A crypto exchange is similar to a Charles Schwab or Fidelity account, but instead of stocks, you’re buying and selling digital assets like Bitcoin and Ethereum. These exchanges serve as marketplaces where users can trade cryptocurrency, either through centralized or decentralized platforms.
Types of Crypto Exchanges
1. Centralized Exchanges (CEXs)
These are run by established companies, including financial giants like Fidelity, which now offers three types of cryptocurrencies for trading. Centralized exchanges often provide security, regulatory oversight, and ease of use for beginners.
2. Decentralized Exchanges (DEXs)
Unlike traditional exchanges, a DEX allows anyone—you, me, or a group of developers—to set up a trading platform on the internet. DEXs operate without a central authority, using smart contracts to facilitate peer-to-peer transactions.
