!?
... De-centralization of Course!
After reading the post Bridging the Gap with STEEM from @clains and @spectral , my eyes were made WIDE OPEN! p.s. @clains and his org is an amazement .. to have contributed so much at such a young age, is really super-cool!
Enter OpenLedger!
I fired up OpenLedger immediately .. bought some Bitshares, moved them in seamlessly, and began to mess around. This truly is the answer to the above problem, and the key to building real confidence in crypto. Our entire message is based upon decentralization, why should not our exchanges and trading platforms be made of the same stuff!? It is truly exciting to see how smooth, fast, and versatile this plaform is .. I will strive to do all my exchanges on it from now on.
Thank you Bitshares ... bitSpace .. and STEEM! This is the future!
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I upvoted You
Bitshares' OpenLedger is decentralized exchange on the same blockchain of pegged assets. This is not equivalent to decentralized exchange of the actual assets between blockchains. For one reason in that pegged assets don't precisely track the price moves of the asset and they don't give you diversification of holding the assets (e.g. diversifying blockchains). Not to mention that OpenLedger is not popular and thus has insufficient volume. The latter has been impossible to implement because of a jamming vulnerability, but I have recently privately proposed a solution.
Yes, look at the volume. Every time I look Openledger has < 1% of STEEM volume. After months of promotion via STEEM. It's clear that there is a fundamental liquidity problem with decentralized exchanges. But no one wants to talk about it... and pretend it doesn't exist.
@smooth has pointed out that OpenLedger may not even provide complete risk avoidance:
"Everything that can de descentralized, will be descentalized"
Crypto exchanges are are great example of this need.
Bitsquares is another project developing in this direction.
If OpenLedger had more volume in some of the more popular pairs, it would be a dream come true. Like it regardless. Moar volume!
Thanks for the feedback .. much appreciated!
Yes, that would be great ... STEEM users are really the biggest hope for this - hopefully there will be more promotion of Bitshares and OpenLedger here, and of course that they add more features for us.
Cheers
As each exchange gets hacked my thought process is not if but when will be the next. Having traditional exchanges where people are the true back-end does not seem like the answer for Bitcoin and cryptocoins in general
To be fair I have not given Bitshares, etc a fair shake and can't give an intelligent review of it but it seems that for Bitcoin and all crypto to move forward the only way for it to really work is for decentralized trustless exchanges to handle the transactions. They are the only incorruptible solution because as we have seen, traditional crypto exchanges so far have a miserable track record.
Decentralization will be critical in the future. Thanks for the helpful post! Maybe this would also interest you since you are interested in decentralization Decentralized Steemit Marketplace
Wow .. very interesting and would be very helpful indeed. Decentralizing something like this would make it unnecessary for massive data-warehousing and support staff etc., and would result in very small fees relative to eBay etc., which should drive adoption ... it would big a big boost to STEEM price that is for sure. If people used Bitshares and OpenLedger to move the $ around, that would make this a very powerful trio of services. Woo! Love it!
Yes! I am very excited about the potential untapped power both platforms have to revolutionize the online shopping marketplace for buyers and sellers
How can you decentralize exchanges when fiat is centralized?
Well, that is the thing with the entire crypto universe, isn't it? FIAT I/O remains the tether to the old world. :-) The hope of course is that one day, we won't have to do so, that we can meet all our needs in the crypto of our choice, seemlessly.
what is the difference? Openledgers Bitcoin Wallets could also get hacked. They do not minimize the 3rd party risk, because there is no database you can hack and get access to the userbase wallets, but most hacks are insider jobs see MT.Gox and Shapeshift, so Openledger has the same weakness.
OpenLedger does not have control over your funds!
It's decentralized, you are responsible to protect your own wallet and funds.
as long as you hold their UIAs they could lose your funds. What you are saying is not true. You should check again, your information.
Of course you are in control of your funds at anytime. If you converted btc to bitBTC or open.btc you're always in control of that Smartcoin or UIA, were in a centralized Exchange you're not. The backing of Smartcoins/UIAs is another story, but your property on the BitShares chain is secure no matter if it has intrinsic value or not. Got that? Don't mix asset collateral and ownership, thank you.
You can trade smartcoins directly which are free of that problem. The volume could be better thou. Hopefully such posts will help to address this.
On BTS:CNY (decentralized smartcoin pair) the volume seems to be rising with each day. I hope it will continue to do so.
You can see the volumes on this beautiful explorer: https://cryptofresh.com/assets
You can use openledger as a bridge onto the bitshares decentralized exchange - you could trade your open.btc for bitBTC (smartcoin) and you'd be even more secure.
Bitcoin Wallets could also get hacked
It's decentralized, you are responsible to protect your own wallet and funds
Hopefully, the Bitfinex debacle will be the one that will kickstart the era of decentralised exchanges.
You can't stop an inside job.