The Pillars of Trust: How Long-Standing Centralized Exchanges Stay Competitive
The Web3 industry constantly evolves, bringing new ideas, projects, crypto assets, and concepts into our world. The speed of change in the blockchain sector is astonishing: blink for a moment, and new trends are already rushing past you.
However, there are areas where changes happen more slowly, and users often prefer to trust old, proven projects rather than the latest ventures. This is especially true in the world of CEX (centralized) exchanges, where newcomers face huge challenges competing for audience attention and staying competitive with established giants.
In today’s article, Coinmooner focused on three of the oldest and most respected centralized exchanges that have managed to carve out their niche and become leaders in their field. These platforms are still well-known to many and retain significant influence in the cryptocurrency world. Let’s dive into their success stories and discover what contributes to their longevity and popularity.
KRAKEN
Kraken is the first on our list that Coinmooner wants to talk about. It's one of the world's earliest and largest centralized cryptocurrency exchanges, founded by Jesse Powell in 2011. Inspired by the collapse of Mt. Gox, Powell aimed to create a reliable platform for cryptocurrency trading. From the start, Kraken focused on ensuring high standards of security and reliability, which became a critical factor in its success.
The exchange began by offering trading pairs that included Bitcoin and a few fiat currencies, such as the euro and US dollar. In 2013, Kraken launched Bitcoin trading on its platform, giving it an extra boost in growth. It was one of the first exchanges to offer margin trading, allowing users to trade with borrowed funds, which attracted serious investors.
An interesting fact is that Kraken regularly introduces innovative technologies and features for its users. For example, in 2016, the exchange offered unique trading and analysis tools, like advanced charts and tools for algorithmic trading. Kraken is also known for its high-security level, including using cold storage for funds and two-factor authentication.
The exchange is also actively involved in legal and regulatory initiatives, aiming to comply with the requirements of different jurisdictions and ensure transparency in its operations. Kraken continues to expand and attract users with its innovative solutions and high-quality service, strengthening its position in the cryptocurrency market.
BITFINEX
Next on the list of centralized exchanges in the Web3 industry that the Coinmooner team wants to talk about is Bitfinex. This exchange is one of the oldest and most well-known cryptocurrency exchanges, founded in 2012. It was created in Hong Kong by anonymous developers to provide an advanced platform for cryptocurrency trading. Since its founding, Bitfinex has established itself as a leading platform thanks to its functionality and trading volume.
One key factor in Bitfinex's success was the introduction of margin trading and leverage, which allowed traders to take positions and increase their trading capabilities. The exchange also offered many trading pairs, including Bitcoin and Ethereum as well as other altcoins, attracting a diverse user base.
In 2016, Bitfinex suffered a significant hack, during which about 120,000 bitcoins were stolen. This incident significantly impacted the exchange's reputation, but Bitfinex recovered from the attack and implemented several enhanced security measures. An essential step in regaining trust was creating a compensation system for affected users and strengthening fund protection measures.
Bitfinex is also known for its "BFX tokens," which are used to compensate for losses after the hack. Additionally, the exchange actively introduces innovative technologies and services, such as cryptocurrency staking, and develops solutions to increase liquidity and improve the user experience. In recent years, Bitfinex has continued to grow and adapt to the changing cryptocurrency market, maintaining its reputation as one of the world's leading exchanges.
COINBASE
Last on our list from Coinmooner, perhaps the most renowned among the exchanges we've mentioned in this article and a global leader, is Coinbase. This exchange is one of the world's most famous and prominent cryptocurrency exchanges. It was founded in 2012 by Brian Armstrong and Fred Ehrsam in San Francisco. The exchange was created to make it easier for everyday users to access cryptocurrencies by providing a simple and secure platform for buying, selling, and storing digital assets.
One of Coinbase's significant achievements is its focus on user convenience. The exchange offered an intuitive interface and easy ways to buy cryptocurrencies, making it especially popular among beginners. In 2014, Coinbasel aunched Coinbase Pro (formerly known as GDAX), offering more advanced tools for professional traders, including charts and enhanced order features.
The company also gained attention for its emphasis on regulatory compliance. Coinbase actively works with regulators in different countries, helping ensure high security standards and compliance with local laws. In 2021, the exchange became the first significant cryptocurrency platform to go public on the U.S. stock market through a direct listing on NASDAQ, marking a milestone event for the crypto industry.
Coinbase offers a wide range of services, including cryptocurrency staking, earning interest on account balances, and integration with various DeFi services. The exchange also actively develops and introduces new features and products to meet the needs of both novice and experienced users, and supports a wide variety of cryptocurrencies and tokens for trading.
As you can see, many exchanges have ceased to exist since then. However, the three exchanges mentioned by the Coinmooner in this article continue to operate successfully and hold strong positions in this ever-changing financial sector. For our part, we will closely monitor all changes in the Web3 space and other related areas and will do our best to promptly inform our valued readers of the most significant events.
It is also important to remind you of a critical aspect of the crypto industry: decentralization is in full swing. Despite centralized exchanges (CEX), other areas, such as decentralized exchanges (DEX), should also be considered. Though DEXs outnumber CEXs, they require a cautious approach. Remembering that this industry is still filled with scammers, it is essential to stay vigilant and use the latest security measures to protect your finances and personal information.
