Counterparty DEX Review
What is Counterparty DEX?
Counterparty claims to extend Bitcoin’s functionality by “writing in the margins” of regular Bitcoin transactions. This allegedly opens the door for innovation and advanced features not previously available with ordinary Bitcoin software.
According to Counterparty, the Counterparty protocol is open source and extensively tested. The exchange allows users to create and trade any kind of digital token. Furthermore, the exchange enables anyone to write Smart Contracts and execute them on the Bitcoin blockchain. By using Bitcoin’s decentralized ledger network and Counterparty’s built-in scripting language, real-world scenarios can now be transformed into code and executed automatically with no need for an intermediary.
How Does Counterparty DEX Work?
The exchange graphically presents how it works on its website, like this:
General Information on DEXs
Counterparty DEX is a so called “decentralized exchange”. Decentralized exchanges are becoming increasingly more popular. They are definitely gaining market shares against their centralized counterparts.
Decentralized exchanges do not require a third party to store your funds. Instead, you directly control your coins and you conduct transactions directly with whoever wants to buy or sell your coins. However, decentralized exchanges as opposed to regular top crypto exchanges normally have an order book with lower liquidity than the regular top crypto exchanges.
US-investors may trade on Counterparty DEX.
Counterparty DEX Trading View
Different exchanges have different trading views. And there is no “this overview is the best”-view. You should yourself determine which trading view that suits you the best. What the views normally have in common is that they all show the order book or at least part of the order book, a price chart of the chosen cryptocurrency and order history. They normally also have buy and sell-boxes. Before you choose an exchange, try to have a look at the trading view so that you can ascertain that it feels right to you. The below is a picture of the trading view at Counterparty DEX:
Counterparty DEX Fees
The most important lesson to learn when it comes to picking the best cryptocurrency exchange site is that you must always check the fees. We have not been able to find Counterparty DEX’s trading fees. This is potentially a risk for you as an investor. If the exchange does not inform of the trading fees, there is a higher risk that they are high. Accordingly, we strongly urge you to make your own analysis of the trading fees at Counterparty DEX before depositing any funds at Counterparty DEX and before concluding that Counterparty DEX is the best cryptocurrency exchange site for you.
Counterparty DEX does not accept any other deposit method than cryptocurrencies, so new crypto investors are restricted from trading here. If you don’t have any crypto but want to start trading here, you will first have to purchase cryptocurrencies from another exchange and then, as a second step, deposit them here.
Counterparty DEX Security
The servers of decentralized exchanges normally spread out across the globe. This is different from centralized exchanges that normally have their servers more concentrated. This spread-out of servers leads to a lower risk of server downtime and also means that decentralized exchanges are virtually immune to attacks. This is because if you take out one of the servers, it makes little to no difference for the network of servers in its entirety. However, if you manage to get into a server at a centralized exchange, you can do a lot more harm.
Also, if you make a trade at a decentralized exchange, the exchange itself never touches your assets. Accordingly, even if a hacker would somehow be able to hack the exchange (in spite of the above), the hacker can not access your assets. If you make a trade at a centralized exchange, however, you normally hold assets at that exchange until you withdraw them to your private wallet. A hacker can therefore hack a centralized exchange and steal your funds held at such exchange. That's not possible in the same way when the hacker target is a DEX.