I have no experience in directly dealing with decentralized exchanges but I see several things that I would like to address (that in fact ties in with any place where you trade):

That's why you use common sense and avoid shady coins.

Aside from that, the idea of decentralized exchange is like the idea of cryptocurrencies: you have to keep trying to come up with that one mechanism that works and has the least issues possible.

New altcoins will be like a miracle for decentralized exchanges and all the people around the world. 

Your question is "How will people get any money in the first place that can be used on the exchanges?"

Solo mine any new altcoin, trade it for another relatively cheap coin, trade that for doge, trade that for ltc, trade that for btc.

Or just accept bitcoin for your own goods and services in the real world, and use that to enter the exchange.  Maybe you'll buy a cheap new altcoin from a homeless street child in India who has an hour a day at an internet cafe.

a decentralized exchange could by definition have no central bank account where one would be able to send fiat $ to and thus could not hold any balance of fiat currency as i understand it ... i would imagine it would somehow have to involve users attaching their individual bank accounts to the decentralized exchange ledger and sending money directly from one person's bank account to the other person's bank account in exchange for btc on the ledger of the exchange , while the btc sent to the decentralized exchange could be run off of a side chain connected to the btc blockchain ? ... at least as far as i understand the idea in any case it seems like it would be awfully clumsy and slower vs a centralized exchange ... more like a p2p marketplace capable of running a balance sheet with built in escrow-style delay assuring buyers can't buy 1000btc from a $0 bank account and sellers wouldn't be able to sell false btc because it could be based off of the btc blockchain ? ... in theory ...

There's BitUSD (market pegged asset) available in BitShares (first decentralized exchange).
Either you get BitUSD on a centralized exchange and move it into the BitShares blockchain, or you can trade BTS, BitBTC (the market pegged BTC), BitCNY, BitEUR, BitGOLD, BitSILVER for BitUSD.

Some markets are low liquidity though.

The gateways are being setup where you can get an IOU for your USD and trade with it in BitShares exchange (just like IOUs issued by a centralized exchange). However, if the gateway is busted, so are your IOUs.


In BitShares you can easily issue a UIA (user issued asset) and if you provide a gateway/bridge to another coin blockchain, I think, you can easily 'add' any coin.


It is the free market: do your own research.


I'm sure there are lots of other issues with decentralized approach (scalability etc).
it would be interesting to see how they develop.

Why would 2 day altcoins be added to a DEX if they are "always a headache" ?

they say the same thing about a decentralised finance system, yet we see the beginning in bitcoin

A decentralized exchange with a proper gateway can help with legal compliance around the world.

See: http://bytemaster.bitshares.org/update/2014/12/18/Benefits-of-Being-a-BitShares-Gateway/

I'm glad the OP gets it, central banks are a monopoly on currency, they will never allow a decentralised system to properly take place, if they do, I'd think something is up and chances are they'll use it as a way to keep track of lots of people trying to use any exchange they're allowing into their economy.

That Gateway thing is a honeytrap. It kills the decentralization and requires trust.

U r correct indeed. None of BitSquare, OpenBazaar or BitShares have been able to overcome the problem of trust. Some tried escrow, some tried multiple centralized gateways. But at the end of the day, to get FIAT on board u need some centralization.