Usually, blockchain exchanges and traditional exchanges such as the NASDAQ or the London Stock Exchange are seen as polar opposites, with blockchain exchanges considered a more open and socially focused alternative, while traditional exchanges are seen as remnants of the old economic system. , – Close and against encryption and encryption technology.
This appears to be changing as blockchain exchanges finally begin to form strategic partnerships with traditional exchanges, allowing blockchain exchanges to use their technology in action. Is this the future of blockchain exchange?
The problems of traditional capitalist exchange
There are many drawbacks to traditional exchange platforms like blockchain technology, and exchanges can help fix. First, traditional exchanges open and close at specific times, which may limit trading activity for retail investors who may be busy during market hours.
In addition, traditional exchanges can have very expensive and complex fee schemes. It can also alienate investors with less money than trading in general.
Many traditional stock markets are still a bit out of reach for the small investors who will still be trading. This is because many traditional exchanges do not make fractional purchases, which is the purchase of part of an asset. Instead, the user will have to purchase a certain amount of assets, or the value of one asset.
Despite the inherent advantages of blockchain-based exchange platforms, there are still many advantages that can be achieved through blockchain exchanges using techniques created by traditional exchanges.
Some traditional exchanges have developed trading systems that can be increased easily with increased trading volume; With the explosive growth in the popularity of the cryptocurrency, it is important to ensure the scalability of work when exchanging cryptocurrencies. In addition, these trading systems feature low downtime and high flexibility to ensure smooth trading.
In addition, many critics widely believe that crypto exchanges are similar to the Wild West and are not organized. By partnering with traditional exchanges, cryptocurrencies appear legitimate, and therefore traditional exchanges like NASDAQ will not agree to work with specific blockchain exchanges otherwise.
Finally, many crypto exchanges have experienced unethical trading in the past. Meanwhile, traditional exchanges have systems that automatically display all trading activity on their platforms. By comparison, cryptocurrency exchanges recently started using these technologies to eliminate violent trading and reduce the cost of monitoring transactions, making crypto positions safer for traders.
It is hoped that cooperation between traditional exchanges, trading markets and cryptocurrency platforms will continue the continuing trend as cryptocurrencies are seen as valuable, safe and sound assets to trade.