Home / Crypto Currency / According to John McAfee, Decentralized Exchanges Are the Future

According to John McAfee, Decentralized Exchanges Are the Future

John McAfee is a man who likes to make bold statements. There are few people who haven’t heard his price prediction for Bitcoin by 2020 (and what he’ll do if he’s wrong), his controversial outbursts over the SEC, or his political ambitions.

But after a cryptocurrency journey as volatile as the market, the infamous Bitcoin Bull is still very much alive and kicking. And, according to him, decentralized exchanges are the future.

You don’t have to be as ambitious about the Bitcoin price as McAfee, or as enthusiastic about certain token sales. But, you have to admit, he has a point when it comes to decentralized exchanges.

After all, if the vision laid out by Satoshi was to send peer-to-peer payments, sidestepping centralized authorities—why are we using layers of middlemen? It seems kind of ironic that we’re willfully adding centralization to a decentralized technology. Especially since the advent of Ethereum, smart contracts, and atomic swaps.

Beyond a basic misunderstanding of the vision for Bitcoin, here are a few other reasons decentralized exchanges are the future.

Decentralized Exchanges Are Surveillance-Free

Of course, not having one single point of control will always present a predicament. On the one hand, all people should be allowed to be responsible for their personal wealth. They should have the right to operate without the intrusion of governments or centralized authorities. In short, they deserve the ability to maintain their privacy.

On the other hand, well, it’s also carte blanche for criminals to fund terrorism, carry out cyber crime, launder money, and evade taxes. Decentralized exchanges allow for all these things to happen. They are surveillance-free and censorship-resistant with no ability for any single entity or person to take control.

In a recent interview, John McAfee told NullTX, “We are looking very strongly at decentralized exchanges. Why? Because with centralized exchanges we will be always under the thumb of governments.”

They Can’t Be Shut Down

Just as decentralized exchanges can’t be monitored by prying eyes, they can’t be shut down either since there’s no single point of failure. This is simply not the case with existing centralized exchanges (as we’ve seen in China and other countries).

While it’s true that centralized exchanges (think Binance and BitBay) can up sticks and move to a different jurisdiction, they’re still at the mercy of regulators. Just think back to December of last year when Coinbase had to share nearly 15,000 users’ information with the IRS.

McAfee states, “Until we get a functional decentralized exchange, we will always be at risk of being shut down.” And there ain’t no one who wants that to happen to their BTC.

They Allow for Truly Peer-to Peer Transactions

Decentralized exchanges allow us to cut out the middleman and actually make use of the beautiful peer-to-peer technology created for us. To free ourselves from the shackles of oppression and shake off the parasites feeding off our blood.

With decentralized exchanges improving all the time, the atomic swap feature will soon allow for interoperability between Bitcoin and altcoins. This means that users can send funds with zero need for centralized parties. They can simply agree on a trading price from BTC to ETH (for example) and complete the transaction immediately.

McAfee told NullTX, “Luxcoin, for example, today came out with their smart contract of functionality on the Lux Network… they are coming out with a decentralized exchange, and I think it will be one of the first distributed exchanges that actually functions using the atomic swap feature.” Pretty cool.

They’re Much More Secure

If you’ve heard of the Mt. Gox hack and the multitude of others (and let’s face it, who hasn’t?), you’ll know that keeping funds in centralized exchanges isn’t a good idea. Bitcoins may be immutable. But the centralized exchanges where you buy, sell and store them are not.

Centralized exchanges with their emails and passwords are huge targets for hackers. Since decentralized exchanges run over several nodes, they can absorb a breach without being compromised.

Moreover, they don’t act as custodians of funds, so the responsibility for private keys is on the user.

The Downside

There’s always a catch, right? Unfortunately, most decentralized exchanges are either still being built, or are fiendishly difficult for users. Unless you’re a programmer with a ton of patience and a penchant for numbers, that is.

The matching engines are much slower than centralized exchanges, and validating each transaction on the blockchain takes time. Furthermore, interoperability hasn’t allowed for cross-chain transactions thus far.

However, the interoperability issue looks like it will soon be a thing of the past—and developers are tirelessly working on the other issues as well. We’re at the tip of the iceberg of what’s to come—in cryptocurrencies and in the exchanges that list them.

