Bittrex, Coinbase, Kraken and Poloniex -- all of them are centralized exchanges where we use to buy and trade tokens. But what about “decentralized exchanges” and when do they come in?

Some examples of the well-known decentralized exchanges include: x Protocol, Airswap, and OmiseGO.

Let's look at the advantages of such exchanges:

You are not required to trust the security or honesty of the exchange since the funds are held by you in your personal wallet and not by a third party.

Users are not required to disclose their personal details to anyone, except if the exchange method involves bank transfers. In this case your identity is revealed only to the person that is selling or buying from you. Furthermore, the hosting of decentralized exchanges is distributed through nodes meaning that there is no risk of server downtime.

No middle-man or monopoly to create fees or pricing power respectively. Insane withdrawal fees are likely a thing of the past. Exchanges will instead only take an amount from the trade as with current centralized exchanges, but overall costs should be lower.

Decentralized exchanges, however, are a bit more difficult to use. Most people who use them are experienced in the world of buying and selling . These exchanges are becoming more popular and stay true to the concept of Bitcoin and blockchain: Bitcoin, and many cryptokens, are decentralized currencies.

Having decentralized exchanges is a MUST for the simple reason: today's centralized exchanges are becoming just another extension of banks and subject to all sorts of regulatory schemes.