Daily Crypto, Finance, and Tech News Summary – September 15, 2023

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Welcome, and thank you for being part of the MyZucoins community! Let’s get into an interesting piece of crypto, finance, or tech news to stay ahead.

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Risky Business: The Dangers Of Many Crypto Exchanges

When it comes to purchasing and holding cryptocurrency, crypto exchanges are not your safest bet.

Unlike well-regulated stock exchanges, most crypto exchanges operate outside of these regulations.

Major players like Binance, Coinbase (though most regulated of them all), and FTX even contradict the original vision of Bitcoin, centralizing control in a system meant to be decentralized.

In the early days of Bitcoin, acquiring the cryptocurrency required mining, which involves complex computations to verify transactions on a blockchain.

The coins were stored in a digital wallet, either online or on a physical device, which is considered the safest method because it can be disconnected from the internet to avoid hacking.

Before exchanges, trading meant direct sales between owners through online forums.

Crypto exchanges simplified this process, especially for less tech-savvy investors.

Two types emerged: decentralized exchanges (DEX), which connect buyers and sellers, and centralized exchanges (CEX), which not only facilitate trading but also hold cryptocurrency on behalf of customers.

Centralized exchanges have proven more popular due to their simplicity.

However, what customers gain in convenience, they lose in control.

Exchanges typically hold your coins in their own wallets and accounts for you.

Consider the headline case of FTX, a centralized exchange holding between $10-50 billion in cash and crypto assets.

It acted as an exchange, a broker, and a bank, all without the regulatory oversight of these institutions.

Customers lost control of their assets when the platform got into trouble. FTX spent an estimated $375 million on advertising and endorsements to increase trading volumes and create an illusion of safety.

In the mostly unregulated crypto world (though this is changing), it’s crucial to remember the adage, “Not your key, not your coins.”

This means that your crypto isn’t safe unless you control your private key and store your coins in your wallet.

Crypto exchanges, especially most centralized ones, pose a significant risk.

To mitigate this risk, it’s best to educate yourself on trading crypto, learn how to use a self-custody wallet, opt for a decentralized exchange, experiment with small amounts and only risk what you can afford to lose. Read more here.

More On This Topic:

Crypto exchanges are central to these scams because they let money travel quickly and efficiently worldwide.

Since the dawn of cryptocurrency in 2011, at least $11 billion has been stolen in various digital heists, encompassing cryptocurrency exchanges, wallets, and mining platforms.

Crypto Exchanges Face Banking Headwinds Down Under.

Zucoins has revealed its solution to the chaotic world of crypto exchanges, Zutopia, which is focused on being a decentralized marketplace.

Productivity, Not Speculation: The Driving Force of Sustainable Systems and Economies

Widening The Potential Of Cryptos Like Zucoin

Most people involved with Zucoins are excited at all of its possible use cases, just like those we cover daily here.

We thought we’d balance any hype with a more grounded, level-headed approach to the realities of many cryptocurrency exchanges.

The world of cryptocurrency has often been likened to the Wild West.

It’s a place filled with exciting opportunities but fraught with many dangers.

The many issues with traditional cryptos and crypto exchanges highlight the need for enhanced security and decentralization, which are the very principles Zucoins and its Splitchain technology, believe in.

The Splitchain network is built on the idea of decentralization, which directly addresses one of the primary concerns around most exchanges, which are centralized.

Of course, Splitchain isn’t a crypto exchange, but it demonstrates the point.

Centralized exchanges have been criticized for undermining the core principle of cryptocurrency decentralization.

Having only a handful of reputable places to convert crypto into a local currency, is a problem for the industry.

It’s one reason why more and more major institutions are moving into the space.

Stablecoins like Binance’s BNB (going through some turbulence right now), Tether’s USDT (long history of uncertainty) and even Circle’s more regulated USDC pose a huge, outsized weight on the entire cryptocurrency industry.

Self-managed crypto wallets, known as “self custodial” wallet apps, like the Zucoins wallet app, with backups, are typically a preferred option to keeping crypto with a centralized exchange.

For really sensitive wallets, with lots of value contained within them, it’s even best to backup the wallet into what’s known as “cold storage”.

This is where you backup the wallet, then remove it from your device.

Instead, you could keep a smaller amount of coins in another one of your wallets loaded into your device.

It’s also where marketplaces like Zutopia could have an edge.

With Zutopia, nobody is holding your crypto on your behalf, as exchanges do.

You deal directly with the person transacting on the other end.

It’s going to be really interesting to see what you think when it’s ready to launch into beta.

We’ve thought of some very handy mechanisms to improve safety in peer-to-peer marketplaces, such as credit card verification and temporary holds until the transaction is completed.

This approach helps users maintain control over their own transactions, addressing the issue of lost control that customers experience with centralized exchanges.

Centralized platforms like FTX, and it seems many other crypto exchanges, have borrowed their customers’ funds without their knowledge or consent.

In a world where the value of the cryptocurrency market has skyrocketed from $10 billion in 2014 to $876 billion in 2022, it’s essential for emerging crypto products to set themselves apart and avoid these pitfalls.

The Zucoins team has done this by offering a ground-up rethink, with the aim to be simpler, more efficient, and a more friendly crypto experience, all while maintaining a steadfast commitment to safety and decentralization.

It’s not enough to merely participate in the crypto market.

To truly make a difference, we need to play our part in transforming it.

This means thinking about different ways to solve hard, long-standing problems, hitting milestone after milestone.

It also means a focus on building all kinds of useful applications and experiences on top of the Splitchain protocol.

These approaches will truly benefit the utility of the system, far more than speculative exchanges will.

That’s the goal of the Splitchain network and Zucoins.

If you liked this newsletter, please forward it to someone who might like it too.

You can also donate here or even buy some Zucoins. Every little bit helps us improve.

What did you think of this newsletter? Reply to send us feedback on what you liked or want to see featured more. There’s more coming, so stay tuned.

All the best,
Peter & Rob

Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.