Centralized vs Decentralized Exchanges

Centralized and decentralized exchanges are two different ways to buy and sell cryptocurrencies. Centralized exchanges are run by a single organization, usually a company, which acts as a middleman between buyers and sellers. They manage user funds and the trading process. On the other hand, decentralized exchanges (DEXs) use blockchain technology and do not have a central authority. Users keep control of their own funds, and transactions happen directly between users on the network.

People often prefer decentralized exchanges because they provide better security, privacy, and control. Since there is no central authority, DEXs are less likely to be hacked or manipulated. Users have more control over their assets, free from the rules of a centralized exchange. Moreover, decentralized exchanges are typically more transparent as their code is open for anyone to see and verify.