#中心化与去中心化交易所 Cryptocurrency Newcomers Must Read! What is the Essential Difference Between Centralized and Decentralized Exchanges?

1. Who is Behind the Operation?

Centralized Exchanges (CEX) like Binance and Coinbase are managed by companies, requiring you to deposit your coins into a platform account, with trades facilitated by the platform. You can directly buy coins with fiat currency, offering many functions like a "cryptocurrency supermarket";

Decentralized Exchanges (DEX) such as Uniswap have no company control and operate solely on blockchain smart contracts, keeping your coins in your own wallet. Transaction records are on-chain and cannot be altered by anyone.

2. Who Actually Holds the Money?

In a CEX, your coins are held by the platform, which manages the private keys. This is easy for newcomers, but if the platform is hacked (like Mt. Gox) or runs away, the coins are lost;

In a DEX, you completely control the private keys, and the platform cannot access your assets. However, if you lose your private keys, even a god cannot help you recover them, which is not very friendly for newcomers.

3. Is Real-Name Registration Required?

CEX requires real-name registration (KYC), uploading your ID is basic operation, complying with regulations but may face blanket policies (like trading bans in China);

DEX does not require real-name registration, allowing for anonymous trading, but countries like the USA are starting to regulate, so be careful of compliance risks.

4. Where is the Trading Experience Lacking?

CEX offers fast speed and full features (leveraging, contracts, etc.), with customer service to help you solve issues, suitable for newcomers wanting to trade quickly;

DEX trading speed depends on the blockchain's "traffic conditions" (like high Ethereum Gas fees), large transactions may experience significant price fluctuations, making it more suitable for experienced players engaged in DeFi or seeking privacy.

5. How to Prevent Security Risks?

CEX fears platforms engaging in shady practices (like FTX misappropriating funds) or being targeted by hackers, but large platforms will use cold wallets for protection;

DEX fears vulnerabilities in smart contracts (coding errors leading to fund pool theft) or phishing links tricking you into authorizing your wallet, relying entirely on reliable technology for security.

Summary: Choose the Right Tools to Avoid Pitfalls!

• Newcomers/In a Hurry to Trade: Choose CEX (but don’t store too many coins!)

• Experienced Players/Engaged in DeFi: Choose DEX (treat your private keys like your lifeline!)

• Large Transactions: CEX has better liquidity; Small Transactions/Seeking Decentralization: Choose DEX

Do you usually use CEX or DEX? What pitfalls have you encountered? Let's chat in the comments! If you find this useful, share it with your cryptocurrency friends, like and follow to help you avoid more traps!