In 2009 when the first blockchain-based cryptocurrency, Bitcoin was introduced, it came at a time when financial institutions were going through a crunch.
At the time, not many people believed that cryptocurrency could be profitable, however, the few who invested in it at the early stage got more than their money’s worth, and that paved the way for the creation of several cryptocurrencies.
With more cryptocurrencies, came the need for people to be able to trade cryptocurrencies with each other, and thus, cryptocurrency exchanges came to being.
A cryptocurrency exchange functions like a stock exchange where instead of stock trades, cryptocurrencies are traded. It is basically a platform that facilitates the trading of cryptocurrency assets based on the market prices at the time of the trade.
There are three types of cryptocurrency exchanges:
Centralized Exchanges (CEX) Decentralized Exchanges (DEX) Hybrids (CEX + DEX) Comparison
This is the very first type of exchange that was available when the need to trade cryptocurrencies came up. The operations of the exchange are centralized, and that means activities are overseen, or governed by a central authority.
Customers are not usually in total control of their assets. The exchanges can be