As governments around the world turn their money laundering paranoia against the Bitcoin exchanges, alternatives are emerging for those who are looking for real decentralization.
Anonymous Bitcoin transactions are increasing
2019 should be the year of decentralized exchanges (DEX), but in reality very few decentralized exchanges have gained ground against their central siblings.
Localbitcoins has made buying and selling BTC easier for people living in repressive nations with capital controls – which is effective for large parts of South America and Asia.
There are now decentralized exchanges that use anonymizing networks like Tor to operate Bitcoin nodes. According to Trustnodes, Bisq, the lesser known Bitcoin exchange, processes millions of BTCs every week.
As it says on the homepage of the stock exchange:
“It often seems that the dominance and vulnerability of centralized exchanges is the Achilles’ heel in the current Bitcoin ecosystem.”
The DEX uses a Bitcoin node and desktop software instead of a central website – and processes up to $ 8 million a week in peer-to-peer Bitcoin trading.
Due to the decentralized technical capabilities of a node, computer resources are used for synchronization – and the speed may not be the standard that users are used to from popular trading platforms.
The software creates a Bitcoin address, which means that users already need BTC to deposit, which can be an entry barrier.
According to the report, the system was designed to run autonomously, with buyers and sellers choosing their own payment platforms for Fiat transactions. The platform uses arbitrators and a DAO as a governance system for dispute settlement in the event that a party misuses the trust granted for trading.
Bisq is even beyond the reach of ICANN and ISPs because everything can be operated from a home computer through a proxy.
The exchange has been running since 2016 and is becoming increasingly popular, as even LocalBitcoins in some countries is subject to the strict KYC regulations. Many countries prohibit using some of the major centralized exchanges.
Binance Singapore blocks wasabi
It was recently announced that Binance Singapore blocked wasabi withdrawals to comply with the country’s local regulations. Wasabi is a Bitcoin wallet with data protection that contains gate and mixed functionality.
Binance users expressed their anger on Twitter last week that the stock market is bowing to their government’s demands for personal and financial information.
The crypto world clearly needs more decentralized exchanges – but that will lead to a bigger struggle with governments that clearly don’t want citizens to move their money anonymously.