#CEXvsDEX101 #CEXvsDEX101

In the world of cryptocurrency trading, exchanges are a fundamental platform for buying and selling digital assets. These exchanges are divided into two main types: **Centralized (CEX)** and **Decentralized (DEX)**. Each has its advantages and disadvantages, making it suitable for different user categories.

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### **1. What is a Centralized Exchange (CEX)?**

Centralized exchanges are intermediary platforms managed by companies or centralized entities, where they hold user funds and private keys on their behalf. Some of the most well-known examples include: **Binance**, **Coinbase**, and **Kraken**.

#### **Advantages of CEX:**

- **Ease of Use:** User-friendly interfaces for beginners with available technical support.

- **High Liquidity:** They have a large trading volume, making it easy to execute trades quickly.

- **Ability to Trade Traditional Currencies (Fiat):** Such as the dollar or euro.

- **Regulatory Compliance:** They are subject to government oversight, providing some protection for users.

#### **Disadvantages of CEX:**

- **Security Risks:** Since funds are held by a third party, they are susceptible to hacking or freezing.

- **Identity Verification Requirements (KYC):** Require identity verification, reducing privacy.$BTC $BNB