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Decentralized exchanges are safer than centralized exchanges

The exchange has been the number one player in the cryptocurrency market. Every move of the exchange can affect the price trend of crypto. People have always suspected that there may be undersell to hammering the market within a centralized exchange.

Why they do that? Of course, in order to buy back at a low price, it can be said that the exchange takes the user’s funds to earn the user’s money.

The news that the exchange was stolen since the bear market this year has come with a price drop.

I believe that people who have been in the crypto community for a long time should still remember that there was a security incident in Mt. Gox, the world’s largest bitcoin exchange in 2013, and stolen 850,000 bitcoins, equivalent to 4% of total bitcoin, while bitcoin prices Since then, it has also fallen into a bear market for three years.

However, the outcome of these security incidents is always the user. The awakened people gradually turned their attention to the decentralized exchange.

Ethereum founder Vitalik Buterin once said:

I definitely personally hope centralized exchanges burn in hell as much as possible!

Click here:ethereum to usd exchange know the lastest price

What is a decentralized exchange?

Decentralized exchanges are trading venues that do not rely on third-party custody and people use peer-to-peer trading.

The decentralized exchange is known for not keeping the user’s private key. However, just a week ago, the decentralized exchange Bancor had an asset theft. In December last year, another decentralized exchange, EtherDelta, also had assets. Theft incident.

This has to be skeptical, is it really safe to decentralize the exchange? Let us review the theft of these two famous decentralized exchanges.

 

  1. In December 2017, the stolen event occurred at EtherDelta, the most decentralized exchange on Ethereum. EtherDelta’s domain name server was hijacked by malicious attacks. Domain Name Service (DNS) is a service that converts the website address (such as xxxxx.com) that people enter in the browser into the real IP address of the website server (such as 123.125.115.110). But the DNS server parses it into a fake website that hackers do exactly the same as EtherDelta. If the user logs in on the fake website by importing the private key, the private key is exposed to the hacker (using a third-party wallet) Tools such as Meta Mask, Ledger Nano S, login users are still safe).

In this incident, the hacker stole at least 305 ETH at the time worth about $240,000.

 

  1. According to official information from Bancor, the security incident was due to the theft of a wallet used to upgrade smart contracts. The hacker used this wallet to transfer the 24984 ETH in the ETH reserve pool connected to BNT and transfer it through smart contract. gone 229356645 NPXS and 3200000 BNT, it was worth about $ 23 million. After that, the Bancor team urgently frozen the stolen BNT and actively positioned the stolen ETH and NPXS in the United States.

 

It can be seen that the DNS hijacking attack in the German incident is an attack against Internet vulnerabilities, and has nothing to do with the security of the German-based exchange itself based on smart contracts, and if the decentralized etheric name based on Ethereum is adopted, The service (ENS) system can also defend against such attacks.

 

In the Bancor incident, the user’s digital assets are naturally safe because they are not the user’s wallet.

When the Bancor exchange was down due to theft, the user’s operation of his wallet was completely unaffected. If the centralized exchange is stolen, the user often faces the suspension of withdrawal and recharge, and can only wait for the final processing result of the exchange.

In addition to security, decentralized exchanges are anonymous because they do not require registration certification. However, despite all the advantages of centralized trading, decentralized exchanges do not seem to be widely accepted by the people in the currency circle. Currently, the most decentralized exchanges with the largest volume of transactions are still ranked behind the 50 rankings.

 

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