Huobi believes in a decentralized future, crypto baskets are gaining popularity and 68% of cryptocurrency exchanges are not fully KYC compliant.
Huobi has plans to become a decentralized autonomous organization
The exact timeframe of migration is still unknown, but the development of the Huobi Chain project will be gradual and will have 10 milestones to complete. As the whole project will be open-sourced, everyone interested in aiding its development will be able to join at any stage.
Are we seeing a new dawn of decentralization? We have seen some elements, or it would be better to say, concepts of real use for decentralized applications or services. But the main gate to blockchain, the crypto world, and exchanges, is that they were always centralized. Of course, there are some exceptions, but exchanges such as EtherDelta are slow and very expensive to use, because you have to pay for every action, placing, or even canceling, the order.
Also, they lack the volume usually needed for big exchanges. But Huobi and Binance moving onto blockchain is another thing. In the process of migration, they have to solve multiple problems as it requires a much faster blockchain than all preexisting ones.
Supporting these volumes of more than $1 billion per day will be a giant step as it will show everyone that decentralization is a possible model for a working business. It may fail, though, but at least they should try it.
Crypto baskets are becoming more and more popular in 2018
Coinbase, Huobi and Okex already offer them to investors. Now, even smaller services are starting to offer them, making available a wide selection of baskets containing various coins and tokens.
We aren’t saying that baskets and ETFs are a bad thing. But these are the niche products for lazy or busy investors who don’t have time or are going to dig further. The most basic one, offered by Coinbase, comprises the coins with the biggest market cap.
The only way to make profit by buying such baskets is to pray that the whole market cap rises, otherwise you will lose money. All these big coins are still pegged to BTC, more or less. Baskets containing various tokens are a different thing. Their value can grow more as sometimes some tokens can inflate irrationally. But it’s better to choose them manually.
Trusting your money to some third party is generally a bad idea, and, in this case, you can’t control how this basket will perform. To choose a basket you have to understand the fundamentals of the tokens that it contains, and if you understand the tokens, why not buy them separately?
A recent study shows that 68% of exchanges and wallets aren’t bothered to do any KYC check
It makes money laundering much easier for all sorts of criminals.
When we talk about KYC (know-your-customer), it’s worth mentioning that the crypto sphere was totally anonymous at first. No identifications or documents were needed to enter the market.
Moreover, the situation changed a lot after regulations had kicked in. But the industry is still basically the same. Big exchanges are forced to cooperate to have permissions to work legally, but all small exchanges are still living in old times.
Concerning money laundering: it was proven that less than 1% of all transactions in Bitcoin network involve laundering. The study was published in January 2018 by the FDD. There is no point in mentioning money laundering anymore. It looks like this problem isn’t as big as some people imagine it to be.