The term “Cryptocurrency” has been ruling the market for quite some time now. Cryptocurrencies have been a primary concern since it is secure and trustable. Cryptocurrencies are digital and they cannot be forged and that’s the main reason why investors are interested in making investments in crypto exchange services.
There has been a steady rise in the cryptocurrency traders which has increased the demand for cryptocurrency exchanges.
Well, it simply means that the cryptocurrency exchanges are the ones that allow the cryptocurrency investors to buy or sell cryptocurrencies instantly. To form a well-established trading platform, a lot of crypto exchanges support more than 20 currencies on its platform.
A cryptocurrency is quite close to what a stock exchange is but it primarily focuses on crypto tokens and not stock trades. There are mainly two types of cryptocurrency exchanges;
- Centralized Exchange (CEX)
- Decentralized Exchanges (DEX)
What is a Centralized Cryptocurrency Exchange?
A centralized cryptocurrency exchange is one of the most preferred exchange platforms by crypto traders. Centralized cryptocurrency exchanges are online platforms that are used to buy and sell cryptocurrencies. Since digital currencies themselves are often designated as ‘decentralized’ few investors still find the idea of centralized exchange misleading.
The question arises that what makes it a centralized system and why do these exchanges play a crucial role in making the crypto industry a successful one.
The term “centralized cryptocurrency exchange,” refers to the idea of centralization of cryptocurrency exchanges, i.e., the presence of an intermediary or third party that conducts the transaction. The buyers and sellers of assets trust the central authority who is responsible for handling these assets. This is somewhere like a bank setup, where the customer trusts the bank to hold their money.
The centralized cryptocurrency exchange is similar to banks. The…