Crypto Exchanges

Centralized Vs. Decentralized Exchanges – The Battle of Decentralization #criptocurrency #cripto

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Centralized exchanges (often referred to as “CEX”) are run by an organization (third-party) that oversees its day-to-day operations like maintenance, security, growth and support. The business model of a centralized exchange is similar to a traditional exchange that charges a trading fee in exchange for access to the marketplace. This type of exchange acts as a mediating third party that connects buyers and sellers with one another.

Through the use of smart contracts, a decentralized exchange (often referred to as “DEX”) is able to operate somewhat autonomously. The smart contracts in the DEX allow buyers and sellers to trade directly without the need for a third party; this allows them to maintain the decentralized spirit of the blockchain.

Both have their benefits but which means more to you? Centralization and the risk of losing all your cryptocurrency to a theft, or decentralization with its low fees and stronger anonymity, but its lack of volume. This episode, dives into both advantages and disadvantages of both; CEX and DEX

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