Intro to CEX - Pros & Cons

1. PRO – Trading Volumes

Centralized Exchanges have typically high liquid. These active platforms essentially guarantee your assets can be exchanged easily at any time. Useful in moving large amounts of funds in/out within minutes.

2. PRO – Fiat/Crypto & Crypto/Fiat Currency Conversions

Centralized Exchanges typically support fiat to crypto on and off-ramps, meaning that they allow you to buy BTC or ETH with USD, etc.

3. PRO – Additional Features

Centralized Exchanges offer a vast array of digit assets, and they offer an array of other features such as margin trading, exchange staking, margin lending, etc.

4. PRO – Ease of Use

Most users want an easy to use and appealing user interface. Some exchanges even have different modes such as “pro” or “basic” or “advanced”, etc. for traders of different skill types. They function nearly in the same way as online brokers.

5. CON – Strick KYC Policies

If you’re looking to maintain privacy while trading, then CEX is not for you. Centralized Exchanges subject users to strict know-your-customer policies that can typically require you to upload a photo of your face, and a valid ID (at the least).

6. CON – Not your Keys or your Coins

CEX wallets are custodial, meaning that they ultimately hold authority over your crypto. This presents various risk. Your coins could become temporarily frozen or even seized as CEXs are subject to financial regulations that may change overnight.

7. CON - Hacks

Several CEX’s have been hacked by infamous wankers, losing billions over the years. As a large CEX is holding your funds, they are a prime target for these wankers to steal your loot.