The Difference Between DEX And CEX: Which Should You Use?

Battle for decentralized exchanges: Dex vs Cex

In the world of cryptocurrencies, two popular terms emerged that describe the way users communicate with exchanges: Dex (decentralized exchange) and CEX (centralized exchange). Although both types of exchanges are used to buy, sell and exchange cryptocurrencies, they significantly differ in their basic architecture, benefits and use cases.

In this article, we will explore the differences between Dex and Cex, exploring which is more appropriate for your needs and what you should consider before choosing a trading platform.

What are Dex and CEX?

• Dex (decentralized exchange) : a decentralized exchange is an online market in which users can buy and sell cryptocurrency values ​​without the need for a third party mediator, such as centralized exchanges such as binance or coins. The decentralized exchange acts on blockchain technology and uses intelligent contracts to facilitate transactions.

• CEX (central exchange) : a centralized exchange is a traditional internet broker company that connects customers and sellers directly through its platform. Centralized exchanges control an entity, which means that users require the account, check their identity and deposit funds before trading.

Key differences between Dex and Cex

Here are the main differences between Dex and Cex:

* Decentralization vs centralization : the most obvious difference is that decentralized exchanges are completely decentralized, without any entity that controls them. On the contrary, centralized exchanges have a central government that manages the platform.

* Transplant feet : Dex often have lower transactions commissions than CEX for the use of intelligent contracts and peer-to-peer trading.

* Customer interface : Dex platforms usually offer more interfaces adapted to users, with functionality as simple buttons to buy/sell and easy navigation. The centralized exchange can be irresistible for new users, complex menus and technical jargon.

* Security : Although both types of exchange have their vulnerability, decentralized exchange is generally considered safer due to the absence of the central point of bankruptcy. However, the centralized exchange can still be vulnerable if they are not adequately protected.

When to use dex:

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• Small scale trading : for the purposes of smaller exchanges, decentralized bags can be an effective option.

When to use CEX:

• Professional merchants : centralized exchanges are ideal for expert traders that require greater control on the control and safety of the account.

• Large scale trading : If you need to exchange large quantities of crypt currency or require advanced commercial characteristics, centralized exchanges can be better in shape.

Conclusion

In conclusion, the choice between Dex and CEX depends on your individual needs and preferences. Although decentralized equity exchanges offer greater safety, flexibility and lower transactions taxes, share markets are more appropriate for expert traders that require control of the management of accounts and large quantities of negotiation. If you are new in cryptocurrency trading or you need a user interface, Dex could be a better choice. However, if you are a professional trader or you need advanced features, Cex is probably the best robbery.

Advice:

• Newcomers: start with Dex as Uniswap or Sushiswap.

• High volume trader: USA DEX as Binance or Huobi.

• Professional merchants: take into consideration the use of centralized exchanges such as coinbase or Twin for advanced characteristics and safety.