The requirement for innovative cutting-edge features and evolving capabilities, has been at the forefront for cryptoasset traders and traditional financial establishments to develop a working relationship. The discussion is predominantly revolving around the concept of centralised entities with the benefits and drawbacks of centralisation versus decentralisation for exchange platforms.
For those who purchase cryptoasset, they are supporting an aura of transparency and ever-increasing control of assets for owners. With this interest in mind, we are starting to see movement from regular centralised exchanges, transitioning or developing a decentralised model.
Many centralised institutions are experiencing a lack of confidence in the public view. The lack of trust and reliability in these institutions has hastened the progression of blockchain technology that can provide greater transparency. The operation hopes to settle and re-establish the perception of trust when compared to the evolution towards the modern generation and financial systems.
The capability of the technology is said to be groundbreaking and exciting, and whilst ever greater numbers embracing the new and diverse industry. It must be stated, that an entirely decentralised network is not infallible and does not ensure security and trustworthiness and require keen knowledge on the system and how it operates.
It also must be remembered that the technology and community is still in its development phase and new exciting sectors are still to be reached. The trend of centralised platforms converting to decentralisation has the ability to be beneficial for both consumer and the sector itself. By establishing asset safety, transparency, financial regulation and inclusion, the system aims to revamp existing power and develop greater trust for the individual user.
Many industry insiders, who have stated the potential for migration to blockchain technology within and outside the crypto world, have ascertained 3 key areas that are potential roadblocks that must be overcome –
- Liquidity: with the concept still in its infancy, there are little users causing much less liquidity. New users adopting and embracing the change is needed. Throughput issues can also cause liquidity problem.
- Network speeds can be limited or downgraded on decentralised platforms. As the user is in control throughout capability of the protocol.
- A lack of features and user-friendly service.