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CENTRALIZED EXCHANGE: A Centralized exchange is an exchange which operates in a centralized way, that is, having a central authority.Users of centralized exchange do not have access to the private keys of their exchange account’s wallets, this makes users not to have total control over their asset.Transaction is based on central authority approval.

DECENTRALIZED EXCHANGE:Decentralized exchange is an exchange which operates in a decentralized way,that is,without a central authority. Decentralized exchange make use of distributed ledger and therefore does not hold customers’ funds and  information
                        

                                     ADVANTAGES  AND  DISADVANTAGES

     CENTRALIZED EXCHANGE
    High trade volume
    Higher liquidity
   Some centralized exchange allow users to exchange fiat for Cryptocurrency
   Accept direct bank wire transfer, Credit, Debit for fiat payment
   Risk of hacking is very higher
   No privacy at all, high level of identity theft
   Open to government intervention which can lead to a ban.
   It has gain so much popularity because it is user friendly
   Ownership details are made known.
   Many centralized exchanges offer large functionality like margin trading, discount for high volume trading, lending, large amount of financial data.
 .
     DECENTRALIZED EXCHANGE
   Low trade volume compare to centralized exchanges
   Low liquidity
   Dex allows exchange of Cryptocurrency only
   Payments in Cryptocurrency only
   Almost impossible to hack
   High level of privacy
   No government intervention
   Just trying to gain popularity due to lack of simple user interface
   Ownership details are not made known
   Offers are limited compare to centralized exchanges.

LIST OF SOME DECENTRALIZED EXCHANGES
•   IDEX (https://idex.market)
•   RADAR RELAY DEX (https://radarrelay.com)
•   ETHERDELTA (https://etherdelta.com)
•   WAVES DECENTRALIZED EXCHA (https://wavesplatform.com/product/dex)
•   OPENLEDGER DEX (https://openledger.io/market)
•   AIRSWAP ((https://www.airswap.io)
•   CRYPTOBRIDGE DEX (https://crypto-bridge.org)
•   GDEX (http://www.allcmc.com/exchange/gdex)

I would encourage you to check out decentralized exchange LEVERJ.io which is moving to mainnet soon. User interface is simple, will be fast as centralized, and incentives are aligned to encourage market makers.

I am very surprised with this paragraph. It's totally messed up, where the heck do you get that? Tell me what exchange is insured, what amount of deposit is insured, what is the procedure of getting insurance payments? So many questions without answers.

I guess every dex has the same speed with another dex. But the only difficult thing to attract the demand to use the decentralized exchange but the fees has become the main problem that makes a lot of people are still using centralized exchange site rather than dex. There was no a lot of differences in the speed comparison

If given a choice between decentralised and centralised exchange, I would choose centralised exchanges anyday, the interface is normally easier to navigate and I love the fact that the fees are always fixed to a particular value.

Actually there are two assumption that are incorrect. LEVERJ will have the speed of a centralized exchange, with good UX! Also, there are no fees for cancelled orders. Leverj.io is coming out on mainnet very soon.

LEVERJ will have a very smooth interface, even noobs can use. Fixed fees. Mainnet coming very soon.

Centralized is for the people who love high security, active and humble developers, and they has the wallet stored so we don't have to create our own wallet first in our computer.
Decentralized exchange is for the people who just love their privacy and want to make a pretty fast trade so that it can comes to your wallet once you completed the trade.

One of the largest con of DEX is difficult GUI and high fees at current time.
Both of it along with liquidity and volume problems would be solved with increased user knowledge and competition between DEX.

I thought in the first place that each and every each of the cryptocurrency is decentralized or let say, free and secured at the same time, but I just learn lately about that, it is not all that is decentralized, there still some that are centralize just like banks, and it kinda remove the essence of crypto.

I am looking forward for NEX exchange should be really good and easy to use as well.

some of the features you mentioned above are one of the reasons I like CENTRALIZED EXCHANGE like IDEX (https://idex.market)
I really like the exchanger. I often trade on IDEX (https://idex.market)

I think decentralized exchanges would be much more popular if they could solve the problem of liquidity, which is solved by itself, but not in a bear market.

