#CEXvsDEX101
**Centralized Exchanges (CEXs) like Binance, Kraken, or Coinbase are popular entry points for crypto beginners.** They offer significant advantages: **high liquidity** ensures easier buying and selling, **fast trade execution** leverages sophisticated infrastructure, and **user-friendly interfaces** simplify navigation. These features create a smooth onboarding experience.
**However, this convenience comes with a critical trade-off: trust.** CEXs are **custodial platforms**, meaning they hold users' assets. This reliance on a **third party introduces inherent risks.** If the exchange suffers a **security breach** (hack), experiences **technical failures**, faces **regulatory shutdowns**, or encounters **insolvency issues**, **your funds could be compromised or inaccessible.** Ultimately, **you surrender direct control**โyour assets are not truly in your possession while held on the platform, representing a fundamental vulnerability compared to self-custody solutions. ๐ก๏ธ
