The Rise of Decentralized Exchanges and the Importance of the 0x Project (ZRX)
One of the main impediments to the widespread adoption of cryptocurrency investing is the belief that the current crop of exchanges are lacking the kind of security that people have come to expect from banks and traditional investment accounts.
A small but significant number of high profile hacks and thefts from major cryptocurrency exchanges have kept this security concern at the forefront in the public’s understanding and awareness of cryptocurrencies and blockchain technology.
Upcoming decentralized exchanges, however, promise to address these security concerns while also addressing the issues that centralized exchanges were established to deal with in the first place.
Decentralized exchanges, such as the 0x Project, and the coins that are integral to their functioning, such as 0x Project’s ZRX, are set to dominate the future of cryptocurrency exchanges and asset transfers in general.
To Centralize or Decentralize?
One of the largest and most glaring inconsistencies in the blockchain and cryptocurrency space is the need for centralized exchanges to govern the transfer of what were intended to be a decentralized form of currency.
While cryptocurrencies could always nominally be transacted in a decentralized manner, the state of blockchain technology at the time meant that this process would be slow and costly. Therefore, centralized exchanges were developed to overcome these drawbacks to the state of decentralization and allow cryptocurrency investors the kind of user interface that they were accustomed to from more traditional investment platforms.
The high profile hacking events and the on-going concern over the ‘front-running’ of orders, however, have ensured that there remains a steady demand for the true decentralization of cryptocurrency investing.
The Future of Cryptocurrency Investing Is Now
The state of blockchain technology has finally caught up to the demand for cryptocurrency investing with the development of major decentralized exchanges.
One of the most promising stars of these rising decentralized exchanges, the 0x Project, uses a protocol where additional information to a transaction is processed in an alternate system outside of the underlying blockchain (0x Project uses the Ethereum Smart Contract system), while only the actual transaction itself is processed by the underlying blockchain.
The 0x Project system dramatically reduces the load as the protocol provides the high quality user interface that modern investors expect, while ensuring that the actual transactions are performed in a decentralized manner free from the security concerns that plague the current crop of centralized exchanges.
0x Project’s Revolutionary Protocol and ZRX
ZRX is the payment that the facilitators of 0x Project’s protocol receive for processing the additional information to the underlying blockchain transaction.
Therefore, as decentralized exchanges come to dominate the world of cryptocurrency investing, ZRX and similar coins will become some of the biggest names in the blockchain and cryptocurrency space.
2019 promises to be a heady year of changes for blockchain technology and cryptocurrencies in general, and this rapid transformation of cryptocurrency exchanges from centralized to decentralized will be one of the driving stories in the year ahead and beyond.
ZRX is poised to dramatically increase in value as the 0x Project becomes one of the dominant protocols for these game-changing decentralized cryptocurrency exchanges.
Disclaimer: The author of this article does not currently invest in cryptocurrencies so that they can offer an unbiased perspective on the contemporary blockchain and cryptocurrency space.