Centralized and Decentralized exchanges: What’s the difference?
The rise in the adoption of cryptocurrencies has led to the introduction of a few new concepts that could be confusing. Like what on earth is DAP, FOMO, FUD? We’ve written articles on these concepts before, but it’s ok if you’ve missed them. You can join our Telegram community to ensure you never miss any relevant information about the crypto industry and how you can take advantage of it.
This article is meant to touch on a fairly old concept, Crypto Exchanges. We’re going to be focusing specifically on p2p crypto exchanges. We’ll go over what they are? And what makes them important?
What is a p2p crypto exchange?
A crypto exchange is a platform where you can buy or sell cryptocurrencies.
A p2p crypto exchange allow crypto traders to buy and sell with each other. Think of it as a virtual marketplace but for crypto. On ValorExchange, only our verified users can trade cryptocurrencies. This is a security measure to ensure that everyone you interact with on the platform is a real person.
There are basically two types of p2p crypto exchanges, such as Centralized exchanges and decentralized exchanges.
What is a Centralized p2p exchange?
Imagine going to your local market, and everything is sectioned or organized. The traders are verified, and if you have a problem with a transaction you made with a seller, there’s an office you can report to where the issue would be resolved in minutes.
This is how we operate on ValorExchange and when we say centralized exchanges, that is what we’re talking about. Centralized p2p exchanges are exchanges whereby a third party is used to secure transactions on behalf of a user.
What is a decentralized p2p exchange?
A decentralized p2p crypto exchange (DEX) is similar to a centralized exchange. They operate without third-party involvement, and the cryptocurrencies are saved on the blockchain.
Centralized p2p exchanges vs Decentralized p2p exchanges.
Both types of exchanges do the same thing but in very different ways. Here are some differences between centralized exchanges and decentralized exchanges.
Security: Security is critical. You don’t want to sleep with your eyes open because your cryptocurrencies are saved online. Some decentralized p2p exchanges are safe, but they’re still not free from hackers.
However, this is when we shine. ValorExchange is a safe, fast and secure way of saving, transferring, buying or selling your cryptocurrencies. Our support team ensures that your account is secure 24/7.
We wrote an article on how you could also contribute to your account’s safety. These tips would help take your account one step further away from unwanted third parties.
Popularity: Centralized p2p exchanges are the most popular option among the two. This means there are more people exchanging their cryptocurrencies in centralized exchanges than in decentralized exchanges.
If you want to easily use your cryptocurrencies for your day-to-day transfers and exchanges then try opening an account on ValorExchange.
Speed: Centralized p2p exchanges are faster than decentralized ones. Reports say it takes an average of 10 milliseconds to complete an order using DEX, but it takes over 15 seconds or more to execute an order on a centralized exchange.
It doesn’t have to end here. There is so much that you don’t know about cryptocurrencies that we want to share with you. You can join us on Telegram and learn how to use cryptocurrency for more than just holding.