Though cryptocurrency itself is decentralised – as explained in our basics of cryptocurrency section – the standard model for exchanges is a centralised one, which is why you’ll see the acronym CEX – Centralised Exchange.
This is a big point of debate within the crypto community because using a CEX is a custodial option – remember ‘Not your keys, not your coins.’
As part of the process of creating an account with an Exchange you automatically get a web wallet.This is like an online bank account or App where you can check your balance in fiat (Euro/Dollar etc) which hopefully increases over time.
Any cryptocurrency held in your new exchange wallet is in the custody of the exchange which is why Security should be a huge consideration in the process of choosing an exchange. Ensure you follow best practice for securing your exchange wallet is also crucially important.
Your cryptocurrency exchange wallet will allow you to do the following, which were covered in the previous article in this section:
- Send your crypto to another person/service
- Receive crypto from another person/service
The trading features of your cryptocurrency exchange account will allow you to:
- Buy cryptocurrency
- Convert your crypto for other available currencies
- Sell & Withdraw
All of those are covered in the next article.
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