Cryptocurrency Exchanges Explained
What is a Crypto Exchange?
An exchange is a platform where you can buy, sell, and trade cryptocurrencies. Exchanges act as intermediaries between buyers and sellers, providing liquidity and market access.
🏢 Centralized Exchanges (CEX)
Examples: Coinbase, Binance, Kraken
Advantages:
- High liquidity & trading volume
- User-friendly interfaces
- Fiat currency support (USD, EUR)
- Customer support services
- Advanced trading features
Disadvantages:
- Requires KYC verification
- Exchange controls your funds
- Hack risk (Mt. Gox, FTX)
- Trading fees (0.1% - 4%)
- Regulatory restrictions
Best for: Beginners, high-volume traders
🌐 Decentralized Exchanges (DEX)
Examples: Uniswap, PancakeSwap, dYdX
Advantages:
- No KYC required
- You control your funds
- Lower fees on some networks
- Access to new tokens early
- Resistant to censorship
Disadvantages:
- Steeper learning curve
- Lower liquidity for some pairs
- No customer support
- Smart contract risks
- Only crypto-to-crypto trading
Best for: Experienced users, privacy seekers
📊 Fee Comparison (Average)
| Exchange Type | Trading Fee | Withdrawal Fee |
|---|---|---|
| Coinbase (CEX) | 0.5% - 4.5% | Variable |
| Binance (CEX) | 0.1% | Variable |
| Uniswap (DEX) | 0.3% | Network gas fees |
| Kraken (CEX) | 0.16% - 0.26% | Low |