By the way, there is already a topic with a good list of similar exchanges.

https://bitcointalk.org/index.php?topic=5103776.0

Each has advantages and disadvantages. I use Centralized and Decentralized Exchanges, depending on its use. At Decentralized Exchanges you can find coins at a price far enough compared to the Centralized exchange.

I have been using some decentralized exchanges and one of my favorite is DDEX. Some of the new DEX's are better than the older ones like ED.


High security?

We need both - Centralised and Decentralised exchanges because almost all DEX are ETH or WAVES based.
You can't trade coins like DOGE or DASH for example on DEX. And  if you exclude IDEX, the volume is critically low on almost all other DEX. Still, DEX are good for new listing and tokens without paying 2-20BTC in listing fees and are giving us some kind of freedom. 

As for me, it's much easier to use centralized exchange. If you have any problems, you can always ask support for help. But if you need to be anonym in the network it's better to choose decentralized exchanges.

Liquidity is more important to me than its decentralized status. But if a big exchange decides to go the decentralized route (Binance have hinted this) - then I'd certainly prefer to move to a decentralized one.

No insurance for the centralized exchange as well,so if your funds were stolen then you may not get it forever,there are lot of exchange hacks were happened and most time they will just close it without any compensation,only you can withdraw your funds from a closing exchange.

decentralized exchanges will not be able to work for a long time. I think that people are not ready to answer for their own funds and decentralized exchanges will be much slower than centralized. And centralized exchanges will be responsible for losing money

I like decentralised exchanges, because they are much more safe. I do not like the idea that I am losing control of my funds, when I transfer my tokens into an exchange wallet. Thats why I prefer to use IDEX, Fork or Etherdelta.

Yep, unless Binance actually move us to a Binance-owned DEX, I can't see liquidity moving to DEX-es.
Also it's questionable how decentralized DEX-es actually are. IdEx had no problem blocking New York residents from participating...

We really need more of the community to embrace decentralized exchanges!

But why would the community embrace decentralised exchanges? They're illiquid, their user experience is still meh... We're years from massive use of decentralised exchanges.

Yup there is some differences between decentralised and centralised exchange. And the best part of decentralised exchange is the fees and the security. The crypto market is going to free from centralised institution. So always prefer decentralised exchange. But there is some problem and one of the main problem is liquidity.  For most of the coin there is no liquidation and that is bad for a trader. And fiat is also not an option in decentralised exchange. So we have to use centralised exchange sometimes. But I hope that decentralised exchange will be the future.

Okay that is one good table and better to understand. Perhaps you shouldve just stickied something for a better image of it.

I just dont get it. Looking at the table I would still prefer to use decentralized exchange. Why is it that it had a low volume suddenly when this centralized came in.

Aint it better to have a privacy for safety and also low transaction fees. I mean it is almost free rather than paying a lot for a pool transaction which takes forever before it could go back to your wallet.
I just cannot believe how could all of this happen.

It is going to be a gradual process. Centralized exchanges did not start big. As a matter of fact, so many of them started with no or very negligible volume, yet today, they look big, because they have got liquidity.
I feel we should just ask ourselves, what was the attractive force or the strategy that was used to attract traders, who were able to bring in fund to increase the volume.

Haven't heard such thing also. Maybe, he can provide reference links stating that centralized exchanges are insured. I doubt this statement is really true.

Centralized exchanges are now much more popular than decentralized. Centralized exchanges are faster than decentralized. Also, centralized exchanges have a greater volume of trades. Perhaps in the future the situation will change, but at the moment, decentralized exchanges cannot compete with centralized exchanges.

The advantages that you just mentioned are already been there since ages. Decentralized exchange prioritize the security and safety of user by letting no one in charge of storing the money. That also why decentralized exchange kinda slow.

If you are trading with a huge amount of money, I don't think it's wise to choose a decentralized exchange.
With big money, traders are looking for insurance and I believe centralized exchange now are already considering their exchange to be insured
since they are vulnerable on hacking, hence, centralized exchange is still better compared to decentralized.

However, we cannot deny that there are still traders who patronize decentralized exchange because new tokens that are listed are cheap but the volume will tell that only few are trusting their money.

So far, IDEX is my favorite for decentralized and Binance for Centralized.

