#CEXvsDEX101

What is a Centralized Exchange (CEX)?

A centralized exchange is a trading platform that acts as an intermediary between buyers and sellers in the cryptocurrency market. It takes orders, manages user accounts, and controls private keys.

CEXs are popular among cryptocurrency newcomers because they manage the entire transaction process, providing a fast and simple user experience.

Users of centralized exchanges rely solely on CEX security protocols to protect their assets. While most exchanges use excellent security measures, they are often the target of large-scale hacking attacks. This is why you should store your funds in a personal wallet to protect them from such intrusions.

What is a Decentralized Exchange (DEX)?

A decentralized exchange is a peer-to-peer trading platform where you can trade cryptocurrencies directly with other users, bypassing the middleman.

A DEX can be considered a more independent option compared to a CEX. Unlike a CEX, they do not store users’ funds or private keys.