Centralized Crypto Exchanges has been in existence for so long and the competition has been stiff. Now they are facing a huge competition from their competitors.
What could be the Highest threats being faced by Centralized Exchange?
Centralized Exchanges are facing a lot of threats and these are:
Hacking
decision making is centered in a few hands
Centralized Exchange has been a victim of cyber crimes as they have lost a lot of investors funds to hackers. Decentralized Exchanges has taken this as an opportunity to penetrate the markets. Every investor doesn't feel OK when his/her money is in someones hands, so with Decentralized Exchanges they just transact and they store their crypto assets wherever they want to.
Decision is self centered or is in the hands of a few people and most of the exchanges they just do whatever they want, they can just adjust fees and protocols whenever they feel like.
With Decentralized Exchange its different because there is nothing much its just a transacting platform and if it happens that there are changes which need to take place, then they vote. Evey investor who possesses the governance token has a chance to participate.
The New Challenger
Decentralized Exchanges is the new challenger and it is taking over bit by bit.They may not completely takeover but they will soon have the largest market share. Investors are in love with the Decentralized Exchanges as they have total control of their own funds. They can store them wherever they want. The only problem with some Decentralized Exchanges is when swapping tokens, you will be charged exorbitant fees.
Decentralized Exchanges seem to have an upper-hand over the Centralized Exchange and we can say it belongs to the community as the decision making is not self centered and also the investors own their Private Keys and Secret Phrase. So to be just short and precise you do not own you money when you keep it on centralized Exchanges unless you move it.
If you store your altcoins on the Centralized Exchange wallets they if you are withdrawing you are given rules and regulations and mostly the minimum withdrawal is huge e.g minimum of $150. This is a huge disadvantage to small scale investors. Recently i bought 4million SHIB tokens from 1 Centralized Exchange and the withdrawal fee was 2million SHIB so you can imagine the type of processes you have to go through.
Unlike Centralized Exchanges on Decentralized Exchanges there is no need for verification processes, no need to upload your documents. So its an advantage to those countries which are restricted or under sanctions they can buy and sell their crypto.
