Digital currencies have become commonplace for many people for a long time. They are widely used as a means of payment. They are also an attractive investment destination. It is most convenient and profitable to buy electronic assets on specialized trading platforms.
Cryptocurrency exchanges differ in two types: decentralized and centralized. In this article, we will look at the second option of trading platforms.
Centralization: what is it?
In the case of cryptocurrency exchanges, centralization means that traders entrust their capital to a third party. Previously, all companies and institutions operating in the finance sector were considered centralized. They acted as an intermediary, whose services they used when working with various types of assets. For example, customers transfer their money to a bank. He, in turn, gains control over them.
In many situations, this approach is safer than keeping and managing money on your own. Banking structures pay great attention to reliability issues. They have a whole staff of employees specialized in security matters. In addition, banks provide customers with other services. Since they have large amounts of funds, and have a trusting relationship with clients, they have the opportunity to engage in lending.
Centralized crypto exchanges are not much different from banks. Clients trust them with their money. Moreover, such a trading platform has the right to dispose of them. Having a trusted intermediary simplifies your work and helps you quickly restore access to your profile if your password has been lost.
This approach removes responsibility from the user for keeping money. Surely, many have heard stories about how investors lost their funds due to the loss of a key to a hardware wallet. If their assets were on the account of a centralized crypto exchange, then this situation would not have happened. In this case, the solution to the problem is simple. It would be necessary to contact the support service of the centralized crypto exchange, and provide them with the documents necessary to establish an identity. The user would then receive a new password.
Working with fiat currencies
Not all centralized crypto exchanges support transactions with fiat currencies. However, all such platforms have crypto / crypto pairs. For example, you can exchange AVAX to CAKE. Let’s list the most popular centralized crypto exchanges that support fiat currencies:
- Robinhood. The site supports buying / selling BTC and ETH for regular money.
- Kraken. The crypto exchange works with a variety of pairs in which fiat money is present. As a rule, we are talking about USD and EUR.
- Gemini. The site is geographically located in the United States, and meets the requirements of government regulators. Supports fiat currencies.
- Coinbase. It is one of the most popular cryptocurrency exchanges in the world. On this platform, you can trade a wide variety of currency pairs.
As you can see, finding a fiat-backed crypto exchange is not so difficult. We have listed the most reliable and popular sites. However, there are many other similar cryptocurrency exchanges.
Security of centralized crypto exchanges
No centralized marketplace is 100% hacker-proofs. History knows several major exchange hacks. However, in most cases, all losses to users were compensated.
Decentralized marketplaces can be hacked. In addition, users must independently monitor the security of their accounts. Store passwords carefully. If you neglect security issues, then no exchange can protect your money. The situation is similar with ordinary banks. Read more on https://alligat0r.com/coins
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