When the advancement of the internet and deregulation opened the forex markets to anyone with a credit card and an internet connection, global forex trading exploded. What was once the preserve of big financial institutions and professional traders only, within just a few years became a multi-trillion dollar a day industry. People, from all walks of life, from all around the world were sucked into the online trading world.
Yet, with crypto almost a decade old and the number of exchanges growing weekly, the take up in crypto trading has been no way near the level of forex trading. This is surprising, as the low fee crypto trading and its low visibility to regulatory authorities, should make crypto trading far more popular than the heavily legislated and high-fee traditional forex trading. However, a number of factors have been holding back crypto trading general.
Of course, the volatility seen has been a major factor in the reluctance of crypto exchange usage. The extreme volatility seen in 2017 and 2019 has been putting people off trading cryptocurrencies altogether. Whilst such wild fluctuations may suit the hardier investor, for the everyday trader, volatility increases the chances of losses. And who wants those?
Security has been and continues to be an issue for crypto exchanges. Despite increased levels of security, we are still seeing major exchanges getting hacked. Just last week, Japanese cryptocurrency exchange Bitpoint was hacked, with $32 million worth of tokens stolen.
Reliability has been another issue. The blockchain technology the exchanges are fueled on are still relatively new and in constant development and improvement. Downtime has been an issue for many exchanges, especially during high volume periods. Database management has become a pressing issue for crypto exchanges.
One exchange, CoreDax, adopted the Altibase open-source database technology at the start of this year. The Korean exchange created by Neoframe sought the services of Altibase.com in order to gain its competitive edge by providing a stable, secure and robust database management system with zero downtime. The CoreDax case study is just one example of crypto exchanges are going to have to evolve in order to survive. The public trust in exchanges has been badly damaged by the ongoing series of hacks and database management issues which can result in exchange, downtime, only compound the distrust. Exchanges may not be able to do anything about crypto volatility but solving safety and reliability issues are well within exchanges capabilities and should be a priority for any crypto exchange hoping for long term viability.
