A cryptocurrency or web exchange rate helps customers swap crypto wallets with several commodities such as virtual and traditional paper money. The cryptocurrency exchange is a kind of platform facilitating cryptocurrency trading for multiple assets, including fiat and digital currencies. The best crypto exchange always acts as a mediator between the seller and buyer & also makes money through the transaction fees & commissions. This article will show the major differences between centralized and decentralized cryptocurrency exchanges.
Centralized crypto exchange:
A centralized crypto exchange or CEX is an online platform mainly used for trading and purchasing cryptocurrencies. It works as a third party between the seller and buyer. Centralized crypto exchanges are completely controlled and operated by an organization. They are popular for reliability. According to the statistics, more than 90% of transactions go through this exchange.
Importance of CEX
CEXs are ideal for beginner investors. They offer investors a friendly and simple way of investing as well as trading in cryptocurrencies. As opposed to utilizing P2P transactions and crypto wallets, which are complex, centralized exchange users login to their crypto accounts to check the account balance & create transactions through the websites and applications.
When it comes to trading & transactions, centralized crypto exchanges deliver an additional layer of reliability and security. Apart from that, CEX facilitates all transactions through a well-developed and centralized platform that gives a high comfort level.
The centralized crypto exchange offers very essential services and solutions to crypto investors. CEXs have their call centers where the executives are well-trained to describe the importance of cryptocurrencies in an easy-to-understand and friendly manner. Apart from that, CEXs offer custodian services which mean they have built an infrastructure to manage digital currencies. In short, centralized crypto exchange plays a vital role for investors who need a secure investment.
Decentralized crypto exchange:
A decentralized cryptocurrency exchange or DEX allows to execution of P2P transactions without any intermediary or a third party. However, DEX never facilitates fiat currency trading for cryptocurrencies. Decentralized crypto exchanges generally work on the self-regulation & automation principles making them cost-effective comparatively. DEXs would help you reduce all the additional costs. DEXs help in reducing all of the extra charges.
Importance of DEX
Minimizing the risk of hacking
Users of DEXs never transfer any asset to the intermediary. So that, there’s no major risk of an organization or a company being hacked, & users can be assured of safety from theft and hacking.
Prevention of market manipulation
We have already mentioned above that decentralized exchanges are known for P2P transactions. In this way, DEXs can control the market manipulation and also protect the consumers from wash and fake trading.
DEXs are perfect for those who need complete privacy since the decentralized exchanges are anonymous. Decentralized crypto exchanges never require filling up KYC (know-your-customer) forms, giving anonymity and privacy to users.
Control on money
DEX gives control over your funds and wallet. For any transaction, it never asks to transfer your funds to the trading account. CEX and DEX both have several benefits and play a big role in the world of cryptocurrency. If you are a beginner investor, you must choose one of the best crypto exchange platforms, Wisebitcoin. It allows you to take major advantage of the rapid growth of global blockchain markets in the most easiest way possible.