#CEXvsDEX101 If you are just starting to understand cryptocurrencies, one of the first questions you will encounter is where to trade? The choice usually comes down to two types of platforms: centralized exchanges (CEX) and decentralized exchanges (DEX). In this article, we will figure out what they are, how they differ, and what their pros and cons are.
What is CEX?
CEX (Centralized Exchange) is a centralized cryptocurrency exchange managed by a company. It acts as an intermediary between buyers and sellers. Examples of popular CEX: Binance, Bybit, OKX, KuCoin, Bitget, Gate.io, and others.
How CEX works:
• You create an account and go through verification (KYC).
• Deposit fiat money or cryptocurrency.
• You trade through an order book — the exchange finds you counterparties.
• All transactions are processed within the exchange system.
Advantages of CEX:
✔ User-friendly interface
✔ High liquidity and transaction speed
✔ Support for multiple assets
✔ Ability to deposit/withdraw fiat
✔ Support and technical support
Disadvantages of CEX:
✖ Centralization = third-party control
✖ You do not own your funds (not your keys — not your crypto)
✖ Risks of hacks, account freezes, or scams from the exchange
What is DEX?
DEX (Decentralized Exchange) is a decentralized exchange that operates through smart contracts. It does not require registration or intermediaries — you connect to the platform directly through your crypto wallet. Examples: Uniswap, PancakeSwap, 1inch, dYdX, SushiSwap.
How DEX works:
• You connect your wallet (for example, MetaMask).
• The exchange is conducted through a smart contract, most often using liquidity pools.
• You always control your funds.
Advantages of DEX:
✔ Full control over your assets
✔ Anonymity — no KYC required
✔ Lower fees (in some cases)
✔ Security — no single point of failure
Disadvantages of DEX:
✖ Less user-friendly interface for beginners
✖ Dependence on network load and gas fees
✖ Limited liquidity on small tokens
✖ No support for fiat currencies
Comparison table
What to choose: CEX or DEX?
If you are a beginner, want to top up your account in dollars or hryvnias, start with CEX.
If you value anonymity, do not want to go through KYC, and want to control your funds — try DEX.
Many experienced users combine both options: CEX for convenience and deposits/withdrawals, DEX for private and fast transactions.
Conclusion
CEX and DEX are not competitors, but rather two sides of the same crypto coin. The choice depends on your goals, experience, and level of trust in centralized platforms. The main thing is to understand how each option works and not to forget the basic safety rules: do not keep everything on one exchange and keep your private keys safe.
