The constant debate as to whether decentralized exchanges are the future of crypto and centralized exchanges having seen their time past continues to rumble on. This article discusses some of the problems found in today's centralized exchanges.

BitMax is a new community based decentralized autonomous system, with the objective of encouraging crypto users from migrating over currently centralized exchanges to their new innovative and forward-thinking decentralized exchange. Backed by a tremendously experienced team, BitMax tackles the fundamental flaws with existing centralized options directly, aiming for the most efficient and widely adopted decentralized exchange currently found today.

Vitalik Buterin famously said that decentralized exchanges should ‘burn in hell.’ While Binance CEO Changpeng Zhao has actively disclosed Binance’s development of their own decentralized exchange. However, with the top ten centralized exchanges accounting for over $5 billion daily in volume, the scale of the task ahead cannot be understated. But regardless of the challenge, BitMax’s emphasis on a community-driven initiative combined with transparency at the forefront enables the project to have strong foundations for a major upsetting of existing centralized monopolies.

Currently centralized exchanges are fraught with major disadvantages, these include:

➳Data Hacks ⛔

For cryptocurrency only exchanges such as Binance and Okex, KYC and AML requirements are notably less stringent when compared against cryptocurrency fiat exchanges. Regardless, if users would like to withdraw large amounts of funds or in some cases just withdraw their funds; they would need to be KYC and AML compliant. Due to the single point of entry, many of these centralized exchanges are vulnerable to hacking attempts and data thefts; this is further emphasized if exchanges store sensitive personal information such as banking documents, passport copies, social security numbers and more. This vulnerability is further exemplified by the many hacks already to have taken place within these exchanges.

➳High Trading Fees ⬆️

The vast majority of popular centralized exchanges charge anywhere between 0.25 to 5% in fees, this can be a hindrance, especially when executing high volume trades. On a withdrawal of $10,000 of Bitcoin, the user may be required to pay in some cases, $500 in just fees. This can be very frustrating and over time accumulate to a substantial amount lost in just fees.

➳Trust 🙏🏻

The first cryptocurrency and blockchain based service was Bitcoin. It was designed originally by Satoshi Nakamoto to be a trustless currency developed to avoid third parties such as banks and centralized exchanges, or any medium that requires trust from customers for operational ability. But centralized exchanges are vehemently in disagreement with this ethos. Without trust, centralized exchanges wouldn’t be able to appropriately function and with the reliance on their services by the wider crypto community, many essential activities like trading would suffice to exist on a convenient scale. This importance on third parties was never envisioned by Satoshi.

➳High Listing Fees 💨

One of the most controversial aspects of centralized exchanges is the increasingly exorbitant listing fees they are charging. Many of them are charging anywhere from $50,000 to upwards of even $3 million plus. A $1 million listing is higher than the cost to list on most stock exchanges; the high fees emblematic of the power centralized exchanges currently hold in the crypto markets, as being able to access larger markets and increased liquidity could make or break for many projects. The promise of liquidity-which many investors regard as the key to a successful project- places the power in the hands of the liquidity providers: the centralized exchanges.

Decentralized exchanges, more specifically BitMax will be a household name because they will the focal point of interest for crypto to thrive against future bans and regulations. Due to the major issues with existing centralized systems and the development of various decentralized exchanges, innovators within the crypto world have realized that for mass adoption of cryptocurrencies, peer to peer censorship resistant decentralized exchanges will be needed in the market.

Disclaimer: Please only take this information as my OWN opinion and should not be regarded as financial advise in any situation. Please remember to DYOR before making any decisions 🤓

♂️ Hi, my name’s Sal.
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