Crypto exchanges: What is a DEX?
In our previous post, we told you about centralized exchanges, or CEXs. Today, we’ll discuss platforms that truly adhere to the original tenets of blockchain technology.
Decentralized exchanges (DEXs) are crypto exchanges that operate on blockchain technology without a centralized entity in control. In other words, DEXs have zero control over your crypto — they’re basically an interface to interact with your coins and tokens.
Advantages of DEXs:
A high level of security and protection from hacks and scams. No one will hack your account because DEXs don’t force you to create one!
The user has complete control over their funds and assets. Only you manage your crypto; the DEX only “helps” users exchange it.
No withdrawal restrictions.
Disadvantages of DEXs:
Transactions are processed more slowly compared to on a CEX. (For regular users, it’s acceptable, but it isn’t for traders.)
DEXs offer fewer cryptocurrencies and trading pairs than CEXs. (Sometimes, DEXs list coins that aren’t on CEXs.)
DEXs are usually more challenging to use. (But you’ll get the hang of it after your first try anyway.)
You can’t buy cryptocurrencies with fiat money. DEXs only allow one-for-one crypto swaps.
Who would find a DEX useful?
True cypherpunks
People who want 100% control of their crypto.
People who don’t want to reveal their identities to an exchange.
People who want better trading conditions and low transaction fees.
Conclusion: Which one should you use, DEX or CEX?
The good news here is that you don’t need to choose one over the other. Each exchange is well-equipped to execute its duties.
If you’ve never bought crypto before and have no issues showing your passport to complete KYC, a CEX will be an excellent place to start
Conversely, if you value anonymity and want complete control of your assets, your only option is to use a DEX
Crypto_Ocean
