A cryptocurrency exchange is a kind of digital currency exchange where users may buy, sell, and swap digital assets for fiat money or other digital assets. They’re comparable to conventional stock exchanges, where users may buy and sell traditional equities via transactions and orders.
Cryptocurrency exchanges have come a long way from their early incarnations (which were often unregulated) to offer increased security and accessibility, as well as to guarantee legal compliance in the countries where they operate. As the cryptocurrency market matures, more exchanges have arisen to compete for customers and trade volume by offering competitive trading fees, exchange rates, and user-friendly features.
Cryptocurrency exchanges are divided into two categories: decentralized and centralized.
The most popular method to trade cryptocurrencies is via a centralized exchange, which acts as a middleman to facilitate transactions between the parties.
Binance, Coinbase, and Kraken are three of the largest centralized exchanges.
Decentralized exchanges (DEX) allow for peer-to-peer cryptocurrency trading and are run without the involvement of a central authority.