The Rise of Cryptocurrency Exchanges

In the early days of cryptocurrency, crypto exchanges were few are far between, but before long their number increased dramatically forming an integral part of the industry and responsible for the price and volume of the vast majority of cryptocurrency sales and liquidity. In this article I take a closer look at one of the latest contenders, but first let’s look back on the emergence of this critical part of the cryptocurrency market.

What is a cryptocurrency exchange?

A crypto exchange is an online service which facilitates the trading of digital assets (cryptocurrencies). Various currencies are traded in pairs, the most popular of these being Bitcoin. For example, the trading pair BTC/EOS allows us to buy EOS with Bitcoin, whereas EOS/BTC allows us to sell EOS for Bitcoin (or buy Bitcoin with EOS).

Centralized or Decentralized?

The two types of exchanges are Centralized (CEX) and Decentralized (DEX). In a CEX environment, the exchange is in complete control and holds all the private keys. A DEX by it’s very nature is not controlled or managed by one entity. It is a peer to peer exchange. The main advantage of a DEX is that all coins/tokens are stored in the trader’s wallet rather than on the exchange itself. Both have their pros and cons, but it is felt that DEXs are more secure given their peer to peer…