People often get confused about how cryptos are purchased and sold. The marketplaces where you can exchange digital assets are the crypto exchanges. These exchanges are centralized crypto exchanges and decentralized crypto exchanges. Popular exchanges like Coinbase, Gemini, etc are all Centralized crypto exchanges.
Centralized crypto exchanges are the online platforms used to buy and sell cryptos. They are quite popular as many investors use centralized crypto exchanges for the purchase and sale of crypto holdings.
Centralized crypto exchanges act as a middleman or third party between the buyer and the seller of the cryptos. These exchanges are considered to be more reliable. There are many examples of centralized crypto exchanges such as Binance, Gemini, and many more.
Users have the access to store their money in centralized crypto exchanges and their assets will be in the hands of the exchange. We will have a close look at centralized crypto exchanges by discussing the features, pros, cons, and the best-centralized crypto exchanges.
Let us begin the post and get more details on centralized crypto exchanges.
Features Of Centralized Crypto Exchanges
One of the key features of Centralized crypto exchanges is the trade volume. The more the trading volume, the lesser the volatility will be. Ultimately the chances of market manipulation will also be lesser in that crypto exchange. Safety and security are also important elements of centralized crypto exchanges. We cannot consider any exchange safe from activities such as hacking. Centralized crypto exchanges are considered efficient in providing liquidity and are away from scandals. There are various benefits of centralized crypto exchanges that we will discuss next.
Pros Of Centralized Crypto Exchanges
As we are aware of the elements of centralized crypto exchanges, now let us have a look at what are the various advantages of using centralized crypto exchanges.
The centralized crypto exchanges are considered reliable and authentic. They provide security in trading to their investors. The transactions are reliable as they go through a centralized platform at the centralized crypto exchanges.
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2. Easy To Operate
These exchanges provide a customer-friendly environment to the users. It provides the users with a friendly way of conducting smooth transactions. Investors can easily log in to their accounts and make transactions via the websites of centralized crypto exchanges.
Centralized crypto exchanges are known for providing better services to users. They have custodian services wherein the digital currency is stored. They also provide users with highly secured digital vaults. These services provide a sense of security to the investors.
4. Fast Transactions
The centralized crypto exchanges provide speedy transactions to the users. It ultimately provides the user a better experience and the time is also saved along with an enhanced customer experience.
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Cons Of Centralized Crypto Exchanges
Let’s now see what are the disadvantages of using centralized crypto exchanges.
1. High Fees
One of the disadvantages of centralized crypto exchanges is the high transaction fees. These exchanges mostly charge high fees for the services offered by them. This transaction fee keeps on increasing with high trade volumes.
2. Strict Norms
Since the centralized crypto exchanges are authorized by the government authorities, the rules are also strict. They include KYC norms just like in the case of big banks. Federal agencies may also access the customer data in these exchanges. So, it is a matter of concern for the investors who prefer privacy.
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3. Lesser Variety
The centralized crypto exchanges lack a variety of cryptocurrencies. This leads to lesser options of trading for the investors. These exchanges are concerned about their reputation which resists them from involving all cryptocurrencies and they choose the reputed cryptos for their users.
These exchanges are considered risky because of holding large amounts. They involve the risk of theft or hacking due to the high amounts invested by the users. There is also a risk of bankruptcy in the centralized crypto exchanges.
Best Centralized Crypto Exchanges
As we have discussed various things about centralized crypto exchanges, now let’s have a look at what are the best-centralized crypto exchanges.
- Huobi Global
There are many other centralized crypto exchanges as well. However, we have listed the best ones with respect to traffic, liquidity, and trading volume.
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Centralized crypto exchanges are considered to be safer. Here in this article, we have covered everything related to centralized crypto exchanges including the features, advantages, and disadvantages of the centralized crypto exchanges. You can also invest in cryptocurrencies using centralized crypto exchanges. But, don’t forget to do your homework before engaging in these activities as there is risk involved with them.
Frequently Asked Questions
Q1. Is There Any Centralized Cryptocurrency Exchange?
A. Yes, there are many centralized cryptocurrency exchanges like Binance, CoinDCX, etc.
Q2. Is Coinbase A Centralized Or Decentralized Exchange?
A. Yes, Coinbase is one of the centralized cryptocurrency exchanges in North America.
Q3. Is Dogecoin A Centralized Cryptocurrency?
A. No, Dogecoin is not a centralized cryptocurrency rather it is a decentralized one.