Updated: Apr 4
What Is a Decentralized Market?
In a decentralized market, technology enables investors to deal directly with each other instead of operating from within a centralized exchange. Virtual markets that use decentralized currency, or cryptocurrencies, are examples of decentralized markets.
How Do Decentralized Markets Work?
A decentralized market uses various digital devices to communicate and display bid/ask prices in real-time. In this way, buyers, sellers, and dealers do not need to be located in the same place to transact securities.
Examples of Decentralized Markets
The foreign exchange (forex) market is an example of a decentralized market because there is no one physical location where investors go to buy and sell currencies. Forex traders can use the internet to check the quotes of currencies from various dealers from the world.
Real estate is traditionally sold through a decentralized market, wherein buyers and sellers complete their transactions without first funneling the process through a clearinghouse.