South Korea's government spent weeks denying rumors of a cryptocurrency trading ban, but the real scandal involved people inside the Financial Supervisory Commission. These officials had watched the J
South Korea's government spent weeks denying rumors of a cryptocurrency trading ban, but the real scandal involved people inside the Financial Supervisory Commission. These officials had watched the Justice Minister prepare a statement about the crackdown. Minutes before he spoke, they sold their bitcoin. After the price dropped, they bought back in. The market crashed anyway, fueled by the initial panic.
Bitcoin and Ethereum were designed to eliminate the middleman from financial transactions. No banks. No government watchdogs. No intermediaries at all. Yet most people trading crypto use centralized exchanges like Coinbase and Binance, which depend on those intermediaries.
Decentralized exchanges could change that. They'd let traders swap digital assets without any authority controlling the order books. The problem has been scale. Public blockchains can't handle the volume. Ethereum processes more transactions than every other blockchain combined. Its capacity reaches about 1.3 million transactions total.
0x Protocol offers a different approach. The protocol settles trades off the blockchain itself, storing the actual ownership change on-chain but handling the matching and negotiation elsewhere. Radar Relay, a decentralized exchange built on 0x, has processed millions of dollars in trades over the past week using this method.
Longer-term fixes exist. Vitalik Buterin, who created Ethereum, and Joseph Poon, a Lightning Network co-author, proposed Plasma, which would let Ethereum handle tens of millions of transactions. Other approaches include Sharding and Casper, a transition to proof-of-stake validation.
Implementing these takes time. Buterin said in an interview with Joong Ang, a South Korean newspaper, that "I would say two to five [years to fully scale Ethereum], with early prototypes in one year. The various scaling solutions, including sharding, plasma and various state channel systems such as Raiden and Perun, are already quite well thought out, and development has already started. Raiden is the earliest, and its developer preview release is out already."
Until then, projects rely on these stopgap solutions. An MIT professor and vice president at the Digital Currency Group saw promise in Radar Relay's results. "I was skeptical of decentralized exchanges, but Radar Relay is starting to prove me wrong. $2 million traded in last 24 hours, all facilitated via 0x Protocol," he tweeted.
