Why don't you get off the centralized exchanges, and ride the non-kyc P2P?
450 sats \ 1 comment \ @lightwalker 16 Oct 2023 bitcoin
Bitcoin: a P2P global money. I think it's would be wise to use P2P exchanges for the P2P money.
TL;DR
Centralized Bitcoin exchanges act as an intermediary between a buyer and a seller and make money through commissions and transaction fees. You can imagine a Centralized exchange to be similar to a stock exchange but for bitcoins.
Much like stock trading websites or apps, these exchanges allow Bitcoin investors to buy and sell bitcoins at the prevailing price, called spot, or to leave orders that get executed when the asset gets to the investor’s desired price target, called limit orders.
Centralized exchanges operate using an order book system, which means that buy and sell orders are listed and sorted by the intended buy or sell price. The matching engine of the exchange then matches buyers and sellers based on the best executable price given the desired lot size.
Disadvantages of Centralized Exchanges
  1. Hacking risk Centralized exchanges are operated by companies that are responsible for the holdings of their customers. Large exchanges usually hold billions of dollars worth of bitcoin, making them a target for hackers and theft. An example of such an incident is Mt.Gox, which was once the world’s largest Bitcoin exchange company before it reported the theft of 850,000 bitcoins, leading to its collapse.
  2. Transaction fees Unlike peer-to-peer transactions, centralized exchanges often charge high transaction fees for their services and convenience, which can be especially high when trading in large amounts.
  3. Custody of bitcoins and risk of fraud Lastly and most importantly, most Centralized exchanges will hold your bitcoins as a custodian in their own Bitcoin wallet rather than allow you to store your private keys on your own wallet. While more convenient when you want to trade, there are drawbacks, namely the risk of the centralized exchange failing and fraud. Recent example include the bankruptcies of hedge fund Three Arrows Capital, lender Celsius Network, broker Voyager Digital and the sudden collapse of FTX and Alameda Research.
Why do you still cling to the centralized exchanges, which are a bunch of sinking ships?
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0 sats \ 0 replies \ @ek 17 Oct 2023
Why do you still cling to the centralized exchanges, which are a bunch of sinking ships?
For me, it's mostly just this:
  • higher liquidity means faster buying (and selling but we don't sell bitcoin here, do we)
  • usually cheaper prices than p2p markets
  • better UX since I don't have to search through orders or hold funds in escrow or do a bank transfer for every tx or even meet someone in person if I want to go full p2p cash only. As a buyer, I can just use market orders. Maybe I'm ignorant since I only used RoboSats (I also tried Bisq but I didn't like it), but I think P2P exchanges don't have market orders.
  • afraid of scams / dealing with scams
  • my bank might not like it and I definitely don't want to deal with a closed bank account
which are a bunch of sinking ships?
Why do you think that? I think CEX will continue to exist for a very long time at least. Whole tradfi works with CEX.
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