As I'm sure you all know full well, early adoption of crypto is primarily speculative trading, so this post is gonna focus mainly on the problems with trading in this space right now (centralized exchanges, regulations, lack of investment products, etc), and how we can shift our mindsets as a community to put our money where our mouth is and rally behind startups doing the right things (decentralized exchanges, dApps, protocols and necessary infrastructure).
Why? Because for the first time in history we have a disruptive new technology that can really change the landscape in every industry imaginable, and we are at the stage where we're planting the seeds of these new products and companies, so why not support the right ones so we can realize the future we're all envisioning?
I recently wrote an article on this on Hackernoon here: https://hackernoon.com/its-time-to-address-the-massive-problems-of-centralized-exchanges-ac2cfb66bef8
, but I thought I'd expand on it and share my thoughts on how to move this space forward in terms of getting more dApp adoption and usage.
Who uses dApps anyways?
Blockgeeks just published a report on dApp usage for those interested, there is definitely some growth but since the bear market it has definitely tapered off: https://blockgeeks.com/guides/report-dapps-november-2018/
It's obviously nowhere near mainstream adoption, but it's a great start, so there's hope! There's definitely a ton of things that should immediately be addressed and are of high importance IMO, so I'm going to lay them out:
First, we need to address the massive problems of centralized exchanges
Bitcoin aside, the crypto space as a whole is still pretty young, the current experience of trading crypto assets is understandably a fragmented experience with scattered pockets of liquidity, and a highly technical and high friction process. But the irony is that we have the technology to avoid the security flaws that plague centralized exchanges and the adoption of crypto - decentralized trading.
There are a ton of centralized exchanges available to the public today, but a much smaller subset of these exchanges are properly regulated, not to mention trustworthy and reliable. I know the pro traders out there might say, "Well DEXes aren't fast enough, or I can't run bots on them yet". That's fair, but if you want to see them succeed some day, every trade helps. If it's a trade that you think is executable on a DEX, do it there instead of on a centralized one. That's how adoption happens, one user at a time.
While industry pioneers like Coinbase have pushed the space forward and newer entrants like Binance raised the bar for the alt-coin trading experience, the industry still suffers from constant hacks and malicious acts.
We need to stop relying on centralized trading/hot wallets as they are huge security risks As far as we know, over $1 billion worth of crypto assets have been hacked & stolen from centralized exchanges in 2018 alone
Here's the biggest incidents in 2018:
The root cause of this is that centralized wallets are increasingly large honeypots.
- $500 million worth of NEM stolen from Coincheck — The 2nd largest exchange in Japan
- $195 million hacked from BitGrail — Italian exchange and the first to list Nano (I myself was a victim of this)
- $45 million hacked from Binance — One of the largest global exchanges
- $40 million stolen in Coinrail hack — A boutique exchange in South Korea
- $60 million hacked from Zaif — Exchange in Japan
The nature of a centralized exchange dictates that some trusted third party is storing the crypto assets of its users to create a pool of liquidity, this being done mostly by aggregating funds into exchange-owned digital wallets where assets from users are pooled into.
Millions of people could lose not just money but also their identity and data handed over to centralized exchanges as well.
While we're still in a bear market this may not happen as frequent, but it's reasonable to be expect that in the next bull-run the frequency and severity of attacks will only rise and a scenario in which an attack as widespread as the recent 50 million user Facebook hack — where both private data and money were stolen — could happen. There's already plenty of exchanges that are careless with handling user identity, handing over your personal ID is not a trivial matter and exchanges should follow the best practices to store and secure them if they're asking for them.
Second, we need clearer, more sensible regulation that fosters innovation and protects investors
This may be an unpopular opinion around these parts, but sensible regulation is good for both the industry and users, to ensure exchanges coming online meet certain requirements, so we're not operating and trading in this wild wild west of shady exchanges.
People who trade today need to have a pretty damn high appetite and tolerance for risk, not to mention an acute ability to discern legitimate investments from the rampant exit scams and phishing attacks. (Just see yesterday's thread about the guy's dad who bought into Onecoin on the advice of a "friend").
The vague stance on the part of governments also means many crypto startups operate in a regulatory grey area (I have first hand experience with this working in the space). The SEC only recently clarified that they view Bitcoin and Ethereum as not a security token, meaning it wouldn’t be subject to existing securities laws.
IMO the current lack of regulatory clarity has lead to a low barrier of entry for operating crypto exchanges, however this is starting to change as seen with the recent EtherDelta SEC charges, they're clearly making a statement now that you need to follow the laws when you open an exchange.