Thank you for this beneficial post. I only know two decentralized exchange, i hope that my knowledge about crypto would increase as i would read more here in this bitcointalk forum thread. I also hope for safeness of our wallet in a decentralized exchanged.

Maybe it is not best in the features but decentralized are more secured because you still control your funds and there is no centralized exchange is going to give your money back if there is hacker attack your wallet or the exchange itself,you will love everything.

Decentralized exchanges do not have high volume except for idex. That's why people invest more in centralized exchanges. And they are more confident in these exchanges.

the biggest problem with decentralized exchanges is their lack of adoption. if more people started using them then most of the rest of the problems that you mentioned here would be solved. for example their security would improve as bugs are found and fixed, the liquidity will increase and it becomes easier to trade larger amounts and also the features will start improving as people use them and report their requests and improve the open source projects (assuming we are talking about an open source decentralized exchange platform).

You have shared a lot of info but you didn't organize properly which is why your post is not looking good. Try using bbcode table and it will be fixed

I did not not know that someone else also noticed that. The information he has there are useful, but the organization is not so God, which is why the attractiveness is not there.
I am just looking forward to a time that decentralized exchanges will also have increased volume like some centralized.
It is a gradual process, because Rome was not built in a day.

DEX Leverj.io will be going to mainnet this month. Fast as centralized, easy asset management. As long as the UI is simple and straightforward, having custody of your own funds shouldn't be a hurdle for adoption.

Leverj is doing plasma flavour for exchange model, so its decentralised but still high speed centralised feel.  Its achieved by doing all the high computation stuff like the matching and margining  on centralised servers and all the operations within are trustlessly secured by fraud proofs between parent chain and child chain (using basic market rules like time price priority and balance availability, solvency, liquidity). So that DEX won't be slow.

Not years, now using plasma, exchanges can be non custodial and fast.

The problem with most DEX's is there are gas fees for every trade, gas fees for every cancel, signing every order manually, confirmations needed for orders to be accepted, confirmations required for fill before you can exit a position, etc. DEX's UI needs to be infinitely better, and the speed needs to be equal to centralized exchanges. All while being non-custodial....

I used both decentralized and centralized exchanges and to be honest I'm liking more the service of centralized ones. I'm into decentralization but if its for convenience, well we can't deny on how good these centralized exchanges on giving that satisfaction level that every customer wants. I'm not very familiar to say that they are insured but if an accident comes by (which I don't wish to happen) you can't say on how secured and insured your funds there.

One of the good thing about this forum is that you keep learning everyday,when you think you know enough, then you get to see something you don't know yet.Thanks for this info,I guess decentralised exchange might take over if the exchange is able to overcome low volume,charges might not be that important as long as you have your privacy.

The two has its pros and cons CEX outweighs Dex with liquidity benefits despite the fact that Dex gives me opportunities to manage my funds myself from my personal wallet that I Co trol the keys, I'll always choose CEX over Dex. CEX is user friendly u like Dex benefits keeps rolling in.

I think these exchanges have their pros and cons. However, many want to make deals and remain anonymous. If the price of a coin is good for a coin. No matter on what exchange it will be sold. I am sure that the difference will not be 10%.

Well, I like both of these options. ;D

For small comparison, i think DEXs are like Linux and centralized exchanges are like Windows operation system. User should be able to trade with given tools on decentralized exchange by all means. I don't deny the fact about usefulness of centralized exchanges but everyone has different needs,skills,experience so depending on the situation both are required for proper trading.

The most important problem with DEXs is the process of entering and leaving the market. As long as there is an entry&exit being centralized to the market, DEX does not have much logic. Fiat-Crypto-Fiat solution needs to be presented in a way to adapt to the DEX exchange.

In my opinion, the decentralised exchange are safer to trade due to the lesser risk of hackers and the fact that every transaction is opened. The centralised exchange could be very irritating due to their extortion of the masses and they may end up siphoning peoples money without any sanctions. The news on them getting hacked may not be true and they use that as a means of scamming the public.

