Within the crypto-money market, Exchanges have an important weight and the evolution from centralized to decentralized can affect the entire ecosystem. The sign of this evolution can be seen with the Chinese Exchange Binance and the recent acquisition by the latter of Trust Wallet, a Wallet that operates completely decentralized.
This evolution responds to the need to have more secure Exchanges because the exchange houses that operate centrally are more sensitive to hacker attacks in their database and with it the information of the private keys of the Wallets.
Decentralized Exchanges allow users to have their own private keys. Since private keys are not concentrated in one place, hacker attacks are prevented from succeeding.
True Blockchain in Exchanges
With Blockchain technology it is possible to perform exchange operations in a safe, transparent and auditable manner. Furthermore, by applying Blockchain technology it is possible to have an open access for all people without the need of an intermediary third party that may be vulnerable or unsafe.
The ability to connect thousands of users, coordinate them and allow transactions to take place between them makes Exchanges work better for ICO offerings and other financial products. The reality is that there are many offerings that can provide for users since decentralization can accomplish great things.
Private Blockchain for Exchanges
The Exchanges are evaluating to participate in Blockchain network that is private, this way all its participants are recognized and verified inside the system. Choosing a public network has its risks since in a public Blockchain everybody can write or check the data and obviously this would not be wanted in an Exchange.
With a private Blockchain network the data of all registered users can be maintained and with this security is maintained without the need for a single central authority. These features in an Exchange make it very attractive for the execution of operations and transactions.
Future of Exchanges
Although there is still a long way to go to develop, it is obvious that the future of the Exchange Houses will be directly linked to Blockchain technology and its decentralization. We will still have to see how the Exchanges adapt to decentralization and manage to move their centralized structures to models that take full advantage of Blockchain technology.
The positive thing about this advance is that we will have more secure, transparent and auditable sites, very important elements for the strengthening of the general market of active crypto.