Centralized cryptocurrency exchanges have made trading Bitcoin and other cryptocurrencies more accessible to just about everyone who wants to invest in the digital asset.
In a KYC, or know your customer rule, centralized exchanges have their own set of benefits for both users and investors alike.
A decentralized exchange platform is unregulated and allows for peer to peer trading run by smart contracts and Blockchain. While this may seem to be better in terms of security and privacy, centralized exchanges have the edge when it comes to wallet security and curbing illegal transactions.
Here are 4 advantages of centralized crypto exchanges:
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Faster Trading Experience
Centralized exchange platforms are champions when it comes to processing speed and transaction turnaround time. The infrastructure can support hundreds of thousands of Bitcoin processes day in and day out, and are far superior in terms of liquidity and volume.
Trading is readily available since you won’t have to wait until someone agrees to a cryptocurrency trade. Also, you won’t have to worry about not being able to cash in when the right condition comes along.
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Drives Adoption Rate Further
Centralized crypto exchanges are the unsung heroes in the cryptocurrency industry. They serve as the portal or the gateway to the trading world- without it, the average layperson will have never heard of Bitcoin, much less invest in it.
It’s easy to link centralized crypto exchanges to stock exchanges, and they’re similar in that they allow a quick and easy way to start trading cryptocurrencies. The more people adopt cryptocurrency the healthier the economy and token value.
Allows Fiat to Cryptocurrency Transactions
Crypto trading starts when you invest in a cryptocurrency you like. The main benefit of a CEX, or centralized exchange is that it’s a one-stop shop for when you’re a beginner and wish to put in some capital to start trading.
Most reputable platforms allow for dollar-to-Bitcoin purchases, and some will even let you exchange it straight to lesser-known cryptocurrencies. A decentralized exchange won’t have this option and makes investment entry a bit more difficult because it involves two steps instead of just one.
When you’re ready to cash out or withdraw your earnings, a centralized exchange is the quickest and often the best solution. Simply log in, choose to trade your cryptocurrency to fiat and wait for the results to come in.
You Can Get Insurance Coverage For It
Aside from the usual slew of security measures a centralized cryptocurrency exchange can be added to insurance policies or have their own.
In the event that the exchange is hacked or when there’s a security breach and all your assets are lost, you can file a claim and get it back. The greater the coverage the more trust it inspires, thus driving more investment traffic.
A centralized exchange is the most popular form of cryptocurrency exchange out there. It’s a good place to start for beginner crypto investors and those who are looking to diversify their investment portfolio.