The Need for New Crypto Exchange Types
Bitcoin network started more than 10 years ago. It’s original goals and values where using cryptography to achieve a better form of money with no inflation, no government interference, no money seizure, more privacy, etc.
Now after all these years and many achievements, there is a reverse trend going on. Crypto exchanges identify all their users, ask for all the information they might ever need in future, so there is no privacy here. Your money at any exchange service could get seized, because of a court order or a powerful authority’s request. After all, governments are taking the control back, by controlling crypto exchanges.
This trend is going to have a bad effect on Bitcoin and other cryptocurrencies in the near future. Losing some of their values, cryptocurrencies might not be desirable any more in the near future, ultimately being not desirable anymore. We need to change this trend. We have to stand against these rules and regulations.
Nowadays, exchange services are very central, taking customers money in fiat currency on one hand, and give them back an account on their service in crypto currency on the other hand. Since they are touching fiat currency, they are forced by regulators around the world to have KYC (Know Your Customer) and AML (Anti Money Laundry) regulations, in effect identifying every one of their customers.
This touching of fiat currency is the root of the problem. Even though this process makes crypto exchanges a lot faster with a lot bigger market, it forces them to touch fiat currencies, and then they are forced to identify their customers, and then they are forced to abide seizure requests by different parties, and also filter their service for certain customers. In this process, governments have taken back their interference and control, money can be seized, privacy is ruined, and we are mostly back to square one.
This trend can’t be stopped easily. Most of the crypto exchanges these days want the big market, so they identify their users, and new exchanges follow them too. The future is not bright for crypto currencies.
However, there is another form of crypto exchanges. They don’t take fiat currency directly from their customers. Instead, they create a platform for their users, and in that platform, buyers and sellers can find each other and directly trade with each other, and the crypto exchange only escrows the cryptocurrency to provide safety for both parties, preventing either party from taking the money and run away.
These exchanges can implement KYC rules and identify their users, if they want. Some of them are currently doing this. But it is not a requirement. No one can block their bank account, because there is no bank account. The rules for KYC and AML are for fiat currencies. A crypto exchange can forego touching fiat currency, opt for a smaller market share, and bypass these requirements. This will help the cryptocurrency ecosystem in the long run, keeping the original values.
That’s why we have decided to do exactly this. We, the KeepChange.io team, created a crypto exchange service, for people to use, and we don’t touch fiat currency now or in future. We chose the smaller market, to provide more privacy and more control for our end users. We don’t identify our customers. We don’t store their private data. We have a distributed infrastructure around the world, to prevent a single government from controlling us.
However, with only one crypto exchange, this trend can’t be reversed. Many more exchanges should also choose this or similar paths for a more brighter future.
