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Centralized vs. decentralized crypto exchanges—which should you choose?
Understanding CEX and DEX.
Written byAllie Grace Garnett
Fact-checked byDoug Ashburn
Article History
Photo illustration: Tinker toys arranged in a hub
Do you want to connect to the crypto hub, or be your own spoke?
© tendo23/stock.adobe.com; Photo illustration Encyclopædia Britannica, Inc.
Are you buying, selling, or trading cryptocurrencies? You’re probably using a cryptocurrency exchange to complete your transactions. These exchanges are either centralized or decentralized—a core design choice that affects almost every part of your trading experience.
Decentralized exchanges—like the blockchain technology on which they’re built—rely on consensus mechanisms, with data distributed across users. But centralized exchanges are undeniably more accessible. Which should you choose? The decision is about trade-offs—and priorities.
Key Points
Centralized exchanges are the easiest to use, but perhaps least secure.
Decentralized exchanges afford the most security and privacy.
You can use a mix of both types of exchanges.
Crypto exchange types: Summary table
Before deciding which type of exchange you would like to use, you’ll need to assess not only your needs, but also your personal “crypto philosophy.” For example, do you trust your crypto assets with a single entity, or are you fully on board with the distributed nature of blockchain technology? Do you plan to trade a few of the top cryptocurrencies, or would you like access to thousands? And what about privacy, security, and platform transparency?
The following table summarizes the many criteria to consider. Take a look, then keep reading for a deeper explanation of each factor to help you decide.
Exchange type Centralized Decentralized
Controlling entity or system Single entity Distributed system
Range of crypto offerings Moderate High to moderate