Cryptocurrency Exchange

Cryptocurrency Exchanges: DEX and CEX

decentralized cryptocurrency exchange (dex) is a website or application where buyers and sellers come together to exchange crypto/crypto or fiat/crypto, which means fiduciary money or paper money like U.S. dollar.

This is a peer to peer exchange, the exchange does not hold anyone´s coin or information, and there are no middle-men.

The exchange does not serve like a bank in this case, because it does not have control of your information and no centralized authority.

With this type of platform, there are no middle-men to help you fix any problems or to assist you with account restorations.

You are responsible for your safety, your passwords, your secondary passwords, authentications, pins and email verification.

DEX has no support team. In case you lose your information it is lost forever.

With dex you are your own security, and you don’t have to trust anyone with your information or money.

It might be kind of funny to ask yourself, if you can trust yourself with your own information and money. But that is exact case here.

Most exchanges usually offer several types of security at sign up; do not neglect to apply to all if possible.

But first, make sure you understand what these security methods are and that you agree with the terms.

Some are centralized platforms (cex), where the exchange is the actual middle-man, fees may be charged with each transaction and in case of any system failure, password theft, loss or account issues you may find a support team

behind the exchange to restore your account, password or just to help you.

Do you have to use an exchange if you want to own cryptos?

No, you don’t. You could exchange directly from one person to another, but you would have to be positive to know whom you are trading with.

All you would need is an address to send and to receive, exchange with whomever you would like.

But remember, cryptocurrency trading is not like a credit card payment you can cancel out anytime.

When it comes to exchanging, sending, buying, once you accept transaction, there is neither a turnaround nor cancellations available.

Now, on centralized exchange platforms, people are verified and double checked. Usually they send in their ID, home address along with a selfie holding such documents.

So, there are many benefits for choosing to stick to exchanges, there are no right or wrong choices, only what is best for you:

Decentralized: better access to coins/tokens/fiat, Anonymous and no hacks.

Centralized: Better access to tokens/coins/fiat, verified customers, team support, restores your information and passwords.

You must do your homework when choosing an exchange; get involved in the community of the exchange you are trying to trade in.

Look for reviews and what people are saying.

Make sure that the exchange has your best interest.

You must know what your needs are:

  • What kind of coin/token or fiat would you like to trade? Buy? Sell?
  • Will you be trading daily?
  • Automatic features? Would you like automatic trading, where you can set up an amount and have it automatically bought or sold when it reaches that particular price?
  • Are you just trying to HODL?

And go from there into looking for a platform that will serve and perform accordingly.

It´s important to note that not all exchanges accept fiduciary money and that they do not accept or work with all types of cryptos either.

There are local and global exchanges. Locals or regional exchanges usually work with the local fiat according to the country they may be located in; global exchanges may work with a much larger number of markets but are still limited in fiat currencies which usually are USD, EUR AND YEN.

Most exchanges work with Bitcoin markets, so owning bitcoins are usually a must to purchase any other coin or token.

Find out what HODL is: “To HODL or not to HODL”

Cryptocurrency brokers are usually the first option for people who are just getting started with cryptos because they offer a set price for the coins and tokens plus a small fee or premium.

The advantage of this type of market for beginners is that you will not have to go insane with all the different market prices.

It is sort of like the exchanges at airports you know? When you want to exchange your cash for whatever currency you are going to need.

Broker’s exchanges are allowed to have a set price plus a premium to serve you for that day at a fixed rate without all the fluctuation of the market.

And brokers are usually insured.

Binance is the largest centralized exchange available at the moment.

According to their CEO Zhao Changpeng the only reason they are not decentralized yet, is due to the fact that as of right now there are no blockchain systems available that could handle 40,000 transactions per second.

Zee says once there is a blockchain available to serve Binance as needed that they will indeed become decentralized.

Binance is obligated to work with hundreds of different blockchains according to the markets available.

It trades an average of 10 billion U.S. dollars daily, has over 6 million users and offers 237 trading pairs. Even though it has never been hacked yet, and has an amazing credibility, being decentralized has disadvantages: vulnerable to hackers.

If a hacker gets into the system it will wipe out, if not all, at least most of their customers because they hold the clients information.

Conclusion:

Each exchange whether decentralized or centralized will have a distinct infrastructure, privacy policies, terms etc.

Read, read, and read.

Understand the exchange of your choice, how they function, what they offer, how they work.

What would happen with you money if they got hacked?

What kind of fees do they charge and what kind of services do they offer?

Do they have a way to contact them directly?

What kind of information do they have available about themselves on their website?

Does it have a green website?

Ask questions. Contact them with your limitations. Join communities…Stay safe and informed.

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