Moving to DEX
With the news that the Dept of Extortion & Making Things Suck is going to be trying to pry into our crypto business (you know, for the children), I decided I would start moving to Decentralized Exchanges (DEX) to trade my crypto. More than that, centralized exchanges are popular targets for hacking, DDos attacks and run-aways.
There is also the reality that centralized exchanges are fundamentally opposed to the reasons we value decentralized crypto-assets in the first place.
There are not a lot of choices in the space as of yet. Most of the choices we do have are new, in beta or not even released yet. There are more decentralized exchanges than the ones I am listing here, but these are what I see as the best we have. I would love to see more and I really would like to see these get more action than they seem to be getting.
I think the convenience of centralized exchanges and of course the lack of time tested decentralized exchanges is keeping people from building deeper markets in the decentralized exchanges.
- OpenLedger: Built on Bitshares. This is the one I am starting with. It is easy to get started with and there is no Know Your Customer (KYC). Future plans include Atomic Swaps. The volume is not very great, at least in the assets, such as SBD and Steem that I am trading in.
- Waves: Features decentralized trading with a centralized matching service, which adds liquidity.
- CryptoBridge: Also built on Bitshares. As best I can tell, this is very similar to OpenLedger. The interface even looks very similar.
- BarterDEX: This is a very interesting project which is not yet launched for the general public. BarterDEX uses Atomic Swaps and Electrum servers which in a nutshell means additional liquidity features and very fast trades which do not require downloading blockchains.
OpenLedger and CryptoBridge are built on Graphene which allows for huge transaction volumes. I have seen estimates of up to 100,000 per second.
Have you tried any of these? Am I missing any noteworthy decentralized exchanges?
Have you check out the BitShares DEX itself as well? I've never tried OpenLedger but I wonder which one is more user friendly. Also, thanks for mentioning the other two. I'll have to check those out :)
I have accounts on both BitShares and Waves, but I haven't traded on either yet. The thing that puts me off is that you don't actually trade the assets you have, but you trade another version of them. So you don't trade BTC for USD, but bitBTC for bitUSD. I don't really get that. So let's say you deposit BTC to your account, and all of a sudden you have this bitBTC? How does that work?
(sorry if these are stupid questions, I'm a total tech noob)
There are two options. On BitShares, there are for example OPEN.BTC. This means you send you BTC to some more or less trusted party (called OPEN in this case) that stores them and gives you an OPEN.BTC token. Essentially this is like a gold backed dollar. Your OPEN.BTC represents the right to access your BTC if requested. I am not sure these services can be trusted 100% but certainly better than traditional exchange.
BitBTC are fundamentally different. They are a smartcoin. In order to create one you dont need to have a real BTC in the first place. Instead you lock some Bitshares in a smart contract that secures the value of the BitBTC to the BTC value. In case that the price of BTC goes up more than the backed amount and there is no user wanting to issue new BitBTC, then you get paid out the full collateral.
This will be enough to at that moment buy you a real BTC.
These smart coins are 100% decentralised and safe. In my opinion stay away from services such as OPEN.BTC and trade BitBTC instead. I know the underlying math may seem confusing but I examined all the cases and have not found a flaw unless bitshares value crashes abruptly against all other cryptos.
Note that currently one BitBTC is worth more than a BTC! The value is only backed to the lower side (comparable to SBD). It reflects that a BitBTC is actually better than a BTC as it can be traded and send fast and secure. Both features currently missing in BTC.
Thanks for the explanation! That clarifies a lot.
Thank you for the input. I suspect that when Atomic Swaps come online, we will move to that tech and not have to worry about this. It looks like at least OpenLedger is already planning on that.
These are truly interesting times!
I haven't tried the Bitshares DEX. It never came up in my searches. OpenLedger seems friendly, just not enough volume. I'm definitely curious about Waves.
I wasn't sure about the interim units either. I'm not sure why that is necessary other than that is what Atomic Swaps are for. In OpenLedger, it is open.btc, etc. I started by just trading a bit and it seems to go smoothly, so I have been increasing my volume. Everything I can find suggests that all is going well.
If you trade on Poloniex, I know that is not real coin either. They convert when you withdraw.
this is a very important issue, especially with news of polynex recently getting purchased by goldmann sachs
thanks for all the support recently its been a huge help!
Resteemed!
Yeah, it's a shame that that happened because I really enjoyed their platform. Oh well. Time to move on.
I am happy to be able to help in any way. Your work is important to me. Independent journalists are critical to our success.
Keep the Steem on!
i really fear these centralized exchanges now its better to move on to these exchanges
The more people, the better because there is not enough volume.
we all need to move some day for sure you did it right time for me to move too thanks for sharing but they have everything available ?
Certainly now is the time. If people would move to DEX, I'm betting there would be more competition.
Volume is low and there are not the array of assets like the centralized exchanges have at this time. That's why I hope people move over to them, so there is a reason to bring more choices.
I have tried Bitshares itself, but volume was low and the lack of charting turned me a bit off for the time. I expect we'll see several of the decentralized exchanges growing large and solid the next couple of years.
Mostly using Hitbtc and some coins at Cryptopia, they are both centralized but no kyc/aml.
Interesting. I haven't tried those.
I am very satisfied with Hitbtc, good volume and many tokens come there first. Also nice people at support, they solved a missing deposit for me in a day recently. Had one in december taking weeks but then it was so stuffed with new customers that the site broke down each day before they upgraded servers.
I'd be happy if you used my reflink, I posted it in https://steemit.com/exchange/@thedolphin/nice-new-function-at-hitbtc-exchange today :)
The more the government starts prying, the more we are going to see exactly what you are doing.
Over the next couple years, I would not be surprised to see many things shifted to decentralized exchanges.
We need to spread the benefits of decentralization to all who will listen. Everything needs to be on the blockchain...this is the wave of the future.
Open source and decentralize all the things. I think it is inevitable now.
i don't know you use bittrex or not do you think its good as they recently changed the TOS or we should move to the decentralised ones
I only used Polonies lately. Quite a while ago I used a couple of others that have since gone down in flames, so to speak. I hope to be completely done with them now.
Thank you for this list of decentralized exchanges. After coinbase folded under govt pressure and the shit with Poloniex, this is going to be such a crucial move!
It looks like this is a subject we should keep revisiting. I expect a lot of movement toward DEX in the coming months and years. BarterDEX, in particular, is built with safety and privacy in mind. I really want to try that one.
It is always nice to see you on here. Speaking of decentralized, I hope we can move the whole bunch of us over here and get off that other junk for good.
I use openledger for small stuff, not big trading. I still have some funds on coinbase lol I'm behind
I use coinbase regularly for business. I offer a 10% discount to my clients if they pay in bitcoin. I just hold it, so it works for everyone. I generally lead them to use coinbase because the exchange rate is so low.
We should have had this long back. Decentralized exchanges for a decentralized coin :)
I'm guessing it is a bit of a hard nut to crack without a huge payoff. Things seem to just now be coming online. Lets hope for the best!