Broadly, there are two categories of cryptocurrency exchanges: centralized exchanges and decentralized exchanges. Each category has its advantages and disadvantages.
basic exchange
The Central Crypto Exchange (CEX) is managed by the organization. Centralized exchanges make it easy for users to start trading cryptocurrencies by allowing them to convert their fiat currency, such as dollars, directly into cryptocurrencies. Most cryptocurrency trading takes place on centralized exchanges.
Some cryptocurrency enthusiasts oppose centralized exchanges because they go against the decentralized spirit of cryptocurrencies. Worse, according to some crypto users, a company or organization may require users to follow know-your-customer (KYC) rules. It requires each user to reveal their identity, as when applying for a bank account, to prevent money laundering and fraud.
There is another problem with centralized exchanges: hacking. Thanks to CEX, the exchange continues to trade cryptocurrency on its platform, at least in the short term, while trading is still ongoing, increasing the risk of asset theft by hackers.
To address these risks, centralized crypto exchanges have increased security in recent years. Among other tactics, they now keep most of their clients' assets offline and take out insurance policies to cover crypto losses in the event of an attack.
If you want the convenience of a centralized exchange, you can reduce your risk by moving your cryptocurrency from an exchange to a separate hot or cold wallet.
decentralized exchange
Decentralized Crypto Exchanges (DEX) are responsible for facilitating and verifying the trading of cryptocurrencies. Anyone who wants to join the DEX network can certify transactions, just like cryptocurrency chains. This can help increase accountability and transparency, and ensure the continued operation of the exchange, regardless of the status of the company that created it.
The problem is that decentralized exchanges are less convenient not only in terms of interface, but also in terms of currency conversion. Decentralized exchanges, for example, do not always allow users to deposit dollars and exchange them for cryptocurrencies. This means that you must already own crypto or use a central exchange to get crypto that you will then use on the DEX.
You will likely be involved in direct peer-to-peer transactions. This means that it may take longer to find someone willing to buy what you are selling, and if liquidity is low, you may need to accept a discount to buy or sell small volumes of crypto quickly.
Global crypto exchange
There are around 600 cryptocurrency exchanges around the world that invite investors to trade Bitcoin, Ethereum and other digital assets. But cost, quality and safety vary widely. With an emphasis on regulatory compliance, Forbes Digital Assets ranks the top 60 cryptocurrency exchanges in the world.