Intro

As a moderator of the Tron Fan Club community, I regularly write various tutorials on crypto blockchain and Tron related matters. The main purpose of these tutorials is to make our new users aware of these topics. In continuation of that I am writing tutorials on trading and finance. Hope you can easily learn some details of trading and finance through this tutorial series.

The cryptocurrency market is very emerging and trending market in the World. The crypto market has has grown exponentially over the last few years. Now it is very much acceptable to many of the people throughout the World. People around the World has already adopted to crypto very well. This adoption is leading to the creation of different types of exchanges. Different exchanges are very popular to buy, sell and trade digital assets. There are basically two types of exchanges which I have discussed in my previous four tutorials. Two of the most popular types of exchanges are centralized exchanges (CEX) and decentralized exchanges (DEX). Understanding the differences between these two types of exchanges is important for anyone interested in buying, selling or trading cryptos. Let’s check 5 differences between CEX and DEX in this post today.

1. CEX is online platform that work as intermediaries. Main function of CEX is to connect buyers and sellers through a centralized way. They typically handle the settlement and custody of digital assets like crypto. Most of the CEX are often regulated by governments in various countries. Examples of CEX include Binance, Coinbase, Poloniex etc. On the other hand, DEX operate on a decentralized network. Basically they are working on the blockchain. Users can trade digital assets directly with each other without the need for a centralized intermediary. They give users to control their own private keys and digital assets. Ultimately the risk of theft or loss due to hacks is minimized. Examples of DEX include Uniswap, Binance DEX and 0x etc.

2. Another differences between CEX and DEX is the level of control over digital assets. In a CEX, users must trust the platform to secure their digital assets, while in a DEX, users have full control over their private keys and digital assets.

3. CEX and DEX is the level of privacy and security. CEXs often collect and store personal data. It is making users vulnerable to hacks or data leak. DEXs do not collect or store personal data. Hence the data is secured here.

4. The user experience is also different between CEX and DEX. CEXs typically offer a simple, user-friendly platform for buying, selling and trading cryptos with a wide variety of digital assets available for trade. DEXs may have a steeper learning curve and may not offer as many digital assets for trade but they offer greater control and privacy to users.

5. Contrary to CEX, DEX reduces the risk of theft or loss but users must take full responsibility for their digital assets.