A centralized cryptocurrency exchange is a platform where you can buy or sell digital assets. Here, you have to trust a third party to monitor the transaction and secure the assets on behalf of the buyer and the seller. Their deals aren't tracked on the blockchain. Such exchanges require you to submit your personal information for verification. On the other hand, if you're a company, then you'd have to provide your corporate information to the exchange so it can verify your account. The more details you provide to these exchanges, the higher your withdrawal quota will increase. Verified users of these platforms can contact the support team of the exchange in case of any technical error or if they lose their password. In most cases, centralized crypto exchanges provide their users with flat pairs at stable prices. These exchanges are widely popular among cryptocurrency users, and you can easily find one of these platforms online. Some examples of centralized cryptocurrency exchanges include Binance, Coinbase, LocalBitcoins, and others.Decentralized:
A DEx or a decentralized cryptocurrency exchange is similar to a centralized one, except it doesn't have a third party on which you can rely. All of the funds in this exchange remain stored on the blockchain. These platforms allow peer-to-peer (P2P) trading for which it uses assets, proxy tokens, or an escrow system, unlike the IOU-based system a centralized crypto exchange uses. In a DEx, the client (you) brings his/her cryptocurrency to the gate, which stores the same and gives the client proxy tokens in their place. The client can now use these tokens within the blockchain of this exchange. The real cryptocurrency present in the gates collateralizes these tokens.
You can order to sell your current tokens for another kind of tokens in exchange. Your order, its matching process, and all the consequent processes remain stored on the blockchain of the exchange, which is the first highlight of these places. When you receive any tokens through a transaction, you can convert them into real cryptocurrency as well. Continue to read on UpGrad Blog