Bithumb, one of the most popular cryptocurrency exchanges in the world and the second biggest cryptocurrency exchange in South Korea, has announced its plans to launch a decentralized cryptocurrency exchange (DEX) later this year. This exchange is expected to launch as an overseas subsidiary of Bithumb which will be based outside of South Korea, reports from a South Korean business publication revealed.
(Recommended Reading: What is a Decentralized Exchange (DEX)?)
The Bithumb Decentralized Exchange is being developed by Bithumb in partnership with One Root Network (RNT). The company had launched another decentralized network exchange this year. Bithumb’s plan with this Decentralized platform is to expand into the international markets and a mid-term plan has already been prepared.
Interestingly, this move from Bithumb comes just a few months after Binance, the largest cryptocurrency exchange in the world announced that they are going to launch a Decentralized Exchange by early 2019. It will be interesting to see giants of the crypto-world go head to head in this direction. In addition to Binance and Bithumb, South Korea-based Upbit had also recently invested into the decentralized platform ‘Allbit’.
“Bithumb is one of the leading global exchanges in terms of transactions but it is true that most of its users are Korean. The latest decision seems to be the company’s strategy to compete with other leading exchanges in the global market by opening a decentralized exchange that receives attention in the global market.”
Many in the cryptocurrency community, including Binance CEO Changpeng Zhao believe that decentralized exchanges are the future of cryptocurrency trade. However, they are a trend which are yet to catch up with a significant number of traders. The basic idea behind a decentralized platform is that while in a centralized system, the exchange acts as a middleman that charges fees for every transaction, there are no middlemen-like third parties involved on a decentralized platform.
The Binance CEO had commented on DEX platforms, saying:
“I believe that decentralized exchange is the future. I don’t know when that future will come yet. I think we’re at an early stage for that so I don’t know if it’s a year, two years, three years, or five years. I don’t know but we got to be ready for it,”
Moreover, decentralized platforms are also considered more secure than regular cryptocurrency exchanges because the funds are not stored with the exchange in this case. While the trading speed can be relatively slower on a decentralized platform, most traders join these platforms for a higher security as well as lower fees.
In the first half of 2018, Bithumb made $270 Million in revenue and $194 Million in operating profit. It has been a slow year for the exchange. Bithumb was also served with a $28 Million notice for tax evasion but was cleared later on after the investigation. Bithumb has also been associated with hacking attacks as the platform has lost millions of dollars in hacks - a problem that DEX platforms can solve!