Centralized cryptocurrency exchanges

Description

Centralized exchanges work similar to traditional stock markets, facilitating matchmaking between buyers and sellers through an order-book-based price discovery system. These exchanges are owned and operated by a company that has total control over all transactions and hold custody over the user’s funds.

Advantages

Accessibility and ease-of-use

High liquidity

Advanced trading tools (margin trading, stop loss, lending, etc.)

Disadvantages

Users do not have access to the private keys, meaning the exchanges have full control over the users’ money

As the exchanges hold custody over large sums of money, they are a common target for hackers

Transactions happen off-chain, giving users no way to track them

Possibility of manipulative practices (front-running, wash-trading, etc.)

Providers

Forbes put together an extensive list and review of most major cryptocurrency exchanges in operation.