TL;DR

• There are pros and cons to both CEX’s and DEX’s.

• We think the reason most of us still use CEXs is: we're all lazy as hell - we started on CEXs and never made the jump, cause we didn't have to.

Full Story

There's a certain level of hypocrisy in the crypto space...

Everyone champions ​decentralization​, but the majority of crypto trades take place on centralized exchanges.

(We're guilty of it).

So, why is that? Let's start here...

When one person wants to buy a token/coin, they need to be paired up with someone else selling that same asset, in the desired amount, at the right price.

That's a lot of plates to spin.

Both centralized and ​decentralized exchanges​ do this matchmaking for us users, in a process known as “order matching”.

Okay, so both types of exchanges do order matching...what's the actual difference?

Centralized Exchanges (CEXs)

Strength: They're real fast. Buying and selling on a centralized exchange is a speedy experience (which is v important if you're a high frequency trader).

Plus, they're way easier to use. Email, password, and proof of ID is all you need to get started.

Weakness: It's one entity, holding a whooooole bunch of other peoples money. If the exchange goes under, your money is probably going with it (*cough* FTX).

Plus having everyones crypto in one place draws the attention of hackers. Oh and you give up a bit of your financial privacy when you hand over your ID.

Decentralized Exchanges (DEXs)

Strength: No sign up needed, as long as you have a ​crypto wallet​, you can use a DEX.

Plus, you have custody of your crypto at all times, so if the DEX were to go down, or experience an outage - your money is safe and accessible.

Weakness: From a new user standpoint, DEXs are confusing as hell! ("What the hell is a '​self custody wallet​,' why can't I just use my email?")

And from a professional trader's viewpoint, they can be slow, putting their trades at a disadvantage.

But all of those competing pros/cons aside...

We think the reason most of us still use CEXs is way simpler than all of that:

We're all lazy as hell!

We started accounts on centralized exchanges because it was the only way to buy crypto with a credit card.

Since then, we've all been too lazy to make the jump from CEX to DEX.