Centralized Exchange
Centralized exchanges can be used to conduct trades from fiat-to-cryptocurrency (or vice versa). They can also be used to conduct trades between two different cryptocurrencies. While this may seem to cover all of the potential transaction types, there is still a market for another type of cryptocurrency exchange as well.
That is how a Centralized exchange work. The platform offers an efficient trading environment at the cost of user’s privacy and personal information. The cryptocurrency data gets transferred through a network including passwords and get stored on a centralized server. These pieces of information are sometimes shared with the government due to regulations.
Pros
Features of Centralized Exchange
Ease of access
CEX makes it easier for users to create an account or buy their first cryptocurrency. This helped to bring new users into the system and has also made crypto markets more popular.
License
Most of these centralized exchanges have licenses and runs under government regulations. This gives the trader an assurance if something goes wrong.
Use of escrow
As a middleman in trades, they hold the currency until both parties complete their end of the bargain. Thus, there’s no need to worry about the transaction after the trade gets finalized.
Transparency
They make their address and location available to the traders. Hence, it helps the consumers to reach them if needed.
Offers and Discounts
CEX also offer discounts while trading in large amounts. Also, the users can exchange fiat currencies to crypto and cryptocurrencies to fiat.
