According to “Webster’s 1828 Dictionary”, an exchange is an exchange of one thing for another, trading things of comparable worth or value.
For example, a typical currency exchange would trade things such as United States dollars for, perhaps, Canadian dollars or Japanese yen.
A Cryptocurrency Exchange is a platform or system that operates based on trading cryptocurrencies for other assets. Like traditional financial exchanges, cryptocurrency exchange’s principal operation allows for the buying and selling of digital assets and different levels of trading.
A DCE, or digital currency exchange, is what a cryptocurrency exchange platform is called.
There are five types of DCE’s.
Decentralized: All currency held by owners; Operations are taken care of on the blockchain.
Centralized: Very easy to use, and there is more liquidity.
Broker: A centralized exchange that adheres to local regulations.
Instant: An application for token exchange quickly.
Hybrid: A mix of security and ease of the centralized.
You can assume that since a Hybrid is listed as a DCE, it also follows that other combinations to compete are also out there. It is usually a centralized on-premises server. There are also hybrid cloud servers.
So what are the fundamental differences between traditional currency exchanges and cryptocurrency exchanges? First of all, Cryptocurrencies are unstable at this point. Bitcoin, as an example, has changed dramatically in a short time due to disruptive events. Also, many exchange platforms have gone under due to fraud, theft, or other problems. The volatility of cryptocurrencies makes them so profitable and risky. However, many things about the traditional exchanges and cryptocurrency exchanges are similar such as; a buyer and seller can make limit orders or market orders. The brokering of cryptocurrency works just like it would for any other kind of asset.
Protections from fraud, theft, and other possible problems are built into cryptocurrency exchanges for user security. While these exchanges are the key to liquid use of cryptocurrency assets
In the traditional currency exchanges, the overall risk is regulated, to a high degree, but not completely. In cryptocurrency, you are on the front lines of the exchange. In the traditional currencies, you may be several go-betweens away from the actual exchange front lines and thus giving a portion of your profits away as unnecessary fees several levels. So both types of exchanges will charge fees, but it is a historical fact of old-aged tradition that the farther you are from the front lines, the more you lose to those collecting their part.
Learning to work on and with decentralized exchanges is the best and far most profitable financial move anyone could ever make. With a decentralized exchange, you own your asset.
This is why Compumatrix is decentralized, and Bitshares follows as a Decentralized Exchange. It is our company, our business, and our family and no one else’s. Thus, we decide what is best!
All of those who are a part of Compumatrix, should be proud of what has been accomplished, and realize that there is no other company in existence that has what we have! Now, I expect many will try to copy our example, and we should see this as flattery.