New TokenInsight 2018 Cryptocurrency Exchange Annual Report Shows Centralized Platforms Dominate Still

Is the future of crypto really decentralization? While one could argue that decentralization in the ethos of the crypto industry, someone could easily argue that this is not the truth. A new report made by TokenInsight goes on the way of explaining how the industry continues to be largely centralized.

Despite the creation of many decentralized crypto exchanges in the last two years, most centralized exchanges continue to control the industry and the trade volumes of the market.

According to the information from the 2018 Cryptocurrency Exchange Annual Report created by TokenInsight, which looked at over 400 global crypto exchanges, decentralized exchanges are just 19% of the global ecosystem but their volume is actually less than 1%.

These figures are, indeed, very low, and they project a bleak future for the industry. If even with 19% of the exchanges being decentralized we still have a volume of less than 1%, this will actually hardly change. Why? Because when the industry gets mainstream, chances are that most people will choose centralized options.

They are far more easy to use and the larger part of the population does not care so much about decentralization, especially the larger institutional clients.

Despite Numbers, Decentralized Platforms Gained Traction in 2018

Curiously enough, the industry actually improved a lot on decentralized exchanges last year. With several new upgrades and new tradings protocols and infrastructure, there was an “explosive” growth on the market, according to the information from the research. The point, it seems, is that even with this full-fledged growth, the market is simply small when compared to the whole industry.

This is problematic, however, as decentralized exchanges are more transparent and have less issues than their centralized couterparts. Why are people choosing them, then? Because they are easy to use and big. Coinbase and Binance are huge today and the chances that a new user knows about them are fairly bigger than that they will know of a small decentralized exchange.

Despite the centralized exchanges often being hacked and having problems, as well as “problems of opaque trading rules”, as described by the report, they remain strong. The report is optimistic on seeing how many people are turning to decentralized exchanges, but one could easily be very skeptical of a change when you consider how much power Binance, OKex and other centralized exchanges have.

According to the reports, the first quarter of 2018 was the spike of usage for decentralized exchanges. They rose 195% when compared to the last quarter. However, they started to be less used after that and their trading volumes decreased in a significant way after the third quarter of the year.

Part of this, the report affirms, is because these exchanges were more sensitive to the price swings that the industry felt last year and they suffered more.

What can be expected in 2019? If the prices start to go up again, it is sure that decentralized exchanges will see a spike but we really have to be considerably positive to beleive that they stand a chance against their centralized counterparts so soon.

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