3 ms·

> the solution isn't to use a different company exchange, its to go on-chain directly..... i'm a crypto noob - this is what i've been wondering - isn't the poi

> the solution isn't to use a different company exchange, its to go on-chain directly..... i'm a crypto noob - this is what i've been wondering - isn't the point of crypto that you can participate in these transactions directly without trusting an intermediary? why do people use exchanges?

yieldcrv 4y ago
the main point is familiarity, when trading other kinds of assets, the exchange is the destination. you buy it, and keep your assets there. deeeeep down the exchanges keep a hotline for you to ask for your share certificates or physical commodities, but they make it very hard, and when you get them you can't do anything with them easily. with crypto, the exchanges are just part of the journey and your wallet is the destination, it is very easy to get your crypto and there is an ever expanding set of things you can do with your crypto easily. people chose not to get familiar with that because its simply not the same user experience ("hard" wouldn't be the word I would use, just unfamiliar) and because they weren't there to use crypto at all, only attempt to profit from a delta in price differences or managed staking where the company lies about how much they are earning from staked assets and gives a little less to the user. people chose to learn or lose their funds. pretty simple. when it comes to "hard" versus unfamiliar, it will just be different people that chose to be crypto natives and self-custody and use on-chain services. its the same with every other advancement, there are still people that don't use ATMs and don't trust them due to the new problems that arise from their existence. there are still people that don't use discount brokerage firms because they are more familiar with calling their broker, computers are hard and they don't trust their money on the internet or services on the internet. its the same with crypto: nobody can stop you from becoming your parents, can't blame the user experience on everything.
- lupire 4y ago
  That's not right. Brokers and DRS hold shares, not exchanges. If Exchanges held shares, "settlement" delays would not exist.
  - yieldcrv 4y ago
    accurate, making no difference in anything I wrote about the user experience. custody is simulated by the exchange, and demands for self-custody is initiated at the exchange.
tsimionescu 4y ago
Because exchanges are the easiest way (by far) to exchange money for crypto, and they also make it as easy to transact as an investment app. The alternatives, as far as I know, are to find a friend willing to give you some crypto for money, or to buy mining equipment and get crypto from that, or to find some trusted physical exchange to pay cash to and trust they will pay the crypto you bought into your wallet. Even after you get in, you'll have to create and manage your own wallet for every crypto you want to trade in (though an on-chain DEX could in principle handle that for you, I believe none of the popular ones do, based on previous discussions). There are probably apps that help, depending on how much you want to go trust-less.
pjc50 4y ago
All crypto on chain transactions are one leg of a transaction. When you pay for something, you want the thing you buy to actually arrive, and if that's something off-chain (like real money), you need to trust your counterparty to actually deliver it. Crypto exchanges also solve the reverse problem: how to trade real money for cryptocurrency. That can't be done on chain. Exchanges can also cut out blockchain transaction fees and transaction rate limits, and offer all sorts of tempting (but probably fraudulent) financial products.
tyfon 4y ago
*coins have an insane transaction cost and it takes a long time, they are not really suited for gambling in this way. So you get exchanges that just lets you trade without actually sending things on the networks since they are so useless.
brazzy 4y ago
Because doing on-chain transactions with a known counterparty that gives you their wallet address is completely impractical for trading/speculation/gambling, because you'd lack a way to find the counterparty that's going to give you the best price, and you'd be paying on-chain transaction fees. And trading/speculation/gambling is 99% of what people do with cryptocurrencies.
- IanCal 4y ago
  > , because you'd lack a way to find the counterparty that's going to give you the best price, This part can still be done on chain, "automated market maker" is the term to search for for more information about how this part of the problem is usually solved.

yieldcrv 4y ago

the main point is familiarity, when trading other kinds of assets, the exchange is the destination. you buy it, and keep your assets there. deeeeep down the exchanges keep a hotline for you to ask for your share certificates or physical commodities, but they make it very hard, and when you get them you can't do anything with them easily. with crypto, the exchanges are just part of the journey and your wallet is the destination, it is very easy to get your crypto and there is an ever expanding set of things you can do with your crypto easily. people chose not to get familiar with that because its simply not the same user experience ("hard" wouldn't be the word I would use, just unfamiliar) and because they weren't there to use crypto at all, only attempt to profit from a delta in price differences or managed staking where the company lies about how much they are earning from staked assets and gives a little less to the user. people chose to learn or lose their funds. pretty simple. when it comes to "hard" versus unfamiliar, it will just be different people that chose to be crypto natives and self-custody and use on-chain services. its the same with every other advancement, there are still people that don't use ATMs and don't trust them due to the new problems that arise from their existence. there are still people that don't use discount brokerage firms because they are more familiar with calling their broker, computers are hard and they don't trust their money on the internet or services on the internet. its the same with crypto: nobody can stop you from becoming your parents, can't blame the user experience on everything.

lupire 4y ago
That's not right. Brokers and DRS hold shares, not exchanges. If Exchanges held shares, "settlement" delays would not exist.
- yieldcrv 4y ago
  accurate, making no difference in anything I wrote about the user experience. custody is simulated by the exchange, and demands for self-custody is initiated at the exchange.

tsimionescu 4y ago

Because exchanges are the easiest way (by far) to exchange money for crypto, and they also make it as easy to transact as an investment app. The alternatives, as far as I know, are to find a friend willing to give you some crypto for money, or to buy mining equipment and get crypto from that, or to find some trusted physical exchange to pay cash to and trust they will pay the crypto you bought into your wallet. Even after you get in, you'll have to create and manage your own wallet for every crypto you want to trade in (though an on-chain DEX could in principle handle that for you, I believe none of the popular ones do, based on previous discussions). There are probably apps that help, depending on how much you want to go trust-less.

pjc50 4y ago

All crypto on chain transactions are one leg of a transaction. When you pay for something, you want the thing you buy to actually arrive, and if that's something off-chain (like real money), you need to trust your counterparty to actually deliver it. Crypto exchanges also solve the reverse problem: how to trade real money for cryptocurrency. That can't be done on chain. Exchanges can also cut out blockchain transaction fees and transaction rate limits, and offer all sorts of tempting (but probably fraudulent) financial products.

tyfon 4y ago

*coins have an insane transaction cost and it takes a long time, they are not really suited for gambling in this way. So you get exchanges that just lets you trade without actually sending things on the networks since they are so useless.

brazzy 4y ago

Because doing on-chain transactions with a known counterparty that gives you their wallet address is completely impractical for trading/speculation/gambling, because you'd lack a way to find the counterparty that's going to give you the best price, and you'd be paying on-chain transaction fees. And trading/speculation/gambling is 99% of what people do with cryptocurrencies.

IanCal 4y ago
> , because you'd lack a way to find the counterparty that's going to give you the best price, This part can still be done on chain, "automated market maker" is the term to search for for more information about how this part of the problem is usually solved.