About 10 years ago, the concept of the “cryptocurrency market” did not exist yet, and now its capitalization is approaching the $2 trillion mark. To realize how much this is, let’s compare it with the US military budget for 2021, which is equal to $740 billion.
Bitcoin was called a bubble, compared to the dot-com, the fate of which was predicted for the entire industry some time ago. However, nowadays, very few have doubts about the longevity of the cryptocurrency industry. Therefore, the number of crypto investors and traders is growing day by day. All of them have one thing in common: they all need a place to buy and sell their coins.
We will talk about cryptocurrency exchanges in-depth in this article. Also, we will find out what they are and give examples of the best platforms.
Centralized cryptocurrency exchanges
The first category includes sites that work on the basis of a public or private bank. A client who wants to make a transaction, for example, buy Ethereum or Bitcoin, entrusts their finances to the chosen cryptocurrency platform. Centralized crypto exchanges are also known as “CEX”.
Each user must pass a mandatory registration procedure before starting to work with a centralized cryptocurrency exchange. After that, one usually faces the verification procedure.
Each client has a special digital key-password for one’s section of the cryptocurrency storage. Even if the electronic key-password is lost, its data can be restored thanks to a special intermediary of the crypto exchange, which will help recover the lost key.
Popular centralized cryptocurrency exchanges propose a high level of security. However, they are often attacked by hackers who are constantly searching for vulnerabilities in their security systems. Thus, experts strongly advise against storing large sums of money on such platforms.
Decentralized cryptocurrency exchanges (DEX)
This kind of platform works in a different way. Decentralized crypto exchanges don’t have one owner or a group of owners. The fact that no one controls the exchange is just evidence that the work of the exchange is not subject to any instructions from the center. It means the administration will not be able to freeze your balance or block your account.
All blockchain nodes that form the exchange network operate on the basis of a smart contract. The process of buying and selling or exchanging cryptocurrency is not under the control of the main server. Each DEX can differ in its blockchain architecture.
As a rule, registration on decentralized sites is as simple as possible and takes place in just a couple of clicks. You don’t need to pass verification to work with a majority of such sites. This means that when working with DEX, you can trade cryptocurrencies anonymously and not worry about the safety of your personal data.
If we evaluate cryptocurrency exchanges by the level of security, it appears that the crypto assets of DEX clients are more secure than the financial assets of centralized crypto exchange users. Here you are the owner of your funds since you hold the private keys to the wallets. Now let’s take a look at the most popular decentralized exchanges of 2021.
It is a relatively young, but very promising project that has become quite popular among users. If you value anonymity, security, and convenience, this platform may be considered the best cryptocurrency exchange for you.
Here you can exchange any amount of cryptocurrency at the best exchange rate on the market. The site’s algorithms monitor the price of cryptocurrencies in real-time and provide users with the most profitable conditions. At the same time, the platform is completely anonymous and operates at a fixed rate.
You do not need to register at Godex.io. The developers have focused on the simplicity and convenience of the interface, which absolutely anyone can cope with. There is a cryptocurrency calculator on the main page — most of the work takes place right there.
So far, this platform is the leader in this direction. The project began its work three years ago, but only became widely known in 2020. At its peak, Uniswap outperformed Coinbase in daily trading volume. However, the site began to rapidly lose liquidity in late 2020. Many experts predict a great future for it.
This platform is among the top ten decentralized platforms. The daily trade of the exchange is about $45 million. Here you can trade DeFi tokens and stablecoins. This attracts users who need to quickly hedge against increased volatility.
Decentralized cryptocurrency exchanges have been taking market share from their centralized counterparts lately. Now there is already a sufficient number of such kind of sites, and their number will only grow over time. If you want to store your coins on your own while swapping them anonymously, then DEX is exactly what you need.