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Centralized exchange Vs Decentralized exchange

Oct 22, 2017 Posted /  17283 Views

Centralized exchange Vs Decentralized exchange

A lot has been heard and written about cryptocurrencies, people have started to put their money in the digital currency concept. But what makes these digital currency different from other? The fact that these virtual currencies are in the digital form and they are decentralized is the most sublime thing of the currencies. They are not under any government body is the fact that they differ from other form of currency which has allured many people around the globe. Let us know more about the differences, pros and cons about both Centralized exchange and Decentralized exchange.

Decentralized exchange

What it is?

It is an exchange market that does not depend on any third party service to hold the customer's funds. Alternatively,the trading happens directly amongst the users in a peer to peer network via an automated process. This system can be attained by making a proxy tokens (they are crypto assets that represent a certain fiat or a crypto currency) or else assets (which can constitute shares in a company) or via a decentralized multi-signature escrow system, amongst other solutions that are presently being developed.

What are the Pros:

1. User can control their funds
2. Anonymous
3. There are no hack for central server & downtime
4. There are no trading fees
5. There are no personal documents to apply

What are the Cons:

1. It is not easy to use and can not be used by the beginners

2. They have basic features

Few decentralized exchanges:

1. BlackHalo

2. Coinffeine

3. Blocknet

Centralized exchange

What it is?

It is basically a website that handles the trading of bitcoin into fiat or any other cryptocurrencies. The basic purpose for an exchange is to permit a person to trade bitcoin for fiat currency and to other cryptocurrencies ( like litecoin, ethereum, etc, ripple).

What are the Pros:

1. It has advanced features
2. It is easy to use ( but not for all )
3. It has advanced tools
4. Liquidity

What are the Cons:

1. The Exchange control funds

2. It requires personal documents require ( for few features )

3. It might face with downtime or hacking attempts

4. It is not anonymous

Few centralized exchanges:

1. Poloniex

2. Bittrex

3. BTC-E

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Tags: bitcoin decentralized exchanges centralized exchanges exchanges

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