Hope you all know that cryptocurrency exchanges are the only medium to buy/sell bitcoins or any other cryptocurrencies. We can classify this cryptocurrency exchanges as below.
Classifications of Cryptocurrency Exchanges
3.Hybrid cryptocurrency exchanges
Centralized cryptocurrency Exchanges
Any cryptocurrency exchange website which has a central authority (i.e) admin to control the trading activity is know as centralized exchanges.
In technical terms, This kind of cryptocurrency exchanges will store the traders private key in centralized cloud storage, and the customer will not be able to proceed trading without sending the amounts to the admins control.
1. Easy to use
As the exchanges stores private keys in cloud storage, it will become a honey pot for hackers to steal all the funds.
Decentralized Cryptocurrency exchanges
This kind of cryptocurrency exchanges will not mediate the trading with the governance of the website admin. Which means the admin has no control over the funds, and the private keys will not be stored in any third party cloud storage.
so the trader have to trade cryptos directly from their own hardware wallet.
2. Peer to Peer
* Maximum support to crypto to crypto trading alone, Especially with ethereum.
The above are the major cryptocurrency exchanges types which currently rules the entire network.
The decentralized exchange is an innovative exchange model in cryptocurrency industry which results in high security and instant trading of your digital assets. Exchange websites which perform decentralized exchanges are called as decentralized exchange websites. There is a solid reason for decentralized exchanges to emerge online, Yes. In the past three years (2015–2018), there were around $100bln were stolen from unsecured centralized exchange websites.
Reference : Centralized Vs Decentralized Exchanges