With the birth of cryptocurrencies, also known as digital currencies, and the spread of its first protocol, Bitcoin, the need to have platforms that would allow exchange among users arose. Just like with the traditional fiat coins.
History of crypto exchange
The first bitcoin exchange that emerged was BitcoinMarket, announced on Bitcointalk (a public forum where blockchain enthusiasts, developers and crypto investors host Bitcoin-related discussions) in 2010 and launched the same year.
Here is an article about the history of crypto exchanges.
It was the first of many. Over the years, the enthusiasm for cryptocurrencies has grown increasingly: projects, protocols, utility tokens and dedicated blockchains have been created, and therefore, the platforms where users can exchange their cryptocurrencies have also increased.
Originally, these exchange platforms were born under “crypto exchanges”. In conjunction with the birth and spread of DeFi, which best expresses the concept of decentralization on which protocols and cryptocurrencies are based, there was the need for a different label which would emphasize the centrality of a company or organization behind them.
What’s the difference between centralized and decentralized exchanges?
Although the popularity of DEX did not reach the level of their centralized counterparts for a long time, they occupy an important role in the storyboard of cryptocurrencies, especially during the DeFi hype, the daily trading rate was overcome. But what are the real differences between the two, and why choose one over another?
As a rule, centralized exchanges operate under regulatory supervision and have KYC and AML policies built in, and they require users’ private keys to their integrated wallets and addresses. In short, they keep your funds for you and directly access the stored crypto assets. At the same time…