Centralized vs Decentralized Exchanges: Key Differences Explained
Centralized vs Decentralized Exchanges: Key Differences Explained As cryptocurrency adoption continues to grow, choosing the right platform to trade or invest becomes essential. One of the most debated decisions among crypto users is whether to use a centralized exchange (CEX) or a decentralized exchange (DEX). Both serve the same fundamental purpose — buying, selling, and trading digital assets — but they function very differently. In this article, we’ll explore what sets them apart, the pros and cons of each, and which might be right for you in 2025. What Is a Centralized Exchange (CEX)? A centralized exchange is a cryptocurrency platform operated by a company or organization. It acts as an intermediary between buyers and sellers, holding user funds in custodial wallets. Examples of major centralized exchanges include Binance, Coinbase, Kraken, and KuCoin. These platforms typically require users to create accounts, complete Know Your Customer (KYC) verification, and store their...