Decentralized and centralized Exchanges

[Akagum]

Although I have been in this Cryptocurrency space for quite sometime now but I cannot tell without mincing words the difference between decentralized and centralized Exchanges.
Can anyone help out please.
What's the difference between the Decentralized and centralized Exchanges ?
Thanks

[1715187672]

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[Pursuer]

you could use google to search for these basic things to find better answers and faster.

in short the difference is in how they operate.
a centralized exchange has a centralized authority that you give your money to and they offer you a platform that you can trade on while only having an account with IOUs and when you want to withdraw they have to allow you to convert those IOUs into real money (real bitcoin for example).
a decentralized exchange however doesn't have that centralized authority, you remain in control of your private keys and your money and participate in a peer to peer platform where you directly trade with other people like yourself. the befit of this is that since there is no "accounts" then there is nothing to hack or basically no centralized point of failure.

[OmegaStarScream]

In short, If speaking about security and privacy, decentralized exchanges are the way to go. If you just want convenience and speed, then centralized exchange are better. I suggest reading these articles[1][2] for better understandings of the pro's and con's of both.

[1] https://coinsutra.com/decentralized-vs-centralized-crypto-exchange/
[2] https://medium.com/herdius/decentralized-vs-centralized-exchanges-bdcda191f767

[oceantiger]

As the name implies the centralized exchange has a centralized authority who manage and operate the account on your behalf. They make payout and receive investment while decentralized (DEX) is under the control of nobody but through the blockchain technology and it is author mode.

[HODL2090]

In simple terms, they both act as intermediaries.
In centralized exchanges, funds being transferred pass through the exchange. You send to them and they send to the receiver, this involves confirmation of transactions, which is sometimes done manually.

But in decentralized exchanges, there is a direct link frim sender to receiver. No confirmation of transactions  required, nor do you need to open an account. You can always log in with metamask.

[Tamilson]

Well I think everyone had mentioned the thing you should know. So now if you're thinking which is better to use, decentralized or centralized?

A lot of pros and cons when using these two. But personally, I'm torn with these as when you want a full security you'll go to centralized but with the privacy you definitely wanting to use dex. Hope one day these two features won't contradict to each other, rather to be use in an exchange site.

[evanescence]

Although I have been in this Cryptocurrency space for quite sometime now but I cannot tell without mincing words the difference between decentralized and centralized Exchanges.
Can anyone help out please.
What's the difference between the Decentralized and centralized Exchanges ?
Thanks

Decentralized -> no central authority, typically runs on a blockchain so it's not just a server that a government can shut down (although they can shut down the actual website).
Most exchanges that claim to be decentralized are really centralized except they're running on a blockchain (etherdelta, idex)

[DavidHall4all]

only matters is, if you hold your keys. 
binance dex fulfill my needs

[squatter]

There's really no such thing as a "decentralized" exchange yet. The best we have are centralized exchanges that don't hold custody of your coins. This keeps you safe from a hack of an exchange's wallets, but there are still other considerations to make.

"Decentralized" exchanges still all use a centralized server infrastructure and the DNS. That's why they're being targeted by the US government and we're seeing them start to implement mandatory KYC on their customers. Using the DNS can also allow attackers to hijack the site registry and phish customer private keys.

[kkgfhj123]

There's really no such thing as a "decentralized" exchange yet. The best we have are centralized exchanges that don't hold custody of your coins. This keeps you safe from a hack of an exchange's wallets, but there are still other considerations to make.

"Decentralized" exchanges still all use a centralized server infrastructure and the DNS. That's why they're being targeted by the US government and we're seeing them start to implement mandatory KYC on their customers. Using the DNS can also allow attackers to hijack the site registry and phish customer private keys.

But going through KYC is also too risky. As per recent news KYC documents were sold
https://www.ccn.com/hacked-customer-data-from-world-leading-cryptocurrency-exchanges-for-sale-on-the-dark-web

I would say it is safer to use exchanges like Changelly and CoinSwitch where is no KYC and they are non custodial too.

[cizatext]

Well they both perform the same functions the centralized and the decentralized exchanges but have different procedure while the centralized exchange requires legal process and have lay down rules such as the KYC process and the rest and it control by an institutions of government to provide security for investors and visitors. Decentralized exchanges on the other hand are those who are anonimus and have no central control.

[Kemarit]

Here are some links that you can look upon:

[1] Decentralized Exchange vs. Centralized Exchange
[2] Decentralized vs. Centralized Exchange what is better?
[3] Centralized and Decentralized exchanges? Which one do you prefer?
[4] Decentralized or centralized exchange?
[5] List of Decentralized/Centralized Exchanges

Rule of thumb is, if you're not comfortable sending your personal data then don't do it, you don't know where your information might end up.

