The cryptocurrency global market cap is estimated at $946.88B, a 0.76% decrease over the last 24 hours. Data from CoinmarketCap on June 28th, 2O22.
The first and most important question asked by cryptocurrency newbies is how to learn and get crypto while being protected. That is the centre of great curiosity nowadays. Individual crypto enthusiasts have been answering the first part of the question through webinars, social networking, like twitter, YouTube content, articles, personal essays, and interviews.
When it comes to crypto purchases, the methods of processing, requirements, and security are all important factors. Although the blockchain offers a complete decentralized structure for processing financial information, buying and storing cryptocurrency is not as safe as many might think. For instance, over one million token were created in the space, 20,000 of which are listed on Coin MarketCap, and very few of which are listed on top centralized or decentralization exchanges. The security of this industry is at great stake, billions of dollars being exchanged through crypto exchange platforms.
Shifting from traditional financial market, crypto market is mainly driven by liquidity providers ( buyers and sellers), the contractors and the market economy alongside users state of mind in that given time which can base on many aggregators. It’s not difficult to understand the intricacies of crypto and its inclusive features. Though it may turn into a battle field to safely choose the purchasing method.
What are the methods?
There are many ways to acquire a cryptocurrency, including mining, P2P markets, centralized exchanges, decentralized exchanges, platforms that offer fiat to crypto conversions, crypto auctions, and crypto gambling sites.
Blockchain’s core values are neutrality and independence from any foreign forces, such as regulations, and individual desires to stop a transaction from occurring, like in banks. Essentially, blockchain psycho is trying to get rid of human intervention in any forms during the transaction of the information from one user to the other one. Absolute freedom!
Centralized exchanges ( CEXs) records over $204.21B as trading volume on crypto assets meanwhile Decentralized Exchanges is recording only $2,070,325,329 trading volume at the time of writing. It means that CEXs are mostly used by crypto users.
Let’s take into account the Blokchain philosophy and what is being decided by users.
Centralized Exchange is a trading platform that works as a meeting place for people to exchange their cryptocurrencies. CEX is built by a centralized organization, acting as a third party to store assets, regulate exchanges, and charge exchange fees.
In layman’s terms, CEX is the second attribute to a regulated cryptocurrency activity. That’s why they undergo frequent audits from US Securities and Exchange Commission (SEC) authorities to scrutinize platform operations if found failing in terms of consumer policies. To clarify, the assets of centralized crypto users can be frozen, deleted, removed, blocked, or sued for any crypto business against trading policies deployed by the state. It could happen to anyone. Anyone asset is at risk?
However, users have proven to be more trusting of centralized exchanges than decentralized ones, which eliminate all middlemen and interaction. There are several possible explanations for this.
CEX exchanges have policies in place to protect users from bad transactions, thus the exchanges will make the final decision on whether a transaction will go through. Furthering, the most trusted by traders to hold their assets.
DEX allows all anonymous activity, protecting user identities, and supporting the Satoshi’s vision of a democracy in financial industry. The risk of scam is high, because the liquidity is not high and users can also remove and stop the trading of an asset owned by crypto users. The asset can ghost anything. The risk of being hacked is also very high.
Considering, both platforms have an important part in benefits and risk. Many users have appreciated that and have thus preferred going into the most ensuring user’s safety protocols; CEX!
You may find more analysis on that crucial topic! Here you are with your basic understanding.