What are your views on cryptocurrency exchange? - Seedly
 

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Asked by Shareen Teo

Asked on 11 Aug 2018

What are your views on cryptocurrency exchange?

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Amos Goh
Amos Goh, BBA at National University of Singapore
Level 3. Wonderkid
Answered on 17 Aug 2018

Hey Shareen!

It depends on what aspect you're interested in, so it'll be helpful if you can let us know more!

As a user, cryptocurrency exchanges are necessary if you're looking to get your hands on some tokens / cryptocurrencies. There are different ways to categorise & look at cryptocurrency exchanges. Here are some ways to look at them:

  1. Centralised vs decentralised: Centralised exchanges (e.g. Coinbase & Binance) act as the middleman in storing your tokens & conducting your buy / sell orders, whereas Decentralised exchanges (e.g. IDEX) use smart contracts and other technologies (e.g. atomic swaps) to conduct your trades completely peer-to-peer. Generally, centralised exchanges are more usable and have greater liquidity, but represent a 3rd-party risk. Decentralised exchanges are theoretically more secure, but have lower liquidity and are less usable.
  2. Fiat-to-crypto vs Crypto-to-crypto: Fiat-to-crypto (e.g. Coinbase & Coinhako) are usually used to exchange your SGD / USD to major cryptocurrencies (e.g. BTC / ETH / LTC), whereas your crypto-to-crypto exchanges (e.g. Huobi & Binance) help you exchange your cryptocurrencies to other cryptocurrencies.

Logically speaking, as a new user looking into cryptocurrencies, you'll use a fiat-to-crypto exchange such as Coinhako to acquire your major cryptocurrencies. If you want to own other cryptocurrencies, then you can use crypto-to-crypto exchanges such as Binance.

Hope this helps!

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HC Tang
HC Tang, Financial Enthusiast, Budgeting at The Society
Level 8. Wizard
Answered on 16 Aug 2018

Not safe to use, few got hacked. Must buy hardware wallet to store your cryptocoins and ensure it is not connect to any network. Store your private ekey somewhere else safe also.

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Alan Seng
Alan Seng, Team Lead at Tech in Asia
Level 3. Wonderkid
Updated on 07 Jun 2019

What about cryptocurrency exchanges?

As a business model, it works great. Yes, some of them got hacked and lost millions of users' money. But this business model is a highly lucrative one. The business just needs to remember to enhance security as the business scales. Case-in-point: Binance is a cryptocurrency exchange started July 2017. Today, just after one year of operations, it has about 6 million users and recorded $200 million in profits (Source: https://www.ccn.com/binance-surpassed-germanys-biggest-bank-deutsche-in-profitability/), far surpassing Deutsche Bank, a 200-year-old bank with 100,000 employees, in terms of profitability.

Cryptocurrencies are losing its value now because the market is going through a retrace from the incredible bull run in Dec 2017 - Jan 2018. This is not the first time, price of Bitcoin has retraced several times after hitting highs in 2011 and 2013. Besides, prices of Bitcoin, Ethereum, and other major cryptocurrencies are still higher compared to the prices exactly this time last year. For example, in Aug 2017, Bitcoin is valued at about $4,000. Today it is valued at about $6,500.

Don't count cryptocurrencies out yet - maybe it's not stable enough to count as a safe investment right now, but it's important to be open-minded and focus on the technology and why it exists today. Some reasons why the concept of Bitcoin is novel:

  1. Bitcoin allows the peer-to-peer exchange of value without an intermediary. All other exchange of value requires a bank/financial institution/company that can be attacked or can experience downtime.
  2. Bitcoin is starting to be considered as a safe haven asset. Because it has no correlations with any other assets or commodities markets, it can be used as a good hedge.

Most of the activities in the crypto space is white noise, yes. But cryptocurrencies in itself is an interesting concept. I encourage you to be open minded. Don't put all your eggs in one basket and maybe cryptocurrencies might be a way to hedge your risks in other financial instruments.

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Kenneth Lou
Kenneth Lou

on 17 Aug 2018

Cryptowhale is here! :) haha. Thanks for sharing your thoughts!
James Yeo
James Yeo
Level 4. Prodigy
Updated on 07 Jun 2019

Go for established ones like Binance, Huobi etc.

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James Yeo
James Yeo

on 17 Aug 2018

The above i mentioned are for crypto to crypto.
Kenneth Lou
Kenneth Lou

on 17 Aug 2018

cool understand!
Gabriel Tham
Gabriel Tham
Level 8. Wizard
Updated on 15 Sep 2018

Quite a few of them got hacked. I don't feel they are as safe as banks now. And crypto is losing their value now.

Blockchain is a good technology but crypto may or may not be useful. I feel the investment is too risky.

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