Re: Why are centralized exchanges still dominating the crypto space?
Ever since Bitcoin launched back in 2009, the rise of centralized exchanges has been inevitable. A few years later, and now the whole crypto market is dominated by centralized exchanges. While there have been many alternatives to the solution (such as decentralized exchanges), people are still performing trades at centralized entities.
Now the real question is why this is happening, since after all, Satoshi intended Bitcoin to be free from middleman or third parties? Depending on an exchange or custodian, greatly defeats the purpose of true decentralization. Knowing how oppressive some governments are, it'll be easier for them to stop usage of crypto whenever they want to by just targeting centralized exchanges.
Nonetheless, what are your thoughts about this?
In fact i see a few reasonsNow the real question is why this is happening, since after all, Satoshi intended Bitcoin to be free from middleman or third parties? Depending on an exchange or custodian, greatly defeats the purpose of true decentralization. Knowing how oppressive some governments are, it'll be easier for them to stop usage of crypto whenever they want to by just targeting centralized exchanges.
Nonetheless, what are your thoughts about this?
People know little about decentralized exchangers. So their popularity is not high. The main disadvantages are volume and speed of exchanges.
With centralized exchangers everything is the opposite. In addition their number is growing and they are everywhere. Financial groups want to make money and the sooner they do it better for them. People who have influence will always put their conditions on any market. That is why centralized exchangers are filled with volumes and price.
It just is directly related to human behavior. You probably know about the Pareto rule (80/20)? When people are guided by emotions they relate to more people who are easy to manipulate.