South Korea’s second largest cryptocurrency exchange has announced plans to launch a new decentralised cryptocurrency exchange aimed at a worldwide user base. Crypto platform, Bithumb has confirmed it has partnered with blockchain specialist One Root Network (RNT), which has previously built an Ethereum-powered decentralised token transaction protocol nicknamed “R1” aimed at enhancing asset security and matching efficiency on the exchanges.
The benefit of decentralised exchanges for cryptocurrencies is that individuals can buy Bitcoin and various other digital assets peer-to-peer, with no need for a third-party organisation to have to store their users’ crypto coins; thus, they are less susceptible to cyber-criminals that require a central point of attack. On the flip side, some p2p decentralised platforms are a little more sluggish than a centralised exchange.
It’s thought that Bithumb’s decision to go global with its decentralised plans is based on the raft of competitor exchanges increasing focusing on decentralised operations. Binance recently confirmed its ambition to become fully decentralised, while fellow South Korean platform, Upbit, also invested heavily in a brand-new decentralised platform called Allbit.
An unnamed official source from within the cryptocurrency industry voiced their excitement to Business Korea about Bithumb’s plans for global decentralised expansion. The source said that although the platform is currently “one of the leading global exchanges in terms of transactions” it’s no secret that the majority of its user base is “Korean”. The source added that Bithumb’s partnership with RNT is part of the company’s long-term “strategy to compete with other leading exchanges in the global market”.
The drama and uncertainty surrounding centralised cryptocurrency exchanges has accelerated the need for decentralised alternatives that can provide more effective security to thwart cyber-hackings and other fraudulent online activities. Bitfinex recently announced the release of a beta version of its EOS-powered EOSFinex platform: a so-called “peer-to-peer value exchange” that was “unconstrained by borders” and provides a transparent platform for crypto investors around the world to trade high-value cryptos and even emerging altcoins.
In some nations, the switch from centralised to decentralised cryptocurrency exchanges has been out of necessity rather than evolution. In India, a country whose cryptocurrency industry is still very much at the burgeoning stage, have been forced to migrate their exchanges to peer-to-peer services to circumvent restrictions imposed by India’s Central Bank.
Providing decentralised peer-to-peer cryptocurrency exchanges can prove their security, transparency and integrity by preventing a single point of failure, the prospects for decentralised platforms look encouraging, with their ability to legally sidestep government regulations and censorship. Put simply, a decentralised exchange means that there is no single or centralised party that can be targeted for any wrongdoings, making these platforms entirely immune from punitive measures implemented by governments and other world-leading organisations. Decentralisation must be viewed as a step forward for not only Bithumb but the cryptocurrency industry as a whole.