What Is a Crypto Exchange? Centralised vs Decentralised
Exchanges are where most people buy, sell and trade crypto. Here is the difference between centralised and decentralised ones — and what to weigh.
Not financial advice. This article is for informational purposes only. Cryptocurrency is volatile and high-risk — do your own research.
A crypto exchange is a marketplace for buying, selling and trading digital assets. There are two broad types, and the difference matters for how much control — and risk — you take on.
Centralised exchanges (CEXs)
A centralised exchange is a company that runs the marketplace, holds customer funds, and matches buyers with sellers. They are the easiest on-ramp: you sign up, deposit money from a bank card or transfer, and trade. The trade-off is custody — while your crypto sits on the exchange, the exchange controls it. “Not your keys, not your coins” is the reminder that funds on a platform depend on that platform staying solvent and honest.
Decentralised exchanges (DEXs)
A decentralised exchange is software — smart contracts on a blockchain — that lets people trade directly from their own wallets, with no company holding funds. You keep custody the whole time. The trade-offs are a steeper learning curve, network fees, and the fact that if you make a mistake there is no support desk to call.
How to choose
- Custody: a CEX holds your coins; a DEX lets you keep them.
- Ease: CEXs are simpler for beginners and for converting cash.
- Checks: reputable CEXs require identity verification; DEXs usually do not.
Many people use a CEX to buy and a personal wallet to store. Learn how in our wallet guide. Not financial advice.