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Centralized Vs Decentralized Exchanges

Explore the Difference Between Centralized and Decentralized Exchanges

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Centralized Vs Decentralized Exchanges

Hope you all know that cryptocurrency exchanges are the only medium to buy/sell bitcoins or any other cryptocurrencies. We can classify this cryptocurrency exchanges as below.

Classifications of Cryptocurrency Exchanges

1.Centralized Exchange 
2.Decentralized exchanges
3.Hybrid cryptocurrency exchanges

Centralized cryptocurrency Exchanges

Any cryptocurrency exchange website which has a central authority (i.e) admin to control the trading activity is know as centralized exchanges.

In technical terms, This kind of cryptocurrency exchanges will store the traders private key in centralized cloud storage, and the customer will not be able to proceed trading without sending the amounts to the admins control.


1. Easy to use
2. Secured


As the exchanges stores private keys in cloud storage, it will become a honey pot for hackers to steal all the funds.

Decentralized Cryptocurrency exchanges

This kind of cryptocurrency exchanges will not mediate the trading with the governance of the website admin. Which means the admin has no control over the funds, and the private keys will not be stored in any third party cloud storage.

so the trader have to trade cryptos directly from their own hardware wallet.

Pros :

1. Fast
2. Peer to Peer

Cons :

* Maximum support to crypto to crypto trading alone, Especially with ethereum.

The above are the major cryptocurrency exchanges types which currently rules the entire network.

The decentralized exchange is an innovative exchange model in cryptocurrency industry which results in high security and instant trading of your digital assets. Exchange websites which perform decentralized exchanges are called as decentralized exchange websites. There is a solid reason for decentralized exchanges to emerge online, Yes. In the past three years (2015–2018), there were around $100bln were stolen from unsecured centralized exchange websites.

Why Decentralized exchanges?

Because centralized exchanges will store everything on a “Honey Pot” called central cloud server, which includes your digital assets, and the private key of your wallet. This encourages anonymous users to perform malicious activities on an exchange website, and results in a huge loss.

To prevent this issue entire cryptocurrency and blockchain industry were invented a new exchange process known as decentralized exchanges. To be clear, a decentralized exchange will never store any of your details including your digital assets, private keys or anything.

So you can “ Trade on the GO”.

Note To Remember Forever :

We are not saying that all the centralized exchanges are unsecured and unworthy to trade your digital assets. But some centralized exchanges are careless about their security and traders assets. So this becomes the reason for unexpected attacks and trader to lose their hope on centralized exchanges. Being an owner of a centralized exchange website if you integrate and upgrade security features often, your website will be safe from this kind of issues.

Decentralized exchanges are not an alternative to prevent hacking and other issues happen on centralized exchanges. Instead, it is an upgraded exchange business model which ease all your trading activities.


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