The problem is for now, people don't think about choosing whether the exchange is centralized or decentralized, in the end they prefer an exchange that has high efficiency and security, even we know that exchanges like Etherdelta / Forkdelta have been hacking incidents right?
For the highest priority, we talk about people's money and security, not other facilities or features that are not too important

You can do atomic swaps directly across chains and between local wallets with Blocknet and BlockDX. It's fast and secure and easy. No sign-up or KYC, Link in my sig

I prefer decentralized exchanges, although I have no confidence in any exchanges. And use the exchange waiting for the storage of funds is very stupid.

It's not a wise decision to choose a decentralized exchange when you do not have the confidence, what benefit you are getting?

Both centralized and decentralized exchange are not good for storing your funds,  it's vulnerable to hacks.

I thought it was not possible to store funds in a decentralised exchange? The concept should be a direct debit/credit between wallets of the users involved in the trade?

decentralizede exchanges have low volumes but they can be used for buying cheap. just make order and wait. or there is already orders with huge pool and small price. on etherdelta any young and perspective erc20 token.

X-Ray - LEVERJ will be as fast as centralized exchanges, and there are no gas fees for cancels or trades. Coming to mainnet veeeerrry soon.

Are there any people who actually use centralized exchanges? Like for instance they really have to use it because there is an advantage in it or their coin is just listed there? Or in general decentralized exchanges are way better or centralized exchanges are way better? And is there a time that trying to exchange your tokens in a decentralized exchange or centralized exchange is better?

Hackers could potentially find a way into any of them so its always a security risk, just because its decentralized doesn't mean its 100% safe. I agree that trust is lacking in may exchanges right now even if they are decentralized because we have seen too many "hacked" stuff recently and we are really afraid what could happen next.

Maybe someone will figure out a way to pour all exchanges into their own wallets on a decentralized exchange and that way get all the money they could until they are stopped? Who knows how it could be done but in the end crypto currency space is getting once more the most trustless place on earth where people only trust themselves and even do that barely.

Just go with an exchange you know and used so far and it doesn't matter if its decentralized or centralized because if hackers aim at a place it will not matter.

Decentralised exchanges are the future of exchanges even Binance knows that, they plan to launch their Decentralised exchanges. They are now in some trials, binance knows that decentralized exchanges have better security feautures than centralized exchanges.

This I agree I have done several trade on decentralized exchange and I can trade safely and withdraw my coins/tokens faster than these centralized exchange and besides we are promoting decentralization, so why not shift to decentralized exchange.

You have perfectly differentiated between centralize and decentralize exchanges, other to this I would like to add, centralize exchanges are fast to operate whereas decentralize exchanges are very slow in operation.
One of the popular decentralize exchange is forkdelta which you forgot to mention. Personally I prefer centralize exchanges over decentralize due to high liquidity. Funds are equally secure in good centralize exchanges so one need not to worry.

This is very helpful for newbies who are just starting their adventure in crypto trading. I would recommend if you could add all the exchanges and more detailed information about them listed on coinmarketcap  HERE (https://coinmarketcap.com/exchanges/volume/24-hour/). It would also be nice if you make it more presentable to the readers and i am sure thay you will get more merit for that. By the way, i prefer trading on centralized exchanges and to reputable ones because they are more reliable, secured and with very good customer support.

There are decentralized exchanges that do not store funds and this is more reasons they are termed as decentralized, except that the exchange that professes to be decentralized is not in the real sense of it, but centralized. I feel more secured on them. The issue is still have with them, is a general one, which is the volume. I am strongly looking forward to a time of positive change on that.

You have done a good job differentiating perfectly between decentralized and centralized exchanges, this will help to make a choice between them, great work OP.

Good information you have got in there, these will surely be useful for some people. Is good to know the advantages and disadvantages of centralized and decentralized exchanges.

Nice comparison I think this is a fair comparison I think OP has experienced trading on both exchanges to come with a good comparison I have good experience trading on DEX and they are good the fee is lower and there is no third party you will get your withdrawal fast and easy when it comes to erc20 tokens DEX is a good place.

And what will you do when all these ERC-20 tokens disappear and no one will needs them - then the decentralized exchanges will also die?

I agree that erc20 tokens come and good maybe what he means is as long as these erc20 exist it is good that it be traded on DEX exchange will they have value, but these DEX's hardly had manipulation or pump and dump compare to some CEX that uses bot to inflate the volume.

