Page 58 - Understanding EOS TojuKaka FlipBook

centralized exchanges but events like the fall of
Mount Gox and the ability of governments to
sanction exchanges has created a need for
decentralized exchanges. Decentralized exchanges
would allow users to trade their cryptocurrencies in a
more secure manner without the fear of sanctions
from the government, or any form of censorship.
After the crash of a very popular centralized
exchange called Mount Gox, it became obvious to
people that centralized exchanges are one of the weak
spots of cryptocurrencies. Centralized exchanges
work by allowing users to give them custody of their
cryptocurrencies. They store the cryptocurrencies for
users and provide liquidity to enable traders to buy
and sell.

Exchanges are very important as they provide a
medium for people to trade their digital assets. A
centralized exchange can be hacked or manipulated
by insiders. A decentralized exchange provides more
security, trust and freedom to users because it does
not take custody of user funds. What a DEX does is
to connect a buyer and seller and provide them with
smart contracts and rules to facilitate trades. Bitshares
is run as a Decentralized Autonomous Organization.

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