📌 Centralised Exchange (CEX) Summary
A Centralised Exchange (CEX) is an online platform where people can buy, sell, or trade cryptocurrencies using a central authority or company to manage transactions. These exchanges handle all user funds and transactions, providing an easy way to access digital assets. Users typically create an account, deposit funds, and trade through the exchange’s website or mobile app.
🙋🏻♂️ Explain Centralised Exchange (CEX) Simply
A Centralised Exchange is like a traditional bank or stock exchange for cryptocurrencies. You trust the company running the exchange to keep your money safe and handle trades for you. It is similar to using a ticket counter at a cinema, where you hand over your money and receive tickets, rather than trading tickets directly with someone else.
📅 How Can it be used?
A project could integrate a CEX to enable users to buy or sell cryptocurrencies directly within its platform.
🗺️ Real World Examples
Binance is a popular Centralised Exchange where millions of users create accounts, deposit money, and trade a wide range of cryptocurrencies. The company manages all transactions and provides customer support, making it easier for beginners to participate in crypto trading.
Coinbase is another Centralised Exchange that allows individuals to purchase cryptocurrencies using their local currency. Users can easily convert pounds or euros into digital assets, with Coinbase handling custody and transaction processing.
✅ FAQ
What is a centralised exchange and how does it work?
A centralised exchange is a website or app where you can buy, sell, or swap cryptocurrencies. It is run by a company that manages all the transactions and keeps your funds safe on your behalf. You just need to create an account, deposit some money, and you can start trading different digital coins easily, much like using online banking or stock trading platforms.
Are centralised exchanges safe to use?
Centralised exchanges put a lot of effort into security, using things like passwords, two-factor authentication, and storing most funds offline. However, because they hold your money for you, they can be targets for hackers. It is important to choose well-known exchanges and use their safety features to help protect your account.
Why do people use centralised exchanges instead of other ways to trade crypto?
People often choose centralised exchanges because they are straightforward and user-friendly. You do not need to worry about managing your own wallets or remembering complicated passwords for every transaction. The exchange handles everything for you, making it simple to buy or sell cryptocurrencies, especially if you are new to the crypto world.
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🔗 External Reference Links
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