With the growing popularity of cryptocurrency, more and more people are thinking about buying and trading crypto. The most popular way to do so is by using cryptocurrency exchanges. So if you’re wondering what is crypto exchange and what types there are, keep reading this article.
Cryptocurrency exchanges
A cryptocurrency exchange is an online platform for buying and selling cryptocurrencies. It is also often used as a place to store assets and exchange one digital asset for another.
Crypto exchanges are great for beginners. Their interfaces are usually user-friendly and there are a lot of useful tools and types of trading. What is crypto trading? It is the process of buying and selling crypto assets with the aim of profiting.
Types of crypto exchanges
All cryptocurrency exchanges are divided into two main types: centralized (CEX) and decentralized (DEX).
CEX is a platform with a central governing body that ensures that the exchange works properly and is responsible for user service, asset security, etc. An exchange acts as an intermediary in transactions.
DEX is an automated cryptocurrency exchange based on blockchain technology with decentralized management. Transactions are based on smart contracts and are carried out directly between users without intermediaries. There are no unified information processing servers, as well as centralized management.
CEX is distinguished by higher liquidity, fiat support, numerous tools, a more convenient interface and a more clear working process.
In turn, the advantages of DEX include a higher level of anonymity, the lack of exchange access to wallets and accounts, the absence of political, geographical and other restrictions.
Here are the factors you need to consider before choosing an exchange:
- security;
- reputation;
- high liquidity;
- the number of trading pairs;
- methods of depositing and withdrawing assets;
- wide range of tools.
Now that you know the types and features of crypto exchanges, you can start your journey and buy crypto. Of course, there are a lot of things you need to know before going all in.
