Calm down. That is not true. Smart contract based exchanges do not let people exchange real money into crypto. There will always need to be offchain exchanges for trading USD for crypto. Additionally, trading off chain is much cheaper than on chain.

Centralized exchanges will always exist because people want on / off ramps, people want low fees, and because people are willing to trust others.

But people don't care too much about that. If so many crypto users, who we can assume are more informed and care more about decentralization than the average person, massively flock to centralized exchanges, why would the general population use decentralized services if they're worse?

Correct. I commented this before, but if you compare (for Bitcoin) total daily transaction volume from Coinmarketcap (which probably isn't complete) to the actual transaction volume on the blockchain, something like 80% of transactions does not involve the blockchain. At least, that's from the top of my head from the last time I did the math. And those blockchain transactions are probably in part moving from hot to cold storage by exchanges and people moving around crypto through personal accounts.

If decentralization is the main feature of crypto, then we might as well stop using it right away, since nobody seems to actually care about it.

Before repeating your baseless argument, please read about my project. Start with the about page. Understand that we can have global commerce with crypto without the big centralized exchanges. It's only an issue of scaling down and accepting that even though "trust" is needed for efficient transactions, this can happen at a much lower level.

The word works is doing a lot of work there. Every compromise, hack, scam, theft, and weird "oops I sent the crypto to an address that doesn't exist and now it's gone forever" incident screams for central authority. Even what we call Ethereum is a rage-quit to pretend the DAO thing didn't happen.

No, that’s a shit carbon copy of order rings to facilitate the shit carbon copy of the regular market.

> How about FTX? You can claim some of the same bad characteristics, but certainly not the same systemic weaknesses, and frankly, types of disrespect.

.. that’s a centralized exchange like any other centralized exchange, with the added bonus of absolutely no regulatory oversight, compliance requirements, transparency and absolutely no asset protection. Considering that all this boring boomer-crap exists to protect market participants (so, you), I suspect that this is a level of disrespect and systemic weakness that’s almost impossible to achieve anywhere else. Anyway, what system, there is nothing “crypto” about centralized exchanges besides the assets being traded.

You’re probably going to contemplate decentralized exchanges now, so on this note I’d just like to remind you that not even decentralized exchanges like Uniswap or DYDX are actually decentralized, and even if they will be at some point, they will not be immutable, completely negating any of the hallucinated benefits to begin with, and they will probably never be either because it’s quite literally nearly impossible.

> How does this keep being repeated?

Because people with the faintest idea about economics or what a blockchain actually is are not in DeFi, so the echo chamber doesn’t even include the most simple concepts.

I have no doubt there will be very valuable applications for cryptocurrency at some point, but this shit ain’t it.

Please stop spreading disinformation.

> There's definitely a lot more smoke and mirrors there, especially when I need to register to these websites.

Again: those are independently developed and managed web apps which provide a nice graphical user interface to Stellar's decentralized exchange.

You don't need to use them to access the exchange. If you do, the accounts you create with them are unrelated to the exchange; they are specific to those web apps, and serve obvious purposes like helping you keep track of your trades.

None of this is even remotely hard to understand for anyone who knows anything at all about the subject. That somebody who claims to be more than a regular user would fail to understand it is not credible.

The point isn't that centralized exchanges are decentralized, but that the network is decentralized in spite of the existence of centralized exchanges. Crypto provides financial democratization by way of an open permissionless financial network. Large entities can't collude to lock in customers or lock out competition. Centralized exchanges offer convenience over the base network and so they see a lot of use. But your freedom to transact with the network can't be taken away by centralized players. There is no analogous "base network" when it comes to bank transactions.

Sure there is! E.g., in the SSL Certificate Transparency system, each CA maintains a certificate log that is essentially a blockchain. And even in the context of cryptocurrency, a centralized blockchain at least prevents the central authority from secretly issuing currency and lying about how much has been issued.

You are describing so called centralised finance (CeFi) whereas the most high quality Ethereum projects focus on decentralised finance (DeFi). DeFi tries to break any chains to opaque companies and have all actions happening transparently and auditable on-chain. However ones like Tether murky the waters a lot here.

The parent mentions DEX volume, which tracks on-chain wallet usage, not what is being traded in a CEX.

> Real-world transactions need to be reversible, need escrow, guarantees and a lot of other mechanisms that are by design not available using blockchains based assets

Many blockchain transactions have reversibility, employ escrow, and have very strong cryptographic guarantees.

The only point of your post that is not easily refuted is: blockchain is not decentralized enough. But compared to what? Is Ethereum, open source software with many thousands of nodes and developers spread across the world, more or less centralized than the US dollar?

Of course. All of that is kind of unavoidable if you want to interface with fiat.

It's the case in Bitcoin, but not as much in Ethereum and other ecosystems. The latter have a track record of compromising on that principle to bail out thefts enabled by shoddy engineering practices (this, The DAO, etc).

Nope, you just don't own any crypto assets if they are not stored on your own means. That's not hard to understand.

How can one tell that with a straight-face when the poster-boys of crypto (like Coinbase, FTX, ConsenSys, Circle, Uniswap, Binance etc) depend on centralized actors like VCs and Stock Exchanges?

You seem to misunderstand what the term trustless means in blockchain.

It means that you can verify the transactions on the network yourself and don't have to rely on any 3rd party to tell you whether a transaction is valid.

For example, if you want to sell an NFT to someone for 1 ETH, you don't need to rely on any centralized exchange, price oracle, or API endpoint to do that. You can run your own validator or full node, write and deploy a contract to handle to swap, have both parties verify the contract, and then execute it on chain. The parties don't even have to be two people who have ever met or communicated with each other and can work completely independently to execute the trade.

In reality, people do trust others and only the most extreme blockchain supports verify contract code and run nodes, but it's your choice on how much trust you have to rely on.

Sure, centralized exchanges can manipulate token prices, but the price can only be manipulated in the short term, and decentralized exchanges can help create a more honest market where prices are based off of real, transparent order books and every trade has a cost, which makes wash trading more difficult at scale.

If many people in this space are advocating for decentralized exchanges, how come everyone uses centralized ones?

If there's ever a time and place for voting with your wallet, this seems to be it, and the wallets are speaking loudly and clearly.

This is how I feel about the exchanges generally, which wield an incredible amount of influence in the crypto markets, for better or worse. It's a complete tangent, but reading about Tether's shifting story around its capital reserves terrifies me.

I have yet to see a blockchain implementation that's easy enough to use on its own that it could achieve widespread adoption without a strong market desire to have someone else manage the complexity of it for you. People talk about decentralization all day long while completely ignoring the fact that we've just shifted the centralized authority from one entity to another.

You don't. You don't need to interact with any websites to make transactions. It's on-chain. You can always run a (light, non-archival) node to ensure the transaction does exactly what you expect it to (before submitting it) do without ever going to a website.

You're right that if you trust absolutely nobody, not even chain explorers, you need to put in more work, do some digging and understand how the system works. You're exchanging usability for security/trust. The point is that you have the option to do that. If you are paranoid and don't trust centralized entities you don't have to. Decentralized exchanges can't cheat you, steal from you, freeze your coins, or go under. It's technically impossible because they don't have custody of your coins at all.