With the rising adoption of Cryptocurrencies, there was a need for places to either buy these Cryptocurrencies or exchange them for physical Fiat. That's where Crypto exchanges come into the picture. An exchange is a market place for cryptocurrencies where users can buy and sell coins.

Cryptocurrency exchanges are of two types; centralized and decentralized.

A centralized exchange (CEX) functions much like a traditional bank. First, a centralised exchange has an owner who runs it, e.g Binance is owned by CZ. Second, the centralised exchange is responsible for the security of its users. They control the users finds, and so when anything happens to it, they are blamed for it. Lastly, centralised exchanges are controlled by the laws of the land. Centralised exchanges are registered with the law of the land and can be controlled.

A centralised exchange control the user funds and this was against what Cryptocurrency was all for. Crypto was for decentralisation and the power not being in the hands of one person or a few people. And so with cases of hacks to centralised exchanges we got what is called Decentralised exchanges (DEX).

A decentralized exchange is a platform that just like the name (decentralised) says, it allows users to fully control their own funds, without any intermediaries on the  exchanges. As you know, coins that are stored in a third-party service do not belong to you, they belong to the exchange and they can be used for anything. That's what led to the rise and growth of decentralised exchanges, they didn't control your funds so they could not be hacked or stolen.

I will not tell you what exchange to use or which is the best. Both have their flaws and strengths, but when looking for an exchange to use here's what you should look out for when choosing an exchange to use;

LOW FEES:

The Trading commissions on the platform are what most crypto traders check for when looking for an exchange to use. Centralized exchanges typically charge a percentage on each transaction. Commissions on decentralized exchanges resemble traditional transaction fees, only you pay to confirm your transaction on the blockchain. Typically, such a commissions should not exceed one dollar in equivalent. So you can choose the exchange with lower fees.

TRADER ANONYMITY

Anonymity is one of the key tenets of Cryptocurrency. Many went into using it because it was untraceable and you could not be tracked. So you want an exchange that helps it remain that way. Most traders run away from exchanges that have strict Know-Your-Customer (KYC) requirements. It is sure another factor to look into before choosing am exchange to bank with.

These are just two of many other factors before choosing what exchange to plac your money and trade in. Though centralised exchanges are the more popular eg Binance, Coinbase, Bitfinex etc, decentralised exchanges also have a lot to offer their users.