Bitfinex, which claims to be the world’s biggest cryptocurrency Exchange, is developing a decentralized exchange platform using ethereum competitor EOS. The proposed exchange, which is called EOSfinex, should result in a boost in transactions and utility for EOS, a blockchain protocol for decentralized applications that was launched via an ethereum token sale in June 2017.
The protocol is hardcoded with cryptographic credentials, thereby making it easier for developers to focus on developing business logic for their application. Decentralized Exchanges utilize tokens, instead of fiat currencies, to enable trading. In this case, EOS tokens will be used for transactions. (See more: What Is EOS?)
EOS prices reached a high of $17.97 on January 13, before reversing due to a general slump in cryptocurrency markets. At 17:08 UTC today, it was trading at $9.84, up 9.75% from its price 24 hours ago.
The exchange announced the launch in a blog post recently.
“EOSfinex will combine the scalability and speed of EOS.IO with Bitfinex’s industry-leading expertise to deliver an “on chain” exchange designed to offer a fast, transparent and trustless platform for the trading of digital assets,” Bitfinex wrote. (See also: What Are Decentralized Cryptocurrency Exchanges?)
Decentralized exchanges, which are essentially peer-to-peer trading systems, are slowly becoming popular among cryptocurrency enthusiasts because they offer multiple benefits to users and developers. For starters, they eliminate the single point of failure problem prevalent in centralized exchanges, such as Coinbase or Bitfinex (in its current form). Thus, it becomes difficult to hack and bring down such an exchange because its functions are spread across multiple nodes.
Users are also in control of their own funds because decentralized exchanges do not require maintenance of a wallet for funds. In keeping with the ethos that underpins cryptocurrencies, such exchanges also record their transactions on public blockchain.
Bitfinex has encountered several of the problems listed above. Its entry into decentralized exchanges may make them more popular. (See also: Tether And Bitfinex Subpoenaed By Regulatory Agencies.) There are already several decentralized exchanges in cryptocurrency markets but they lack trading volumes for centralized exchanges. (See also: A Look At The Most Popular Bitcoin Exchanges.)
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns small amounts of bitcoin.
The post Will Bitfinex's New Decentralized Cryptocurrency Exchange Boost EOS Prices? appeared first on .
