It’s time to stop learning lessons the hard way: Leave centralized exchange hacks behind and enter a world of security and peace of mind with Block DX
Singaporean Exchange loses $5 Million in XRP, Cardano — $10 Million in XRP Stolen in GateHub Hack — Cryptocurrency Exchange Cryptopia Goes Into Liquidation — Just some of the sad headlines over the past year that illustrate the dangers of centralized exchanges. Perhaps an even more disturbing thought than the headlines themselves is that all of these headlines and hacks could have been avoided and none of the users would have lost their funds if they had been using Block DX. But hindsight is a wonderful thing and it is easy to say “should have”, or “could have” but unfortunately the users that lost funds in these hacks learnt their lessons the hard way and hindsight is all they now have left. Don’t put yourself in their position. Instead have peace of mind and make the change NOW — start trading on Block DX. Over 100 tokens in over 5000 combinations can be traded right now. And if the above examples of users losing their funds are not alarming enough to convince you to make the change and leave centralized exchanges behind for good (after all, old habits die hard) then this article will provide many more reasons why you should never go back to a centralized exchange.
So what is Block DX precisely? What makes it different from other exchanges? There are numerous reasons including cross chain swaps, trustless nodes, no KYC and many more. If you have 5 mins to spare — scroll down to get the full story but if not, the tl:dr version is best summed up with this image:
If this inspires you to make the change, you can do so right now by downloading Block DX here and watching this short Block DX setup video that shows how to set up Block DX in just a few clicks:
The Devil in the Details
To decentralize an exchange, it is not enough to just create atomic swaps. Exchanges have four core functions, and each of them must be decentralized before an exchange can be called a “DEX”:
- Capital storage
- Order book compilation
- Order matching
Block DX decentralizes every single one of these aspects. It is the only exchange to do so. But beyond that, Block DX has achieved an overall uncompromising standard of decentralization is all its aspects:
- Open source code
- No company
- No KYC or registration process
- No withdrawal limits or third-party control over funds
- No trade fees
- No proxy tokens or coloured coins
- No proprietary wallet
- No single blockchain
Here is the breakdown of how this was achieved:
Capital storage is decentralized by enabling you to trade from the wallets you already have on your devices. Block DX communicates with wallets’ RPC interfaces, and currently supports the wallets of over 100 coins. This means that there’s no need to deposit and withdraw coins, no more waiting for this to happen, and of course no third party control over your funds.
Order book compilation is decentralized by traders broadcasting their orders over a peer-to-peer network. This means that everyone on the network receives orders within milliseconds, and no one can get orders faster than anyone else by being closer to the server (because there is no server!). Unlike on-chain order books, which enable miners to frontrun, Block DX’s technology eliminates this possibility, giving no one an unfair advantage over others.
Order matching is decentralized by having market-makers choose their takers. If you add an order to the order book, then your Block DX selects a counterparty to trade with. No third parties control this. All action is self-sovereign.
Settlement is decentralized through the use of atomic swaps. “Atomic” means that the swap cannot be broken into parts; in other words, it’s impossible for you to send your coins and not receive your counterparty’s coins in return. The protocol is “trustless,” meaning that you can safely trade with anyone without having to trust their intentions. Once again, no third parties have control over this protocol — only you and your counterparty do — achieving decentralization of the highest degree.
Listings are decentralized because no party controls which coins you can use on Block DX. Equally, there is no limitation on which currency pairs you use: any coin can be traded with any other coin directly. A coin’s community can start using Block DX without requiring permission from anyone. While the Blocknet project tests and ensures support for very many coins, our open source codebase enables dev teams from anywhere to do the same, so that they can independently confirm support. In outside cases where Block DX does not already support a coin, anyone may contribute code that enables support.
Open source code enables the developer community to review, audit, and contribute to Block DX freely and transparently. As a result, no one need trust the Blocknet project’s intentions — instead, you can subject the code to arbitrarily high levels of scrutiny, so that you can satisfy your need for security no matter how high your standards are.
No company controls the project. It is critical for decentralized technology to thrive in adversarial environments, but companies are vulnerable to regulation, legal action, and many other factors which would threaten the project. Because of this, the Blocknet is a decentralized project with a global contributor base, ensuring that no regional or state action can compromise Block DX’s operation.
No KYC or registration process is required to use Block DX. Because trading is purely peer-to-peer, no third party controls your trading or takes on liability for delivering Block DX’s service. As a result, no legal responsibility is created that would require KYC or registration to use Block DX. This protects your personal privacy, and gives you true financial freedom.
No withdrawal limits or third-party control over funds is a natural consequence of your trading directly from your own wallets. You do not need anyone’s permission to use your money how you choose to: it is truly yours.
No trade fees are paid to a central entity. Some protocols return profits to a company or developer team, but this is a rent-seeking activity that enriches a central actor and does not fairly distribute fees to entities delivering the service. With Block DX, a network of service nodes ensure the liveness of the order book, and also validate orders (giving their testimony that orders are legitimate). In return for this, trade fees are distributed to all the service nodes.
No proxy tokens or coloured coins are used in place of the real coins you trade with. In many “DEXes,” you are required to deposit your coins and receive proxy tokens in return, which you trade with. But this is exactly what is required on centralized exchanges, where no trading is done using the underlying coins. Such designs take away your sovereignty over your coins, and instead require you to trust whoever has promised to exchange your proxy tokens for coins after trading. This is not decentralized. In contrast, on Block DX you trade your real coins directly, keeping control over them at all times.
No proprietary wallet is required to use Block DX. Some “DEXes” require you to trust your coins to some proprietary wallet, when it is not often easy to be sure that the wallet is secure and well-coded. Additionally, this would introduce a slow, unnecessary deposit and withdrawal phases to your trading, since it would be safer to store coins in your wallet of choice and to only use the proprietary wallet for trading. With Block DX, you can trade using your own wallets, which both gives you peace of mind, and speeds up trading by making it unnecessary to deposit and withdraw coins.
No single blockchain is used on Block DX. Not only would using a single blockchain require proxy tokens and a proprietary wallet, it would also place this blockchain at the centre of an interchain network. This is an unhealthy pattern that erodes the immense potential of the interchain, because it centralizes it, forcing value through the central chain and in some cases surrendering control over state to that chain (if not also duplicating state unnecessarily). The interchain has the potential to create ecosystem benefits as significant as the internet, but in order to do so, it must be as unopinionated about choice of blockchains as TCP/IP is about websites. Block DX is powered by the Blocknet protocol, a true interchain protocol that privileges no chain over another.
As you can see, Block DX is THE most decentralized (and thus safest) DEX combining ease of use (the UI is designed by VSA — their previous clients include Google, Alibaba, IBM and more) with speed, security and scalability in a way no other exchange does. With an easy automated set up that only takes a few clicks, there really is no reason not to make the change to Block DX so you can feel safe and secure in your trading.
SPV integration is underway. CloudChains Inc. (a separate entity from Blocknet) had begun development and testing of a lite multi-wallet dApp which uses XRouter’s multi-chain SPV. This allows for transactions to be verified through our Service Node network that are sent from a multi wallet or lite wallet and removes the requirement for a trader to have the synced blockchain of any assets being traded. The dApp will utilize a serverless architecture by hosting microservices on XRouter’s plugin system (XCloud) to provide functionality. On Block DX itself, a number of upgrades and improvements are also in the pipeline. Start trading on Block DX right now by downloading it here and following the setup guide and set up video. You can check out the roadmap for Blocknet here, read the whitepaper or join our discord community here.
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