The DEX Masterclass is a series of episodes where George Harrap (Bitspark CEO) and Aaron Mangal (Editor The Latest Crypto) discuss the concepts of decentralised trading, how to trade on the DEX, advanced trading strategies, how to find unique trading opportunities and how trading on the Sparkdex works.
In the first episode, we take a deep dive into the world of traditional exchanges, and how cryptocurrency trading has created an entirely new concept: decentralised trading on the DEX.
In today’s trading world, we can make a distinction between centralised and decentralised exchanges. The differentiation between the two types of exchanges is a totally new concept, introduced by cryptocurrency trading. In the traditional world of trading, think forex and stock markets, we are almost always talking about a centralised exchange: one company that has both buyers and sellers on board.
When two people trade on a traditional exchanges, they are not actually trading directly with each other. Instead, it’s the centralised exchange that is the counterparty.
Taking these dynamics to crypto exchanges, the centralised exchanges like Binance act as the middlemen that provide order matching between the people trading cryptocurrency with another cryptocurrency or national fiat currency. Having to deal with several middlemen is becoming less accepted, and while the traditional world seems committed to that model, crypto exchanges have taken it to the next level.
Decentralised exchanges (DEX) are practically the opposite of what we’ve described under centralised exchanges. They are generally less easy to use with lower liquidity, but far more superior in terms of security.
There is no counterparty at the center of a trade on the DEX, traders exchange assets directly between each other. Individuals on the DEX have custody over their own funds, wallets and keys. There is no centralised authority that can stop you from trading or freeze your accounts.
Created by Bitspark, Sparkdex is a gateway to the BitShares DEX. It is not a new DEX, using a new blockchain or a new construct. Instead, it’s just a different way of interacting with the already existing BitShares blockchain and DEX.
Sparkdex is essentially a window that visualises your interaction with the BitShares blockchain, and Bitspark has added things that adds value for customers.
