In the old days, if someone needed his money, he went to the bank. He would fill out a form and stand in line. Then he would hand in the form, wait while someone counted the money. The new world of crypto-currency is a different story. Here's how crypto exchanges work.
Centralized crypto-currency exchanges
A centralized crypto currency exchange looks like a central platform where cryptos are bought and traded. More information at philipp morris stock. These exchanges have a third party that helps make the transactions to ensure they go as planned, much like a bank. This may seem counterintuitive, as one of the founding principles of cryptocurrencies was a decentralized network, but exchanging a fiat currency for other cryptocurrencies may require a third party to make sure everything goes as smoothly as possible. Fiduciary currency is just a fancy term for traditional, established currencies like the US dollar. A centralized crypto currency exchange can make it easier to buy your crypto with real money and can guarantee that the transaction will go as planned. In addition, they can make it easier to connect your bank account or debit card in order to purchase crypto currency. Once you own crypto currency, you can also trade it on centralized exchanges. So, if you have Bitcoin and you want to buy Litecoin, you can do so on a centralized exchange. Centralized exchanges are more common than their decentralized cousins.
Decentralized crypto-currency exchanges
A decentralized crypto currency exchange, or DEX, does not have the third party found in centralized exchanges. Decentralized exchanges are arguably closer to the spirit of the blockchain that launched the crypto-currency world, as they are open source and rely on users to exchange between peers. In theory, a decentralized crypto-currency exchange could be more secure than a centralized exchange. Because there is no central entity or server to hack, it may be harder to steal crypto currency. Fees can be lower and your transactions can also be processed faster in a DEX. DEXs do have some drawbacks compared to their centralized counterparts. You may need to be a bit more tech savvy, as DEX often doesn't offer easy transfers from bank accounts or debit cards to buy crypto currency.