Trading
Exchange
A platform that allows users to buy, sell, and trade cryptocurrencies. Exchanges can be centralized (CEX) like Binance or decentralized (DEX) like Uniswap.
Last updated: January 5, 2025
What is a Cryptocurrency Exchange?
A cryptocurrency exchange is a platform where you can buy, sell, and trade digital assets. Exchanges provide the infrastructure for price discovery, order matching, and secure transactions.
Types of Exchanges
Centralized Exchanges (CEX)
Operated by companies that manage the trading platform:
Characteristics:
- User-friendly interfaces
- Fiat currency support
- Customer support
- KYC requirements
- Custodial (exchange holds your keys)
Decentralized Exchanges (DEX)
Automated trading directly from your wallet:
- Uniswap - Ethereum-based
- PancakeSwap - BNB Chain
- dYdX - Derivatives DEX
Characteristics:
- Non-custodial (you control keys)
- No KYC required
- Smart contract-based
- Crypto-to-crypto only
- Higher learning curve
How Exchanges Work
Order Book Model
- Buyers place bids (buy orders)
- Sellers place asks (sell orders)
- Exchange matches orders
- Used by most CEXs
Automated Market Maker (AMM)
- Liquidity pools replace order books
- Algorithm determines prices
- Used by most DEXs
Key Features to Consider
Security
- Two-factor authentication
- Cold storage policies
- Insurance coverage
- Track record
Fees
- Trading fees (maker/taker)
- Deposit fees
- Withdrawal fees
Liquidity
- Trading volume
- Spread between bid/ask
- Slippage on large orders
Supported Assets
- Number of cryptocurrencies
- Trading pairs
- Fiat options
Choosing an Exchange
Consider your needs:
- Beginners: Coinbase, Gemini
- Low fees: Binance, OKX
- US users: Kraken, Coinbase
- Derivatives: Bybit, Bitget
See our complete exchange comparison to find the best fit.
Ready to Start Trading?
Now that you understand exchange, explore the best exchanges to begin your crypto journey.