#CEXvsDEX101

In the world of cryptocurrency trading, exchanges are a fundamental platform for buying and selling digital assets. These exchanges are divided into two main types: **Centralized (CEX)** and **Decentralized (DEX)**. Each has its advantages and disadvantages, making them suitable for different categories of users.

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### **1. What is a Centralized Exchange (CEX)?**

Centralized exchanges are intermediary platforms managed by companies or central entities, where they hold users' funds and private keys on their behalf. Some of the most famous examples include: **Binance**, **Coinbase**, and **Kraken**.

#### **Advantages of CEX:**

- **Ease of use:** User-friendly interfaces with available technical support.

- **High liquidity:** It has a large trading volume, facilitating quick transaction execution.

- **Ability to trade in fiat currencies:** Such as the dollar or euro.

- **Regulatory compliance:** Subject to government oversight, providing some protection for users.

#### **Disadvantages of CEX:**

- **Security risks:** Since funds are held by a third party, they are susceptible to hacking or freezing.

- **Identity Verification Requirements (KYC):** Require identity verification, reducing privacy.

- **Centralized control:** May be subject to disruptions due to technical issues or government decisions.

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