The cryptocurrency boom kicked off with the introduction of Bitcoin in 2009. This new digital currency was not linked with any centralized power and enabled both anonymous and secure transaction execution by users. It was not long until the advent of other cryptocurrencies happened. Each targeted a niche industry or presented an advanced algorithm of consensus. However, cryptocurrencies, due to being digital resources, faced challenges in their exchange on existing physical networks. Therefore, it highlighted the prerequisite for advanced cryptocurrency exchange platform development.
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Cryptocurrency Exchange Platform
Cryptocurrency trades perform business in much the same manner as forex trading works. For instance, they enable trading of one currency for another, but mostly digital currencies. One can exchange Ether for Ripple, for example. It is similar to how the US Dollar is tradable for the Indian Rupee and conversely. Through levying a small fee on each sale, these sites maintain themselves. Later, based on the fundamental architecture they adopted, those cryptocurrency exchange innovations fell into two categories. The descriptions of those two are Centralized Exchanges (CEX) and Decentralized Exchanges (DEX).
CEX and DEX (Centralized Exchanges and Decentralized Exchanges)
As the name suggests, third-party providers that organize trades between buyers and sellers operate Centralized Exchanges. Decentralized exchanges, on the contrary, hold faithful to the ideals laid down by Satoshi Nakamoto and are thus not run by third parties.
While CEX exchanges enable fast transactions and provide options for high liquidity, DEX platforms are known for maintaining anonymity and being hack-proof. These two separate exchanges, meanwhile, met with their particular collection of challenges.
Not only did centralized markets charge transaction costs, but they also maintain full control over the assets of their clients. Also, CEXs hold the funds of their consumers on hot wallets that are reasonably simple to access. And it came as little surprise when CEXs were the most popular in all of the hack attacks in cryptocurrency history with Mt. Gox, BitFloor, and Poloniex, for instance.
Decentralized markets, on the other hand, face challenges due to handling trades at the speed of a snail. It proves unfavorable for consumers planning to exploit the market volatility of the cryptocurrency. Also, they do not enforce laws such as AML and KYC. It makes it a hotspot for malicious activities.
Hybrid Cryptocurrency Exchange Platform
The limitations of both exchanges, though, contributed to the creation of an upgraded, more specialized network known as the Hybrid Crypto Exchange Platform. The positive features of Centralized and Decentralized markets come in combination with this form of exchange.
Hybrid crypto exchanges (HEX = Hybrid Exchange) address the issues of centralized and decentralized exchanges. They mainly focus on the usability and liquidity of CEX platforms, as well as the anonymity and protection of DEX platforms.
Hybrid Crypto Exchange | Benefits
Provided real-time service access
Incorporates solutions based on blockchain technology
Users can trade on centralized as well as the decentralized crypto platform
Addresses challenges of centralized and decentralized crypto exchanges.
Even if third parties may regulate the exchanges of cryptocurrencies on a hybrid platform, users still have custody of their funds here.
Not only do hybrid crypto exchanges secure customer privacy, but they are also still compliant with different laws for digital currencies.
User assets are not held in hot wallets here. It suggests that funds are placed in cold storage altogether. That makes cyber-attacks on hybrid crypto exchanges challenging.
There are fast and transparent crypto transaction rates. That makes hybrid crypto exchanges for global crypto traders an enticing choice.
In hybrid crypto trading, the technology used is scalable. It helps in positioning it as a prospective digital currency exchange hub.
By introducing a hybrid platform using the finest cryptocurrency exchange creation services, one will receive more income.
Fraudulent practices and hacking become obsolete by incorporating top-notch security technologies. In the hybrid crypto exchange, users can conduct smooth and safe crypto trading.
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