#CEXvsDEX101

#CEXvsDEX101 – The Difference Between Centralized and Decentralized Platforms

In the world of cryptocurrencies, trading platforms are divided into two main types: Centralized Exchanges (CEX) and Decentralized Exchanges (DEX). Each type has its advantages and challenges, and here’s a quick comparison to understand the differences:

1. Centralized Exchanges (CEX): Like Binance and Coinbase. They rely on an intermediary that manages orders and holds users' funds. They offer high liquidity and fast execution, and they are easy to use, especially for beginners. However, they require trust in the operating entity, making them susceptible to hacking or regulatory freezes.

2. Decentralized Exchanges (DEX): Like Uniswap and PancakeSwap. There is no intermediary; trading is done directly between users via smart contracts. They give users full control over their funds and privacy, but they are often less liquid and more challenging in terms of interface and security for new users.

The choice between CEX and DEX depends on what you prefer: security and control (DEX), or speed and ease (CEX). Some traders combine both to take advantage of the benefits of each type.

Understanding the difference between them is a fundamental step for anyone entering the cryptocurrency market.