Binance DEX (decentralized exchange) could kill the dominance of Bitcoin BTC, since all transactions are done on-chain. This will expose the flaw in BTC's small block size limit, and cause BTC transaction fees to skyrocket.

in #bitcoin6 years ago

Demo for Binance DEX (decentralized exchange):

Currently, everyone holds Bitcoin BTC as their reserve trading currency.

That's because:

  1. BTC has legacy status as the default trading pair.

  2. Trading costs at traditional crypto exchanges are the same, regardless of cryptocurrency. Ex: Binance trading fee is 0.1%, regardless of coin. That's because transactions are done off-chain.

But we've all known the flaw in traditional crypto exchanges: if the exchange collapses or disappears, you lose all your coins, since you don't have any seed words or private keys.

With a DEX, you hold your seed words & private keys. If the exchange collapses or disappears, you should still be able to access your coins on the respective blockchains.

If DEX exchanges take off, that could be a fatal blow to Bitcoin BTC's legacy status as a reserve trading currency.

That's because:

  1. Bitcoin BTC's on-chain transaction costs are 20-200 times more expensive than for other cryptocurrencies (like BCH, LTC, DASH).

  2. Bitcoin BTC has a small block size limit, and can't scale on-chain, so as DEX trading volume increases, Bitcoin BTC's mempool & transaction costs will skyrocket, making it unusable.

RESULT: If decentralized exchanges - like Binance DEX - become popular, Bitcoin BTC on-chain transaction fees will become ridiculously expensive, and people will start looking for a new default cryptocurrency to hold / trade / spend. It will be the end of Bitcoin BTC dominance.



My Cryptocurrency Addresses:

 

CryptocurrencyAddress
Bitcoin (BTC)1G4RKC2G2hNQUPFi6hR62rgSn4aMSremML
Bitcoin Cash (BCH, Old Format)19LPrKtXEfz6qfSKPxAXtcrvpFQE6BvZYC
Bitcoin Cash (BCH, New Format)qpdkh7lsyvay6q99ysf7qqxz4l5hlq4x7sv0q7menh
Ethereum (ETH)0xD0bc5F82F0C6012d11D5D693824f0021CB534fD4
Litecoin (LTC)LQkTMaSTEwzNX1mTZoqNwsopwQrarqtXb6

Click the above links for the QR codes.

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