After all, when we can do things more efficiently without middlemen, human error, security issues, and commission fees, what’s the use for centralized exchanges? Decentralized exchanges will undoubtedly form the shape of the future—and even John McAfee thinks so.

Read more

Check Also

Which Cryptocurrencies Will Survive The Altcoin Apocalypse?

With the massive crypto market rout that has occurred in ‘red August’ many are now talking of an altcoin extinction which could spell the demise for the majority of them. Which ones are likely to survive is the key question. Most of the altcoins have dropped way below their price levels this time last year and are 80-90% down from their all-time highs. This has led many to surmise that it could be game over for many of them. According to Ted Rogers, the president of crypto wallet provider Xapo, this extinction level event could wipe out 90% of the altcoins; We could be in the midst of the extinction-level event for “cryptoassets” that many maximalists have predicted. 90%+ of @CoinMarketCap list will disappear eventually – might as well happen now. Meantime, lower BTC price means incredible opportunity to buy more #bitcoin — Ted Rogers (@tedmrogers) August 14, 2018 This sentiment has been echoed by Ethereum founder Vitalik Buterin when he famously said that most of the coins on Coinmarketcap will go to zero back in October before the big run up. Buterin’s comments were aimed more at low quality alts, or ‘shitcoins’ as they’re commonly known in the trade. Rogers, however, believes that only Bitcoin is the king and now is the best time to buy it. He may be onto something since Bitcoin’s market dominance has increased to 53.7%, its highest level this year. Surviving the Extinction If there is merit to these words, which altcoins will survive? To find out we need to look back to the ones that have survived such market drops in the past. These are most likely to survive this slump and possibly grow stronger in the future. Going back to 2013/14 is an almost mirror image of the current market situation with a huge pump at the end of the year and a massive dump throughout 2014 when markets shed 80% before recovering again in 2015. Total Market Capitalization 2013-14 Looking back at altcoins in 2014 we can see Litecoin as the second most popular cryptocurrency, priced at just $9. Also in the top twenty altcoins back then were XRP, Dash, Nxt, Dogecoin, Bytecoin, Maidsafe, and Monero with a few others. The rest have faded into obscurity so it is likely that these few will survive the current market depression. More recently there were a couple of smaller jumps and drops in 2016. Altcoins around back then include Ethereum which has taken and held the second spot as it is now the platform of choice for 90% of blockchain startups. Also in the top twenty were the same coins as in 2014 plus Nem, Lisk, DigixDAO, Waves, Steem, Siacoin and Stellar. This is not to say that they will definitely be around next year but they have a better chance than some of the newcomers simply because they have weathered these storms before. A Working Product or System Another factor to consider is whether a project has a working product or is just still a concept or work in progress. This could be fodder for extinction as non-operational altcoins are weeded out in favor of ones that actually have something on the table or have made significant partnerships. Looking at today’s top ten Cardano is the worst performing altcoin dropping 93% from its all-time high. It does not yet have a fully working product and is largely conceptual though the roadmap does look busy, whether this is enough to avoid extinction remains to be seen. EOS is similar with no real functioning product and a massive slide of 80% since the hyped pump it had in April. Iota also seems ahead of its time and has lost over 90% since its ATH, and then there is Tron which must be the most overhyped altcoin in the list that still doesn’t really do anything yet. There are too many to mention, 1845 on Coinmarketcap in fact, and this article is largely hypothetical but if such an apocalypse is to occur, only those that have survived the test of time and have some degree of product functionality have the best chances of surviving again. Image from Shutterstock The post Which Cryptocurrencies Will Survive The Altcoin Apocalypse? appeared first on NewsBTC.

Leave a Reply

Your email address will not be published. Required fields are marked *

Disclaimer: Trading in bitcoins or other digital currencies carries a high level of risk and can result in the total loss of the invested capital. theonlinetech.org does not provide investment advice, but only reflects its own opinion. Please ensure that if you trade or invest in bitcoins or other digital currencies (for example, investing in cloud mining services) you fully understand the risks involved! Please also note that some external links are affiliate links.