The decentralized feature of cryptocurrency is one of the key features that add to the integrity of the market, making it trustworthy. When something is decentralized, it means that it is not governed and authorized by one single entity, but rather by the users themselves.
In the cryptocurrency landscape, decentralization is quite decisive, meaning that the system is either decentralized or the other way round. However, this may not always be the case. We can consider decentralization as a wide range of things and many attributes of a single cryptocurrency network can be categorized into different parts of the range.
A decentralized cryptocurrency exchange is often referred to as DEx. In this system, there is no third party or entity that traders can rely on. This offers versatility and independence to all users on the system, making it very convenient and seamless to complete transactions. All activities are transparent and will be kept secure on the blockchain.
Example of decentralized cryptocurrency trading
In the cryptocurrency decentralized system, you can take your assets (BTC, ETH, etc.)to a virtual gate that will keep records of the activities and provide you with proxy tokens in place of your existing assets. The given tokens can now be used to complete transactions within the blockchain of the exchange system. The actual cryptocurrency that lies within the aforementioned gate can now collateralize your tokens.
What you do next in the system is your own free will. You can sell or trade your existing tokens with others freely on the system. All records are kept secure on the blockchain. Cryptocurrency can be acquired when you receive tokens from a transaction and wish to convert them.
Perks of being a decentralized system
In contrast to the more common centralized system, the decentralized system offers a lot more freedom and control to its users while at the same time assuring them with a security system that is pretty much impossible to hack. Another advantage is that decentralized systems often charge very tiny amounts of transaction fees. It is not completely free.