What are CEXs?
Last updated
Last updated
Centralized Exchanges (CEXs) are trading platforms where you can buy, sell, and manage cryptocurrencies. These exchanges are run by companies that oversee the platform and handle trades for users, much like traditional stock exchanges. To use a CEX, you usually need to sign up, create an account, and go through some level of verification.
Some of the biggest and most widely used CEXs around the world include:
CEXs are designed for a variety of crypto-related activities, including:
Buying and Selling
Easily purchase or trade cryptocurrencies with fiat (like USD or EUR) or other cryptocurrencies.
Trading
Access advanced trading options, such as spot trading (buying and selling instantly) and derivatives (futures and options).
Earning
Some CEXs offer ways to earn interest on your holdings through staking or lending.
Converting
Swap between different cryptocurrencies without needing a separate wallet.
When you buy crypto on a CEX, you have the option to keep it there or move it to a private wallet. Here’s how they differ:
Holding on a CEX:
Your crypto is stored in the exchange’s wallet, which means you don’t control the private keys.
While CEXs use high-level security measures, your assets are technically in the custody of the exchange, not directly under your control.
This can be convenient for trading but means you’re trusting the platform with the safety of your funds.
Holding in Your Own Wallet:
Moving crypto to a personal wallet (like MetaMask, Phantom or a hardware wallet) means you have full control of your private keys and your funds.
This provides more security and privacy, as only you have access to the wallet.
However, it also requires more responsibility, as losing access to your wallet or private keys means losing access to your crypto.
In summary, CEXs offer an easy way to get started with crypto, trade, and manage funds all in one place. However, many users move their assets to private wallets to gain more control and security.