I don't like decentralized exchanges because of their high fees and compulsory ETH balance before you can trade. They are usually too complex to handle. The only decentralised exchange I can manage to use is Idex. To me, the rest are just rubbish.

That's true I have to google and ask my friends how to trade here I'm very much used to trading on popular Centralized Exchange that Decentralized exchange made me realized I have to dig deep on what erc20 really is and how they really function, I guess I am more into CEX than DEX.

You have nice guide here. Yeah, centralized and decentralized exchanges are completely different and it is up to you what do you prefer more. As for me I prefer something like both. On the one hand Idex is a good exchange and on the other hand there is better solutuion, Binance is going to lunch DEX

Right. We need both. Though Centralized exchanges have a higher chance to get hacked, but If you withdraw daily or weekly then we are safe enough. Personally, I like DEX for many reasons, but I always use Binance, Kucoin, Bibox too. Because we need both types of exchange to trade cryptocurrency, as you mentioned we can't trade coins in most of the DEX exchanges.

The difference is actually very big, because today there are so many opportunities for that. In order to have real control capabilities of centralized exchanges it is necessary to have very serious access to these opportunities. Now it turns out that all this is nothing more than just a proprietary code.

I won't like decentralized exchanges because many of the exchanges shows fake trading volume  and some centralized exchange also same problem happen .

It means we must be careful when pick an exchange to use. Because if we want or not, we will need them and we can't resist it. But if you need exchanger with less fake trading volume, try big exchanger that already lasted for long time.

Both are very helpful to traders. Centralized Exchange and Decentralized both have advantages and disadvantages. But in people more familiar with Centralized exchange than DEX. It is clear that new people who enter the world of crypto will certainly prefer centralized exchange, because it supports connections for deposits through banks. Whereas DEX, only known by certain people who usually have long been trading.

This is not a secret that a huge number of exchanges today are controlled by bots, which today communicate with each other. I can even assume that many projects have one owner or these guys communicate very closely.

Centralized exchanges are much better compared to me. Look, if exchange got hacked, they would compensate you. also there is a probability when CEX can send you extra amount by fault , in dex it is impossible

It is good to have a post on advantages and disadvantages of centralized and decentralized exchanges, I guess it will help some to know more about both exchanges.

You have summarized important facts clearly.I think still centralized exchanges are better than decentralized ones. Decentralized exchanges are still developing to give user friendly experience. Mostly people have faith on centralized ones.

At the moment, centralised exchanges have a big advantage. All tokens can be tradable on centralised exchanges and unfortunately we do not have this opportunity on DEXs. But I think that decentralised exchanges are more secured and as soon as they will make much more listings, things would change.

In today's conditions, DEXs are not used much. Can be used in great trouble. If DEXs increase their transaction volumes, they always have potential. However, a number of DEX platforms are not sure that the platforms are really decentralized.

Decentralized exchanges are poised to be a big evolution, but at the moment they are lagging behind in terms of UX.

Between centralised and decentralised exchanges, I feel that the trading fees is lower and the volumes are higher in centralised exchanges. I guess this is why more people are trading there.

How's this for a true DX UI/UX (Blocknet's Block DX):

https://i.ibb.co/nRd6jvx/Block-DXui.png (https://ibb.co/PtXFgnq)

+1 for Block DX, built on Blocknet

- decentralized fund storage (trade out of your own wallets)
- decentralized order book
- decentralized order matching
- decentralized asset exchange (atomic swaps)
- 100% of fees are distributed to holders of BLOCK

Unlike other so-called DEXs, the Blocknet Protocol exchanges the actual assets rather than derivatives (colored coins or proxy coins). You can also exchange over 100 coins such as Bitcoin, Litecoin, Dash, Dogecoin, Qtum, DigiByte, PIVX, Zcoin, MonaCoin, Syscoin, Namecoin, Stakenet, LRBY Credits, Phore, etc.

You can see more here: https://blocknet.co/coins/

If you are referring to exchanges getting hacked. Centralized exchanges are more prone to hack, while decentralized exchanges are very hard to hack. So I am not afraid of a genuine decentralized exchange getting hacked.

