Centralized Exchange Vs Decentralized Exchange - Strength and Weakness - How BCIO Exchange will resolve problem issues

Background Idea
Nowadays, most cryptocurrencies have became the most popular phenomenon to most people worldwide. Based on CryptoCoinCharts data of May 15, 2018, there are more than 4,000 Cryptocurrencies in the world with a total 24 hours volume of around US$ 15 Billion and more than US$ 400 Billion market capitalization. Among all, Bitcoin (BTC) have market capitalization dominance of 36%.

According to worldwide data, the current active cryptocurrency wallets is estimated around 5 million units. And, also the biggest cryptocurrency database, Coinmarketcap, has listed more than 200 cryptocurrency exchanges. So, considering this big change of the investment world, we need to know exactly what technology behind each cryptocurrency, and what difference between Centralized Exchange and Decentralized Exchange, since nowadays most cryptocurrency exchanges face problem issues about security and transparency.

Centralized Cryptocurrency Exchanges (CCE)
Centralized exchanges are trading platforms that operate as traditional brokerage or stock or Forex markets. A CCE is owned and operated by a centralized company that maintains total control over all transactions using big server. Users of this kind of exchange don't have any access to the private keys of their exchange account’s wallets. Every transaction and settlement in this kind of exchange will be fully operated by third party, so all users give 100% trust to third party, as transactions can only be made through the mechanisms provided and approved by a central authority. The benefit that CCE can bring to its user at many aspect. The most CCE have high daily trading volume and also high liquidity of its operation. They also allow the exchange of Fiat money with Cryptocurrency amd also accept fiat currency payment by direct wire banking, debit and credit card. This kind of Centralized Exchange offer large advanced functionality such as margin trading, discounts for high volume trading, various institutional trading tools, Forex style currency pair trading, lending system, and large amounts of financial data. And also, the CCE is usually developed as user-friendly of trading interface. But, this Centralized operation of most exchange has its own high risk since their operation depends on big server of big data that connect to the internet, and also the private key of each exchange wallet of users is kept in the server. With this system, once outsider break its centralized system, they will easily hack the system and steal users' money. And, also this Centralized exchange has limited privacy for every single of transaction, so there is no system to protect every transaction data on exchange.

Decentralized Cryptocurrency Exchange (DEX)
As DEX are utilizing Blockchain technology system (distributed ledger), no centralizedcompanies operate DEX. So, in this way, DEX don't hold customers' funds, information, or even position, however they only serve as a matching and routing layer for trade orders. DEX offer most of their user about the security and transparency for every transaction that is held in their DEX system. Every single transaction is protected by decentralized model, in which every customers' funds is kept into the cold storage wallet that works as paper wallet without connection to the internet. And also, the hostings of this DEX is distributed through nodes, so it's lower risk in infrastructure downtime and hacker-attack. But, DEX also have weakness, especially about their trading operation. DEX offer limited functionality of trading such as order book and also system interface that is not user-friendly. Also DEX has the low liquidity to be operated as an exchange.

As we see above that both Centralized Exchange and Decentralized Exchange are not exactly cut and dry, since both have its own advantages and disadvantages. While, these days most CCEs provide more functionality related to user-friendly trading platform to its users. But, you must remember that the big development of Cyptocurrency market industry was born out the emergence of blockchain technology that is based on Decentralized system.

Blockchain.io ( https://blockchain.io ) is now here to answer all challenges regarding to problem issues be faced by most Cryptocurrency Exchange market. Blockchain.io is now creating User-friendly Exchange using Centralized order book facility to obtain custody service and trading efficiency, combining with Decentralized Settlement Services which refer to Atomic Swap and HTLCs in order to secure trading operation. I think https://blockchain.io trading platform going to be new generation of Cryptcurrency Exchange that will revolutionize the way of Cryptocurrency investment.