Cryptocurrency Exchanges Pivot to Decentralization to Avoid Overseeing User Funds

Earlier this week, Bloomberg columnists and editors Benjamin Robertson, Matthew Leising, and Andrea Tan spoke with various experts from decentralized exchange projects, research firms, and cryptocurrency exchanges to explore the motivation behind the focus of blockchain projects on decentralized exchanges. Any platform or application online is hackable, especially if poor security measures are implemented. Even the largest cryptocurrency exchanges in the global market such as Bithumb and Bitfinex experienced large-scale hacking attacks and major banks fall victim to long-term security breaches on a regular basis.

In December 2017, Bithumb, South Korea’s second-biggest cryptocurrency exchange and the only publicly listed cryptocurrency trading platform in the world, revealed that it held more than $6 billion worth of user funds at the time. Since then, the cryptocurrency market has dropped by around 50 percent in valuation and so based on the current rates of cryptocurrencies, Bithumb holds about $3 billion. Xapo, a Switzerland-based bitcoin wallet and custody service provider, has more than $10 billion stored in its cold wallets secured in underground bunkers, as a Bloomberg report revealed. $10 billion in deposits is more than the funds held by 3,000 banks based in the US.

Reference: https://www.ccn.com/cryptocurrency-exchanges-pivot-to-decentralization-to-avoid-overseeing-user-funds/

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