What are the types of Cryptocurrency Exchange?

A cryptocurrency exchange is a website that allows users to convert their cash money into cryptocurrencies and vice versa. Most exchanges are primarily concerned with providing services that allow you to convert a cryptocurrency, such as Bitcoin, into other digital currencies, such as Ethereum, Litecoin, and so on. There are three types of exchanges now available: Centralized or CEX, Decentralized or DEX, and Hybrid.

Centralized Cryptocurrency Exchange (CEX)

            Centralized cryptocurrency exchanges, also known as CEXs, are comparable to traditional stock exchanges. Buyers and sellers get together, and the exchange acts as a middleman. In the crypto-world, “centralized” means entrusting your money to someone else. One of the biggest difficulties with centralized cryptocurrency exchanges, as opposed to other forms of cryptocurrency exchanges, is their vulnerability to hacking.

Decentralized Cryptocurrency Exchange (DEX)

            Following that, we have Decentralized cryptocurrency exchanges, which attempt to adhere to the cryptocurrency industry’s core ideology. A DEX does not use a third party to handle your cash. It is a marketplace where buyers and sellers meet and conduct business directly with one another.

DEXs, in other terms, facilitate peer-to-peer transactions. Cryptocurrency exchanges that are decentralized are more difficult to hack. On the other hand, you are more likely to lock yourself out of your money. Other issues with DEXs may include poor volumes and liquidity as a result of their current lack of popularity.

Hybrids

            Finally, hybrid cryptocurrency exchanges are recognized as the next generation crypto trading marketplace. They intend to combine the advantages of both centralized and decentralized exchanges. Hybrids, in particular, strive to combine the functionality and liquidity of a CEX with the anonymity and security of a DEX. Many people feel that such exchanges are the true future of bitcoin trading.

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What is Crypto Currency?

At its heart, cryptocurrency is essentially decentralized digital money intended for usage over the internet. In 2008, Bitcoin was introduced as the first ever cryptocurrency, its is the most popular till date and also more influential cryptocurrency. From then Bitcoin and some other crypto currencies such as Ethereum has became the digital alternatives for money issued by government.

Bitcoin, Ethereum, Bitcoin Cash and Litecoin are the most popular cryptocurrencies based on marketing capitalization. Tezos, EOS, and ZCash are among more well-known cryptocurrencies. Some are comparable to Bitcoin. Others are built on other technology or have unique features that enable them to do more than simply move value.

Online transaction without an intermediary like bank or any other payment processors can be done using Cryptocurrencies and international transfers can also be done instantly for cheap rates 24/7.

Due to the validation technology by blockchain technology the transactions are much safer.

A bitcoin blockchain is analogous to a bank’s ledger or balance sheet. Each currency has its own blockchain, which is a continuous, continually re-verified record of every single transaction ever completed with that money.

Cryptocurrencies may be mined or bought on cryptocurrency exchanges. Not all ecommerce sites accept cryptocurrency purchases. In reality, even famous cryptocurrencies like Bitcoin are rarely utilized for retail purchases. However, the cryptocurrency’s rising value has made them attractive as trading instruments.

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