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Just as browsers are gateways to the Internet, crypto exchanges provide users with a point of entry to the vast world of cryptocurrencies.
Crypto exchanges are like open markets.
They act as intermediaries between buyers and sellers, enabling them to buy, sell, or trade crypto assets. Users can also earn interest on their coins or even get crypto-backed loans.
Exchanges keep records of all buy and sell orders, sorted by price. They match buyers with sellers depending on the buyer's bid and the seller's asking price.
The trade is executed when the perfect match is found.
There are two types: centralized exchanges (CEX) are easier to use, with a more user-friendly interface and customer service option, while decentralized exchanges (DEX) require blockchain access and are more advanced.
Centralized crypto exchanges drive mainstream crypto adoption.
They enable users to get all the benefits of buying and holding crypto without requiring deep knowledge of blockchain technology.
CEXs are great for crypto beginners. Before choosing one, there are a few factors to consider: the exchange's reputation, licenses and registrations; its deposit/withdrawal limits, payment methods, and its fees.
Hint: Crypto exchanges bridge buyers and sellers, facilitating the exchange of cryptocurrencies.