Buying and selling cryptocurrency for profit has become a pretty popular activity lately. More and more novice traders come to the crypto market. What services and platforms are the best to use for trading?
There are two types of crypto exchanges: centralized and decentralized. The first one is the most common and popular among users. Let’s run through the key points of CEX:
- CEX had a regulatory body controlling the transactions and tracking suspicious users’ activities.
- CEX always demands client verification (KYC).
- CEX stores user funds and is responsible for their safety. Centralized exchanges use many complicated mechanisms to protect clients’ investments. Also, they apply anti-money-laundering tools. Users configure two-factor authentication to increase the security of their accounts. That is, the core of CEX is safety.
- CEX always offers loads of trading pairs and numerous instruments to trade cryptocurrency.
Now let’s take a closer look at a decentralized exchange (DEX). Buying and selling cryptocurrency may seem to be easier with DEX. They do not demand KYC. All transactions occurring between users occur through smart contracts execution, meaning money moves between users and does not remain on the exchange itself. Thus, DEX has nothing to do with the safety of users’ funds. DEX is only an intermediary between “takers” and “makers”.
As a rule, decentralized platforms do not offer a wide selection of trading tools. The number of cryptocoins is not extensive either.
Another thing worth mentioning is that DEX does not allow buying digital assets with fiat money, as CEX offers. On CEX, users can use their bank cards and buy crypto directly. With DEX, it is not possile. So trading on DEX implies that you already have a crypto wallet with coins.
Still, buying and selling cryptocurrency on DEX is often an easier way because it will not take your time for registration and verification.
Experienced traders often have accounts on both CEX and CEX. DEX is often used for transactions with small amounts of money executed every day. That is daily trading, which is so popular among traders. You just add your wallet and place an order. Pay a fee and receive needed coins to your wallet.
The List of DEX Exchanges
Regarding CEX, the most popular are Binance, Coinbase, WhiteBIT, Kucoin, etc.
Important to note that when buying and selling cryptocurrency, pay attention to the fees. Every exchange has a different fee policy.