#CEXvsDEX101
Centralized or decentralized crypto exchange: what to choose?
What is the difference between a centralized and decentralized crypto exchange? Centralized exchanges (CEXs) and decentralized exchanges (DEXs) offer different benefits to crypto investors. Centralized exchanges explained Centralized exchanges offer user-friendly interfaces for beginner investors and an easy way to buy crypto with fiat currency! However, critics complain that centralized exchanges go against the principles of decentralization. Decentralized exchanges explained Decentralized exchanges allow users to trade cryptocurrency peer-to-peer, with no centralized entity acting as an intermediary! However, decentralized exchanges often have difficult-to-use interfaces, which means they aren’t the best option for beginner investors. What is a centralized exchange? How does a centralized exchange work? In a centralized exchange, you deposit your cryptocurrency in a platform like Coinbase or Binance. These platforms act as intermediaries for buyers and sellers. For example, if you wish to trade Ethereum for Bitcoin, the centralized exchange will supply the liquidity to make this trade possible. Centralized exchanges often have easy-to-use interfaces — which makes it easy for users to buy, sell, and trade crypto! In addition, these platforms typically work with regulators to stay compliant with the latest cryptocurrency laws and often offer features that decentralized exchanges do not — such as customer support! To use a centralized exchange, you’ll typically need to deposit your cryptocurrency on an account held by an exchange.
