CENTRALISED EXCHANGE (PART -02 )

Centralized exchanges (CEXs) are a type of cryptocurrency exchange that is operated by a company that owns it in a centralized manner.

Key Elements of Centralized Exchanges

There are new centralized cryptocurrency exchanges all the time. However, not all of them will be successful, and it's not uncommon for these exchanges to fold. The success or failure of an exchange is dependent upon a large number of factors. However, one of the key components to success is trading volume.
Generally speaking, the higher the levels of trading volume, the lower the volatility and market manipulation that's likely to take place on that exchange. Volatility is a crucial consideration. Because of the time it takes for transactions to be completed, the price of a given token or coin can change between the time the transaction is initiated and the time it is finished. The higher the trade volume and the faster the transaction can be processed, the less likely this fluctuation is to be problem.
Another crucial element of a successful centralized exchange is security. While no exchange is completely immune to malicious activity like hacks, some are safer than others.
The way an exchange reacts to an event such as a hack is by no means a given. Some exchanges have worked hard to refund customer losses, while others have been less successful in that regard. Still others have shuttered as a result of these types of attacks.
For investors looking to enter the cryptocurrency space, a centralized exchange is still the most common means of doing so. When selecting an exchange, it's important to keep in mind the host of factors which will impact user experience, including which pairs are traded, how high trading volume is, and the security measures exchanges have adopted to protect their customers.
Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.

Fiat/Cryptocurrency Pairs

It's more common for a centralized exchange to offer cryptocurrency/cryptocurrency pairing at this point. This would allow customers to trade, for instance, bitcoin for ether tokens. Fewer exchanges offer fiat currency/cryptocurrency pairs, which would allow, say, bitcoin for USD exchanges.
Some of the largest cryptocurrency exchanges in the world are those that offer these fiat/cryptocurrency pairs, however. Part of the reason for this is likely that they serve as a direct access point to the cryptocurrency market.
Since many investors in the space are relatively new to investing in digital currencies, they may be more likely to turn to these types of exchanges. Some of these exchanges include Coinbase, Robinhood, Kraken, and Gemini.