But we can do better, and push lawmakers to create more defined rules that we need to play by, and at the same time educate them so they understand not just the technology, but the implications and potential use cases and how we can get there while allowing companies to innovate, new startups to rise, all while protecting consumers. That way we'll have more legal clarity as the industry matures that is business friendly.
Third, we need a more diversified set of investment products/options for crypto. More wealth generated = more growth and adoption
Up until recently, you were only able to purchase tokens on their own from an exchange. Today, we are starting to see an emergence of basic index funds such as the new Coinbase Bundle and Bitwise. It wasn’t until late 2017 that we saw the introduction of Bitcoin Futures from CBOE and CME.
We expect new companies to continue entering this arena, especially crypto ETFs (ie: Bakkt in Jan 2019 maybe?), as well as other attempts at index funds or derivatives.
There's a bunch of teams doing great stuff:
- Bitwise - They're one of the first crypto index funds
- Hodlbot - Another index fund
- Shrimpy - A way to automatically invest and rebalance your portfolio
- LakeProject - Working on AI driven investments that automatically build a portfolio for anyone (R&D phase)
Lastly, we need to punish greed and reward companies doing the right things
While it’s not a problem particularly limited to centralized exchanges, it’s been reported that listing a token can cost as much as $3 million. In contrast, listing a stock on NASDAQ costs $125k to $300k plus annual maintenance fees.
This is just one example of the greed exhibited by those who have leverage and the middlemen who stand to profit in between (consultants, brokers, ICO firms, etc). These high fees dampen innovation as they’re too great of a cost to bear for most token/ICO projects. This is crucial for most projects as they need liquidity to bootstrap their network and to remain favourable with the community that invested in them. At least 7 of the top 10 exchanges engaging in excessive wash trading from 12x to over 100x their true volume. Foul play
Plenty of centralized exchanges have been suspected and accused of wash trading (creating fake volume), insider trading, and price manipulation. High user trading fees
As centralized exchanges carry more risk, and have more opaque control of their platform, they often charge higher fees compared to a decentralized exchange. Withdrawal limits
Centralized exchanges impose a withdrawal limit, as a security measure to limit the amount that can be withdrawn at once. However, there’s also a misalignment of incentives, as they stand to benefit when you keep your funds locked on their platform so they can maximize trading fees
There's a bunch of great projects and base layer infrastructure that people should look into and support, not just the protocols but also startups building on top of them, some of my fav protocols include:
- 0x Project - Powering decentralized exchanges for tokens, NFTs, etc
- Set protocol - These guys are building a protocol to allow anyone to easily bundle any assets to create more sophisticated investment products
- dYdX Protocol - This allows anyone to integrate margin trading and derivatives in their dApp
- Dharma protocol - This protocol facilitates lending in a decentralized way
- Compound protocol - A money market protocol that allows hodlers to earn interest on their tokens
- Cosmos Network - Working on blockchain interoperability and tooling around Ethereum and Web3
Personally I'm working in one of the many, many startups in the space trying to build on top of these decentralized infrastructures to give everyone a more seamless experience to access, trade, and use crypto. But you can imagine how hard it is to gain any traction much less build a sustainable business especially in a bear market like this, and when everyone has either completely lost their motivation or still flocking to centralized exchanges to chase pumps knowing full well the risks and unethical practices. Cool story, what are you doing about it?
I work with a team called the LakeProject, and we're a group of people that came together because we believe that decentralized platforms will address a lot of these concerns, so we're putting our money where our mouth is and building them. If you want to help or learn more about what we're doing here's our site: http://lakeproject.co
. We also built our first decentralized product here which is a trading platform built on 0x: https://trade.lakeproject.co
In conclusion - Vote with your money and your time, it makes a difference
I hope this post made sense and I made somewhat of a decent case (?) on why we need to shift our mindset from simply trading and hodling to proactively choosing where to participate, what dApps to use, and which startups to support.
IMHO this is key for adoption and it will seriously help startups (like ours) to grow and be able to make a difference in the industry and push forward and pioneer a new paradigm of operating a decentralized business. I think everyone in the space right now is still learning and trying to understand how that might look in the future, but the more support and usage we get, the sooner we'll learn and the brighter our future will be.
