One of the most popular ways to store and manage crypto is through a centralized exchange such as Coinbase or Binance or even in a central bank. However, history has taught us that centralized institutions might not be the safest way to hold your crypto. In this article, we will discuss why centralized platforms may not be the best option and reveal an alternative way to hold your cryptocurrency.

What is a centralized platform?

A centralized platform is a platform that is managed by a central authority. For example, Coinbase is a centralized crypto exchange because it is owned and operated by Coinbase Inc. Binance is another popular centralized crypto exchange.

Centralized exchanges are convenient because they offer an easy way to buy, sell, or trade cryptocurrency. However, there are some downsides to using a centralized platform. The first downside is that you are entrusting your crypto to a third party. This means that you are not in control of your own crypto and you have to rely on the security of the platform to keep your crypto safe. The second downside is that centralized platforms are subject to government regulation. This means that the government can potentially freeze your account or prevent you from withdrawing your crypto.

The China Crypto Ban

One recent example of government intervention is the China crypto freeze.

Over the weekend, a number of Chinese central banks froze cryptocurrency transactions. This has caused a lot of uncertainty and many people have lost access to their funds.

As part of the freeze, crypto owners are now unable to withdraw their funds from central banks- an example of a centralized platform that was affected by government regulation. In fact, thousands of crypto holders stormed a bank in Zhengzhou in protest of the freeze.

China has a track record of strict crypto regulations. However, the most recent event is just one example of how keeping your funds in a centralized account leaves you with no control.

It has been reported that crypto holders originally chose to store their funds in the rural banks due to high interest rates. However, those same investors have now been caught out and have potentially lost huge amounts of money.

How To Keep Your Crypto Safe From Centralization

So what is the best way to keep your crypto safe from third-party governance? The answer is to use a decentralized exchange. A decentralized exchange is an exchange that does not rely on a central authority. This means that you are in control of your own crypto and no one can freeze or shut down your account. Decentralized exchanges also have better security because they are not centrally located and therefore, are less likely to be hacked.

The Best Decentralized Exchanges 2022

There are many decentralized exchanges on the market but not all of them are created equal. Here is a list of the best decentralized exchanges in 2022:

1. Uniswap

Uniswap is  a decentralized crypto exchange that allows you to trade Ethereum-based tokens. It is one of the most popular decentralized exchanges and it is very user-friendly.

2. SushiSwap

SushiSwap is a decentralized exchange that allows you to trade a variety of different cryptocurrencies. It is a fork of the popular Uniswap exchange and it offers a similar user experience.

3.SokuSwap

SokuSwap is a fairly new player but certainly doesn’t fall behind when it comes to user experience, asset variety and trading tools/features.  This makes it one of the best decentralized exchanges currently available.

Furthermore, SokuSwap offers a market leading community of crypto enthusiasts. You can connect with like minded traders through Discord or Telegram and seek support from experts which is a great way to improve your trading skills.

4. Bancor Network

Bancor Network is a decentralized exchange that allows you to trade a variety of different cryptocurrencies. It is a bit more complex than some of the other exchanges on this list but it offers a lot of features and tools that can be very useful for experienced traders.

5. Kyber Network

Kyber Network is a decentralized exchange that allows you to trade Ethereum-based tokens. It is amongst the most popular exchanges and is known for being fairly user friendly.

Tips for trading with a decentralized exchange

Here are some tips to help you get started with trading on a decentralized exchange:

1. Do your own research- When you are trading on a decentralized exchange, you are in control of your own crypto. This means that it is important to do your own research and not rely on someone else to make decisions for you.

2. Keep your private keys safe- Decentralized exchanges use private keys to keep your funds secure. These keys should not be lost or shared with anyone else. Private keys are the only way to prove ownership of your crypto when using a decentralized exchange and mean that your funds are highly secure.

3. Connect with other traders- As mentioned before, most decentralized exchanges have a community of users that you can connect with. This is a great way to get support and advice from experienced traders.

China's crypto ban has left many investors feeling uneasy about the security of their assets. The ban highlights the risks of using a centralized platform to store and trade crypto. The best way to keep your crypto safe from third-party governance is to use a decentralized exchange. Decentralized exchanges are not centrally located and therefore, are less likely to be hacked. They also offer better security because you control your own private keys.

Frequently asked questions

Is a decentralized exchange better than a centralized exchange?

Decentralized exchanges offer better security because they are not centrally located and therefore, are less likely to be hacked. They also offer better security because you control your own private keys.

What is the best decentralized exchange?

There are many decentralized exchanges on the market but not all of them are created equal. The best decentralized exchange in 2022 is SokuSwap. It offers a user-friendly interface, a variety of different assets and a market leading community of crypto enthusiasts.

What is China's crypto ban?

In China, it is now illegal to trade or hold cryptocurrency. This means that if you are a Chinese citizen, you can no longer buy, sell or hold crypto. The ban has left many investors feeling uneasy about the security of their assets.

Are decentralized exchanges safe?

Decentralized exchanges are not centrally located and therefore, are less likely to be hacked. They also offer better security because you control your own private keys.

What is the best way to keep my crypto safe?

The best way to keep your crypto safe from third-party governance is to use a decentralized exchange. Decentralized exchanges are not centrally located and therefore, are less likely to be hacked. They also offer better security because you control your own private keys.

Posted 
Jul 9, 2022
 in 
DeFi Education
 category

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