CEXs, by name, ignore a fundamental aspect of Bitcoin decentralization. One problem with CEXs: they are much easier to hack than decentralized exchanges, and many new coins are only listed on new and unproven CEXs often leaving emerging cryptos more vulnerable. We have seen the failings of CEXs (which operate uninsured and unregulated) in various cryptocurrency exchange hacks over the years, most famously when Mt. Gox lost ~850,000 BTC, and they continue to occur too frequently.
An alternative to CEXs are decentralized exchanges (DEXs) which, much like Bitcoin, use peer-to-peer technology. With a DEX, users resume total control of their funds and have the security of trading directly from their own wallets with on-chain settlement and dont rely on any central authoritys supervision. Transactions can be executed on smart contracts and atomic swaps using what is known as Hashed TimeLock Contracts (HTLCs). DEXs are less vulnerable to attacks, but still in their infancy. Many are not as user-friendly, offer less functionality, and lack the liquidity offered by CEXs.
Traders who want everything cryptocurrency has been touted to offer including liquidity, low-latency and security, dont really have many options. The best solution is an exchange platform that combines a decentralized trustless cross-chain fair exchange settlement with the technology of a centralized custodial exchange. This allows decentralized options if users feel like settling a transaction without the supervision of a third party (eliminating counterparty risk), but also the efficiency of a low-latency, fully-featured centralized exchange when they need quick and liquid trading for exchanging large volumes. Many people are ready to move away from CEXs and DEXs to a platform that can meet all their needs. Blockchain.io looks poised to offer users the best option available for any scenario, and it will all be available at a single exchange.
CEXs and DEXs have their strengths, but neither is able to give traders everything they need. A credible cryptocurrency exchange needs to be accessible, efficient and functional; it must encourage trade while ensuring trust. Blockchain.io, a centralized exchange with a decentralized settlement, aims to do just that and I look forward to trying it out.