Is ICTE Poised to Solve the Problems of Centralized Exchanges?
Cryptocurrency has taken the world by storm over the last few years. Although most people may not fully understand the inner workings of crypto and blockchain, they certainly have heard of Bitcoin. For those brave souls that dare venture into the market by purchasing coins, however, the task can be daunting. With little to no regulation, the cryptocurrency market is essentially the modern-day version of the Wild West. Given these problems, there is no doubt that improvement is needed. And ICTE may have the answer for addressing the problems associated with traditional centralized exchanges.
Centralized Exchanges are Far From Perfect
Most active crypto traders are familiar with the dominant crypto exchanges like Binance, Coinbase, Kraken, Poloniex, and Bitfinex. The exchanges offer a large base of customers the opportunity to trade different cryptocurrency pairs. While most transactions run smoothly, they aren’t perfect.
One of the primary fears for most crypto traders are exchange hacks. Even Binance wasn’t immune from this as it reported a theft of approximately $40 million worth of crypto. Cryptopia, another popular but smaller exchange, suffered a major hack earlier this year and has now closed for business. It is for this reason that most traders are told to store their tokens off the exchanges, preferably in cold storage.
Another major issue with centralized exchanges is the lack of transparency. There have been stories about exchanges asking various crypto projects for bribes in order to bolster their trading activity. This type of trading, called wash trading, jacks the trading volume so as to make a token appear to be in demand.
Lastly, there can often be a lack of liquidity. Since the exchanges don’t communicate with each other, traders often have to open multiple accounts at different exchanges in order to take advantage of the best bid/ask prices as well as higher levels of volume.
When looking at all of these problems, it’s no wonder that some crypto traders lose patience and decide to call it quits. In order to take cryptocurrency to the next level, a better solution is needed and ICTE may have the answer.
ICTE is a cross-blockchain decentralized exchange comprised of a collection of regional cross-blockchain exchanges that reinvents the traditional model of cryptocurrency exchanges. Additionally, this model distributes clients to create a global liquidity pool which allows for the secure management of digital assets. This addresses the above-mentioned problem of fragmented liquidity across the various centralized exchanges.
The issue of exchange risk is also negated by distributing clients across a variety of exchanges. In this way, crypto traders, especially active ones who want to keep a trading stack on the exchange of their choice, can sleep easy with ICTE. It’s really a win-win for both the market (through increased liquidity) and traders (by minimizing risk).
No Daily Trade or Withdrawal Limits
One of the most annoying problems to deal with at centralized exchanges are the limits placed on trading and withdrawals. Most of the exchanges require KYC in order to bypass the most restrictive limitation. I’m not sure about others, but I’ve never been a huge fan of having to send my passport information across the internet. There are many nefarious characters lurking on the web who are just lying in wait to steal passport information and one’s identity. And, given all the exchange hacks that seem to take place on a monthly basis, there is no reason to assume my passport details would be safe at the exchange level.
ICTE won’t have daily trading or withdrawal limits which will give it a huge advantage over the other centralized exchange options.
When I evaluate new opportunities in cryptocurrency, one of the first things I do is look at the management team in order to assess their likelihood of success. Although one doesn’t necessarily need trading experience to start an exchange, it certainly can’t hurt. Alexander Kaplin, the CEO and Founder of ICTE, had a 20+ year career working and managing some of the top financial institutions in the world. He also has experience as a specialist, market maker, trader, and investor.
One of the biggest issues at some of the exchanges is that they don’t seem to be built with the active trader in mind. Everything should be geared toward making life as convenient as possible for the trader. After all, it’s the traders who are going to bring in the volume, and therefore the revenue.
Centralized exchanges have served their purpose for getting the cryptocurrency market off the ground. 2017 was a breakthrough year, and now it appears that things may be getting back on track. But, as with everything, it’s time for something better. Decentralized exchanges are the wave of the future and ICTE may be the one to bring them to the forefront.
Disclaimer: Author holds no investment position in ICTE.
Featured image courtesy of Shutterstock.