Cryptocurrencies which are otherwise known as decentralized currencies, can be traded between individuals from anywhere across the globe. What makes them special is the fact that there is no single country of which the currency belongs to. Cryptocurrencies are everywhere but at the same time they are nowhere. Arguably it is this aspect that makes cryptocurrencies such a novelty “asset”.
Understanding the technology behind crypto is critical to making smarter investment decisions. Become a blockchain ninja today!
This Changes Everything
Binance, Crypto.com, Coinbase, are among just a few of the exchanges that aim to centralize investments made by cryptocurrency investors. In other words, these exchanges aim to contradict the exact purpose of cryptocurrencies. They allow individuals to invest in cryptocurrencies, but these platforms also hold the cryptocurrencies people buy. To make matters worse these exchanges have crashed when large quantities of investors attempt to sell at the same time.
Centralized Exchanges
An all-in-one solution for crypto investors are centralized exchanges. However the problem with these exchanges is that you are holding these currencies in a wallet owned by the exchange. This allows the exchange to directly manipulate large portions of a market. All of the power is centralized, and delegated to the exchange. Rather than an individual holding the crypto in their own wallet, with full control over their own cryptocurrency holdings.
Why Does it Matter?
Cryptocurrencies are just beginning to become mainstream, which means the entire field has a fragile reputation. Centralized exchanges have a high potential to disrupt the adoption of cryptocurrencies by the masses. To make matters even worse, centralized exchanges are widely being accepted as the norm for anyone interested in purchasing cryptocurrencies. Many people are unaware of how the technology truly works, causing cryptocurrency to trap them in the exact same ways as traditional Fiat money.
The Problem
Acquiring cryptocurrency through centralized exchanges is depriving individuals of the power that crypto was designed to give its holders. Nobody can control the cryptocurrency that an individual decides to hold in their own wallet. Rather than a wallet provided by a cryptocurrency exchange, which is controlled by the exchange. This is exactly what people should do if they are serious about keeping their cryptocurrency investments safe.
The Solution
Individuals should consider opening their own cryptocurrency wallets that aren’t associated with any large exchanges. This will allow the most power for the wallet owner.
One More Thing
If you enjoyed this article, please consider following me on Twitter: @natexlee.
