Hello everyone, today I will talk about the knowledge of blockchain application development, thanks for watching!
[This article is organized by mkz888z, if there is a need for project incubation, please feel free to communicate! 】
From absolute centralization to absolute decentralization, there are a lot of changes. To truly understand whether an exchange is centralized or decentralized, all changes must be considered.
What is a centralized exchange?
A centralized exchange is a platform or application that allows traders to buy and sell cryptocurrencies using fiat currencies or other cryptocurrencies. It is a market for token trading. The user deposits the money directly into the exchange, and the exchange acts as a wallet to keep the funds until the order is generated. Exchanges keep their systems off-chain, which means that these transactions are not recorded by the blockchain. Once the order is generated, the exchange will match the buy and sell orders in real time.
In a perfect decentralized exchange, users will have control over their funds. The goal of a decentralized exchange is to directly establish a "person-to-person" market on the blockchain. Funds are not sent to an exchange or wallet owned by a single platform or institution: on the contrary, orders and transactions occur on the blockchain. As a result, there are no middleman fees, assets are not affected by hacker attacks, and users truly have control over the assets.
The digital currency trading system involves many aspects such as transaction matching, wallet storage, liquidity, etc. The system development technology requires a high degree of security and stability, so the R&D technology requirements are relatively high, and the digital currency exchange application should be fast, intuitive and powerful. In order to achieve these goals, the exchange application should include the following components: trading engine, front-end user interface, digital asset wallet, management console, etc.
So why use a blockchain exchange? What are the benefits of using blockchain exchanges?
The advantage of exchanging on the blockchain is that the exchange does not hold a large amount of cryptocurrency for users, and all cryptocurrencies will be stored in the user's wallet or smart contract control on the blockchain. Originally need to trust the centralized exchange, now only need to trust the blockchain and smart contracts. Most of the smart contracts used in exchanges will open the source code so that everyone can confirm the details of the contract.
Centralized exchanges usually do not disclose the source code of transaction details, and only their internal personnel can know how they actually operate. The open smart contract maintains the transparency and security of the transaction process, even if it is profitable, the split will be published on the blockchain
. [This article is organized by mkz888z, if there is a need for project incubation, please feel free to communicate! 】
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