#CEXvsDEX101

"CEX vs DEX 101" is a basic topic to explain the essential differences between two main types of cryptocurrency exchanges: centralized exchanges (CEX) and decentralized exchanges (DEX).

What is CEX (Centralized Exchange)?

* Definition: It is a traditional cryptocurrency exchange that acts as an intermediary between buyers and sellers. It is managed and controlled by a central entity (company).

* How does it work? When you deposit your funds in a CEX, you grant the exchange custody of your assets. It manages the order books and facilitates transactions.

* Examples: Binance, Coinbase, Kraken, Bybit.

* Advantages: Ease of use: Simple and familiar user interfaces, making it ideal for beginners.

High liquidity: Typically has a large user base and high trading volumes, which means it can execute large trades quickly.

Support for fiat currencies: Usually allows for deposits and withdrawals of fiat currencies (like USD or EUR).

* Advanced trading features: Often provides advanced trading tools like margin trading and derivatives.

* Customer support: Customer support is available to help users resolve issues.

* Disadvantages:

* Custody of assets: You do not own your private keys, meaning the exchange controls your funds. If the exchange is hacked or goes bankrupt, you may lose your assets.

* Compliance with regulations (KYC/AML): Requires you to complete Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures, meaning you must disclose your personal information.