Changpeng Zhao “CZ”, the CEO of Binance spoke at the recently concluded Blockchain Partners Summit 2018 where he compared centralized exchanges with decentralized exchanges, spoke about the future of cryptocurrencies and exchanges, and clarified users’ doubts.
The Blockchain Partners Summit is a stage for people in the cryptosphere to share their knowledge on trends and development in the industry. The summit’s official blog states:
“The event aims to analyze and share trends of the blockchain as well as to estimate and develop a future market to provide various business solutions.”
Zhao spoke about the two types of cryptocurrency exchanges that exist right now: centralized exchanges and decentralized exchanges. He believes that centralized exchanges will become bigger in the near future with more people investing in them.
Centralized exchanges are those kinds of exchanges that have a trusted middleman that approves the transaction and completes the financial process. According to sources, the majority of the existing exchanges are centralized. Examples of centralized exchanges are any normal bank transfer or payments done via any of the established fiat money payment gateways. Zhao stated that even though a majority of the users prefer centralized exchanges, they are still prone to hacks and cyber frauds.
CZ stated that decentralized exchanges can hold more coins and transactions can be done anonymously. He revealed that this privacy is preferred by a lot of users as it gives them a sense of security. Zhao believes that the cons of decentralized exchanges are that it is too expensive and the liquidity is far worse than centralized exchanges. He gives this as the reason why decentralized exchanges will not undergo a mass adoption like centralized exchanges.
Zhao went on to inform the audience that Binance labs will be funding projects and be making sure they are carried out successfully. He then spoke about the rising trend of ICO’s in the market. According to Zhao, the bigger ICOs will negatively impact the growth of new products. He stated:
“ I prefer smaller ICO’s over bigger ICO’s, honestly. The main problem is that the bigger ICOs will give a huge valuation to the products and if the product fails the investors lose a lot of money. I definitely don’t want that.”
In Zhao’s opinion, there should be more of smaller ICOs that push new products into the markets. He stated that this system would stabilize markets and not overinflate it, thereby creating an ecosystem conducive to rapid development.
The CEO of Binance added that the future of cryptocurrencies and blockchain technology looks bright. He stated that with countries like Malta setting an example in cryptocurrency adoption, other countries will follow suit. He said that this will lead to the generation of millions of coins in the future and exchanges have to be prepared to deal with it. Zhao even said that in the future, almost all countries will have their individual coins, thereby creating a massive surge in cryptocurrency exchange developments.