#CEXvsDEX101 Centralized vs. Decentralized Platforms, Which to Choose?

If you are taking your first steps in the world of cryptocurrencies, you are likely to encounter two main types of platforms to buy, sell, or exchange your digital assets: CEX and DEX. In #CEXvsDEX101, we will understand their key differences so you can make informed decisions.

CEX (Centralized Exchanges) are the most common and operate similarly to a traditional bank. Popular examples include Binance. When you use a CEX, you entrust your funds to the company that operates the platform. They are easy to use for beginners, offer a lot of liquidity (meaning it is easy to buy and sell large amounts without affecting the price), and usually have customer service. However, being centralized, they are subject to regulations and can be a target for cyberattacks, although they often have strong security measures.

On the other hand, DEX (Decentralized Exchanges) operate without a central authority. They operate directly on the blockchain, which means your funds always remain under your control in your wallet. This offers greater privacy and resistance to censorship. DEXs are popular among more advanced users looking for newer assets or greater autonomy. The downside is that they can be more complex to use for novices, liquidity may be lower for some pairs, and fees (gas fees) may fluctuate.

Choosing between a CEX and a DEX depends on your priorities: do you prefer ease of use and centralized security, or autonomy and privacy? Many users use both, taking advantage of the best of each. The important thing is to understand the pros and cons of each before trading!