Differences between DEX and CEX in the Crypto World

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This time we will review exchanges or asset exchange platforms in the crypto world.

This of course will be very suitable for those of you who want to increase knowledge about the world of crypto.

Apart from that, this is also for those of you who just want to start investing in crypto.

Indonesia is often the concern of many parties in terms of crypto investment. This can be seen from the many crypto assets listed on various Indonesian exchanges.

We all know that in the crypto world there are exchanges or platforms for exchanging or trading crypto assets.

For example, Indodax and Tokocrypto for Indonesia.

The names of the two exchanges are of course very familiar to domestic crypto asset investors.

Along the way, it should be noted that there are two types of exchanges.

Each exchange is DEX or Decentralized Exchange and CEX or Centralized Exchange.

At this time we will try to explore the two types of exchanges that can be accessed by the public.

For those of you who want to become crypto asset investors, of course you need to know about this.

So, you can find out which exchange to choose when you want to invest in crypto assets.

Immediately, let's review the differences between DEX and CEX and explain them so we can understand these two things.

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The difference between DEX and CEX

Crypto illustration - Freepik Message Bappebti - Crypto Whitepaper
Crypto illustration – Freepik

We will find out about both things in the crypto world.

DEX is an acronym for Decentralized Exchange and CEX is an acronym for Centralized Exchange. Let's review what DEX and CEX are and the differences between the two.

What are DEXs?

DEX or Decentralized Exchange is a peer to peer (P2P) platform that connects buyers and sellers to exchange and trade crypto assets.

DEX uses smart contracts and utilizes blockchain technology with a decentralized concept.

Later, every transaction on the DEX will be recorded on the blockchain without any centralized authority.

DEX has a decentralized nature that allows everyone to carry out trading activities of buying and selling crypto assets using smart contracts.

DEX Example:

What is CEX?

Furthermore, CEX or Centralized Exchange is a platform for trading and exchange of crypto assets that is regulated by a centralized company or institution.

CEX exists as a third party that facilitates buyers and sellers of crypto assets to store and buy and sell crypto assets.

Within CEX, trading volume of crypto assets is higher when compared to DEX.

There are a number of CEXs in Indonesia which are very popular in the crypto world.

Here's a CEX example:

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The difference between DEX and CEX

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The difference between DEX and CEX broadly lies in whether or not there is a centralized company or institution that is a third party to store and bring together sellers and buyers of crypto assets.

DEX is known not to involve third parties to store crypto assets.

However, DEX uses smart contracts in selling and buying crypto assets.

Meanwhile, CEX is under the auspices of a centralized company or organization that has a role as a third party.

To carry out crypto investment activities you can use CEX or DEX.

Of course, you can choose which exchange to invest in after knowing the difference between DEX and CEX.

For information, crypto investment is a high-risk thing.

So, we must pay attention to a number of things before carrying out these activities.

Like, doing thorough research on the chosen crypto project to invest in.

Then understand the track record of these crypto assets and use cold money to carry out these activities.

Make sure that the decision you make to invest is the result of the research you did.

Understand all the advantages and risks of investing in crypto assets so we can find out.

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About VCGamers

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VCGamers is the pioneer of the web-3 ecosystem for all gamers in Indonesia.

VCGamers raised US$2.6 million or equivalent to IDR 37 billion in seed funding led by BEENEXT and Rans Venture in mid-2021.

Supported by Blockchain technology, VCGamers launched a cryptocurrency called $VCG Token which can be used as a whole to support the VCGamers ecosystem.

$VCG operates on the Binance Smart Chain and is built on top of a platform-agnostic and game-agnostic social trading network, token staking and NFT assets that will be universally integrated through existing infrastructure and communities. So, later it can provide benefits for any metaverse that is connected to it.

Crypto article by PINTU

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