If you've gotten this far, thanks for putting up with my clickbaity title and reading this thread :)
The world's largest digital asset exchange Binance is rolling out its long-awaited Binance Card in Europe and the United Kingdom (UK) which will allow clients to convert and spend and convert cryptocurrencies to fiat at over 60 million merchants across 200 regions and territories worldwide. “By providing a tangible way to transact, convert and spend crypto for everyday use, we are furthering ... This reservoir is not only the largest artificial lake in Ghana but also the largest inland lake. The flora and fauna rich in species for West Africa is a feast for the eyes and also of great economic importance. Thus the population of Ghana benefits from the constantly increasing tourism. As a result, more and more people can be employed and thus have the opportunity to rise socially. On the ... Binance Lacks of a National Exchange License . Binance is considered the largest cryptocurrency exchange by volume in the world. During its years of operation in the crypto space, it has made a vast progress. Apart from that, it is also among the cleanest exchanges, making it part of the market’s top 10 exchanges. In just a matter of three years, the exchange successfully became top ... The 7,000 bitcoin were withdrawn by hackers using a variety of techniques, "including phishing, viruses and other attacks", according to a post on Binance's website by chief executive officer Zhao ... Bitcoin ATMs In Salt Lake City. As of May 5th, 2020, there are a total of 33 Bitcoin ATMs located in Salt Lake City. See the full map here. Best Place To Buy Bitcoin In Salt Lake City. With over 30 million customers, Coinbase is the easiest and most preferred method for buying bitcoin in Salt Lake City. The verification process on Coinbase is ... Bitcoin Drops Over 4% After Japan Warns World's Largest Cryptocurrency Exchange . Binance allows its users to open digital accounts and process their purchases in digital currencies. Corporates ... One of the world’s largest cryptocurrency exchanges, Binance was hit by hackers. The hackers managed to steal $41 million worth of Bitcoins.. The hackers were able to withdraw as many as 7,000 Bitcoins in a single transaction. The hackers are suspected to have used a variety of techniques including phishing, viruses and other attacks to steal from Binance’s hot wallet (accounts for about 2 ... Firstly, visit binance.com and click the “Register” button to register an account. The fee for withdrawing BTC is currently 0.0004 BTC, which may change depending on how much traffic there currently is on the Bitcoin Network. Most bitcoin exchanges charge fees for using the platform. Bitcoin of America is another of the most popular digital currency online exchanges. Users can trade Bitcoin, Litecoin, and Dogecoin easily and with very low transaction fees. Bitcoin of America has a good track record for retaining secure transactions, as well as, friendly customer service 24/7. If you are looking to purchase digital currencies through a safe exchange with little to no ... This Week In Crypto is a weekly segment from the Live Coin Watch News team, providing readers with a fun, succinct, and pertinent summary of the most important Bitcoin-related events in the past week or two.. Bitcoin Holds $6,000s On the weekend, Bitcoin plunged lower, falling from the mid-$6,000s range to $5,800 over the course of a day, marking a loss of over 10%.
Best Crypto Exchange- ZERO FEES HACK ... How To Trade Bitcoin Cryptocurrency for Beginners - Duration: 7:48. Fred Yen 611,489 views. 7:48. 5 Altcoins That Could 100x 💯📈 - Duration: 17:31 ... These are the best crypto exchanges in my opinion. If you are agree then leave a comment. If you are agree then leave a comment. The best bitcoin buy and sell exchanges list CryptoRobert's quick and easy tutorial on how easy it is to send Bitcoin or Ethereum to Binance using GDAX. You read that correctly. ANYONE can use GDAX to quickly fund not just your Binance ... Find out how to set up the software Meta Trader 4 to trade cryptocurrencies like Bitcoin and Litecoin on the btc-e exchange. Binance Sign-up: https://www.binance.com/?ref=11298765 Binance Update & Beginners Tutorial 2020 (How to Trade Crypto on Binance). In this video, I take you... Since Binance is not going to be available in the US anymore after September 12th, here are some alternative exchanges to use.-----Get Brave ad-free browser: Binance vs Bittrex compared side-by-side to determine which exchange is best for trading cryptocurrency. After reviewing each exchange, there is a clear winner for buying and selling altcoins. Binance exchange tutorial: how to sell on binance. I sold all my binance coins for bitcoins. Register on binance: https://www.binance.com/register.html?ref=1... SUBSCRIBE if you enjoy these type of videos! Thanks for watching! Twitter: https://twitter.com/TheCryptoviser Join Coinbase & Get Free Bitcoin: https://www.c... I compare Binance vs Coinbase side-by-side to determine which exchange is the best platform for trading cryptocurrency. My answer may surprise you! I strateg...