Crypto exchange is a service on the Internet with the main mission of providing options for clients to purchase, sell, and convert digital assets. Depending on the type of crypto platform, features vary. For example, one platform supports all the basic and advanced trading features while the other only allows converting coins between users. Let’s see the difference.
Centralized Crypto Exchange
Such platforms are also called “regulated,” which means they have a management or a team controlling all the processes on the exchange and providing a high level of safety for transactions. The advantages of regulating cryptocurrency exchanges:
1.robust security for clients’ funds;
2. a large number of traded pairs;
3. advanced trading instruments, possibility to trade with leverage (borrowed funds), margin, futures, etc.
4. control over suspicious transactions and protection against hacker attacks;
5. possibility for fiat to crypto exchange.
The disadvantage of such platforms is the lack of anonymity.
On the other hand, all these advanced features would not be possible without user verification, for if you want to trade with fiat, you need to attach a bank card and provide your data to a crypto exchange.
From the name, it becomes clear that such platforms have no central body to control transactions. Thus, DEX does not ensure user safety or track transactions to stop illegal activity. Decentralized platforms support p2p cryptocurrency exchange where users send each other assets and convert them only relying on luck. Human factor matters here.
On DEX, you do not have to register and verify your account.
However, p2p is also possible on CEX; for example, the WhiteBIT exchange offers this option. You do not have to register or pass KYC for that purpose.
Both types of exchanges are popular. Probably all crypto investors have accounts in regulating cryptocurrency exchanges to access advanced financial tools and have a reliable service. DEX is also actively used for the quick conversion of small sums. It is crucial to pick a reliable DEX, and only experienced traders can do that. So if you are a beginner trader, we recommend starting with a regulated exchange where everything is clear and safe.