Cryptocurrency exchanges deposit system: how to trade without losing your shirt?
When someone first gets acquainted with cryptocurrency a list of frequently asked questions he or she goes through immediately includes : How do I buy it? Who accepts it? What can I buy with it? And, of course, how can I store it? The latter question is a big issue not only for beginners.
There are five possible options to store your coins: on hardware key, on server, on working computer, on cloud service or on the exchange. Exchange has maximum convenience and maximum effectiveness, therefore, it is the optimal choice for traders, despite the fact that it is also the most risky option. The median lifetime of a cryptocurrency exchange is 381 days, and the failure rate is as high as 45%.
There are several reasons why exchanges fail: security breaches, caused either by hackers or other criminal activity, or new regulations introduced by the government. Everyone remembers the cases of Mt.Gox or Mintpal, which left hundreds of thousands of people without money and without any chance for compensation.
Nowadays the volume of transactions on cryptocurrency exchanges is measured in billions of dollars. However, they are generally not subjected to any regulations, do not conduct audit and do not bear responsibility for the safety of users’ funds.
Obviously, the positive industry dynamics require a new solution. That is what Exscudo offers – a solution which combines deposits and wallets of the users, making trading simple and secure.
Exscudo exchange is not involved in deposit storage, deposits are stored in users’ wallets based on EON blockchain. Imagine, user A and user B have their money stored in their Exscudo wallets. User A wants to sell 1 BTC and user B wants to buy it. All they need is to signal they are ready to exchange, and Exscudo exchange will then enable the transaction. During the exchange process user A sends half of his/her key to the exchange and user B does the same. Until the users are ready to exchange Exscudo exchange cannot withdraw anything from their wallets and does not take responsibility for their funds: it plays a role of an escrow agent who signes the transaction and guarantees the swap. It does not guarantee the deposit safety as the deposit safety is guaranteed by EON blockchain.
So, as a storage option, Exscudo deposit system has maximum safety, maximum convenience and maximum effectiveness. Indeed, it is a revolutionary solution.