For me, Centralized exchanges are still miles apart from Decentralized exchanges, the absence of Fiat gateway is a minus to Decentralized exchanges and also their Interface is very poor and slow to use when compared to Centralized exchange. I see some exchanges trying to be creative by creating WBTC and Adding USDC to their exchange this is a  good move but need to do more IMO

I prefer decentralized exchanges. I love when I can control everything myself, including my funds and my transactions.

Of course wn any of them has its advantages. I can't say I support one thing. I use both centralized and decentralized exchanges.

In theory, decentralized exchanges should be better, but so far it does not work and basically everyone chooses centralized exchanges.

Decentralized exchanges are quite cool especially for those with great amount of Cryptos that do not want their identity reviewed. The Decentralized exchanges are also safer.

I think OP doesn't know what he's talking a centralized exchange would be in total disaster once it is being compromised by the hackers. There is no returning of the funds that you already lost and the authority that OP's talking will not going to refund all of the stolen crypto. There is no returning full of your stolen belongings.

Cryptocurrency just like Bitcoin is designed to be your own money, meaning to have full control of your own money so never put all of your crypto in any exchanges because they don't take the responsibility once your crypto is stolen.

Decentralized exchanges are much more reliable and that's what I like most about them. But I also use centralized. Sometimes I miss the opportunities offered by a decentralized exchange.

Well decentralized exchange are good but not so reliable IMO.
Centralized exchange are more secured as users can undergo KYC and they will have an insurance if ever
they will loss their money in case there is a hack.

In decentralized exchange, you just enter your private or password and no KYC and they are not registered so operators could be anonymous.

Well, my belief is that whatever has advantages will definitely also has disadvantages. Decentralized exchanges have advantages likewise disadvantages too. The same thing is applicable for Centralized exchanges.
But in all, I prefer decentralized exchange over centralized exchange because of its high security and one doesn't has to perform a KYC to withdraw.

I am confused by the fact that centralized exchanges are so often subject to hacking. Every year the same thing. Several large exchanges are losing money to their customers.

To be honest, in general, I don’t understand what the difference is. Many say that centralization is worse than decentralization and exchanges, respectively, but what's the difference? It seems to me that there is no difference at all.

The differences, advantages and disadvantages of the centralized and decentralized exchanges are very well explained. It was an article I thought would be very useful especially for individuals at the beginning level. As a result, regardless of the level of information, users should be aware of the services they will use and should know who or where they will be in a possible situation. New investors should definitely look at these information articles and learn about them.

We have got advantages and disadvantages for both decentralized centralized exchanges,to me the major problem of centralized exchange is the privacy problem,no privacy and that make it easy for hackers to hack,but when it comes to functions, i guess it is far better than decentralised exchange and most importantly, it is user friendly, for decentralised, you have some privacy which make your coin to be safe.

I do not use DEX, I am satisfied with Binance, as the most reliable place to trade, and ChangeNOW is also used as a place to exchange without registering.

maybe you only trade with mainstream crypto's but if you are an airdrop or bounty hunter  , you can find dex more useful as they list most alts and erc20 tokies  but  there's no doubt that binance is legit and famous exchange   .


wtf ? what's wrong with you guys ? why alot of you still recomending changenow  ?  arent you are that changenow is now turned into scam  ?  of maybe they are just selective  .

Centralised Exchanges obviously wins decentralised exchanges when it comes to the advantages, one major reason I like centralised exchanges is that you can trade coins and tokens from various blockchains and not just the blockchain that it's built on like Decentralised exchange and you go not need to hold the token of the blockchain because of fees.

why are you talking that it's a scam? have you tried it? do you know any real person who was scammed by changenow? there was only one problem, with that guy who provided fake id, but he got his refund. I'm using it for a long time, WITHOUT such problems

It is great to know the differences between decentralised and centralised,also the shortcomings, decentralised exchanges has got some privacy but limited,why centralised has got so many features but no privacy.

Centralized and decentralized exchanges has got alot of advantages and disadvantages among them,but i guess the simplicity of centralized and the many features has given centralized exchange a edge over decentralized but when it comes to privacy,decentralized is a choice.Thanks for putting these together.

A great analysis showing the difference between decentralized and centralized exchange,going by the disadvantages and the advantages,i will prefer centralized exchange for now until decentralized can add more features.