[denzkilim]

There's really no such thing as a "decentralized" exchange yet. The best we have are centralized exchanges that don't hold custody of your coins. This keeps you safe from a hack of an exchange's wallets, but there are still other considerations to make.

"Decentralized" exchanges still all use a centralized server infrastructure and the DNS. That's why they're being targeted by the US government and we're seeing them start to implement mandatory KYC on their customers. Using the DNS can also allow attackers to hijack the site registry and phish customer private keys.

But going through KYC is also too risky. As per recent news KYC documents were sold
https://www.ccn.com/hacked-customer-data-from-world-leading-cryptocurrency-exchanges-for-sale-on-the-dark-web

I would say it is safer to use exchanges like Changelly and CoinSwitch where is no KYC and they are non custodial too.

I also read some articles and news about that KYC "Know Your Customer" system is being used by ill-minded people and they make lots of money with those pieces of information that they get from people. I also agree that use exchanges that don't require KYC but these days most of the exchanges require people KYC especially when they are transferring a huge amount of Crypto Currency.

[LeGaulois]

Well I think everyone had mentioned the thing you should know. So now if you're thinking which is better to use, decentralized or centralized?

A lot of pros and cons when using these two. But personally, I'm torn with these as when you want a full security you'll go to centralized but with the privacy you definitely wanting to use dex. Hope one day these two features won't contradict to each other, rather to be use in an exchange site.

Security you say? Excuse me, but how many centralized exchanges have been hacked over the years?  We hear about hacked exchanges every semester.
Privacy? Most of the people don't care about it, they have no problem to give their ID to any site. The BTC ideology in which the privacy matters is gone some years ago.

[Naida_BR]

Here are some links that you can look upon:

[1] Decentralized Exchange vs. Centralized Exchange
[2] Decentralized vs. Centralized Exchange what is better?
[3] Centralized and Decentralized exchanges? Which one do you prefer?
[4] Decentralized or centralized exchange?
[5] List of Decentralized/Centralized Exchanges

Rule of thumb is, if you're not comfortable sending your personal data then don't do it, you don't know where your information might end up.

I am not comfortable with sending my personal data even if the exchange is centralized or decentralized.
I don't know how this rule of thumb works and what do you mean by this example...
Decentralized exchanges do not ask for personal data.

[Wildwest]

Centralized means that this type of exchange has a center that manages and operates your account. while decentralization is an exchange under the control of anyone except you. Maybe like that

[@prashant]

Basic difference is speed and popularity.centeralized exchanges are high popular because of it's speed and currently there is no fully functionality for decentralized exchange,there some good Dex out there but their features are not comparable to centralised one.generally in Dex you control your wallet whereas in centralized they control it.as hacking attempt are increasing we can see rise in popularity of Dex in the future.

[baghdatis1990]

As the name calls it, centralized exchanges provide us with centralized authority, so the funds transferred must be approved and confirmed. The decentralized system, which is mostly in the crypto market, offers clients more transparent transactions. In the case of the decentralized system, no transaction confirmation is required, and connection can be done by metamask.

[finaleshot2016]

Here are some links that you can look upon:

[1] Decentralized Exchange vs. Centralized Exchange
[2] Decentralized vs. Centralized Exchange what is better?
[3] Centralized and Decentralized exchanges? Which one do you prefer?
[4] Decentralized or centralized exchange?
[5] List of Decentralized/Centralized Exchanges

Rule of thumb is, if you're not comfortable sending your personal data then don't do it, you don't know where your information might end up.

I am not comfortable with sending my personal data even if the exchange is centralized or decentralized.
I don't know how this rule of thumb works and what do you mean by this example...
Decentralized exchanges do not ask for personal data.

I really don't trust DEX after etherdelta have been compromised. They're just listing some low key scam projects to their DEX (definitely money involved) and that's the worst thing i've seen here. There are no volumes in some DEX, so your tokens will might go in the air and disperse. Also, KYC for bounty hunters sounds shady, if the ico project was made in the US, I can accept the fact they need some information to the users/participants of the said project but if it's made in the other countries then requiring a KYC, oh man. I already receive a lot of profit from different campaigns that doesn't requires KYC, they're really doing it for the community.

I really prefer Centralized exchange and it's very acceptable to do KYC in there to maximize the usage of the platform like maximum withdrawals and lesser transaction fees. I can give you my top exchange that will keep safe your identity and has a lot of volume; Kucoin and Binance.

[Eildosa]

You have already been given a lot of information about these exchanges, but it will be difficult to say which one is better. Someone like centralized exchange, and someone on the contrary. You should study them and try them yourself. Then you will choose for yourself a convenient exchange.