Centralized Cryptocurrency Exchanges are online platforms that are used to buy and sell cryptocurrency. These are the most common ways that investors use to buy and sell assets for the cryptocurrency.
Some investors find the concept of ‘centralized’ exchange somewhat misleading, with digital currency often being called ‘decentralized.’ In that case, what does ‘centralized’ mean and why are these exchanges so crucial to the success of the cryptocurrency industry as a whole? Let’s first understand a centralized cryptocurrency exchange.
What is Centralized Exchange
The centralized exchange is an online platform and the most common way to exchange crypto-currencies. Centralized exchanges (often referred to as “CEX”) are managed by an organization that oversees its daily operations, such as security, growth, and maintenance. A centralized exchange business model is like that of a traditional exchange that charges trading costs for market access. This type of exchange acts as a third-party mediator that connects buyers and sellers.
Undisputable Benefits Of Centralized Exchange
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A centralized exchange is a business entity that offers users a trading platform while monitoring transactions, checking order books and ensuring compliance with local regulations. By entering into a centralized exchange, you communicate with a third party, the company that manages the exchange.
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