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What is CEX?

Thanks to a centralized exchange, anyone with an internet connection may discover and utilize cryptocurrencies (CEX). A cryptocurrency exchange primarily serves three purposes.

  • Order matching: If a buyer wishes to buy bitcoin (BTC) for $20,000 and a seller intends to sell bitcoin for the same sum, the exchange aligns the orders of the two parties.
  • Clearing Counterparty: If you paid $20,000 (USD) for one bitcoin (BTC), the exchange will make sure you have $20,000 (USD), transfer the USD to the seller's account, then send the freshly purchased BTC to your account.
  • Custodian: Once deposited, both money and cryptocurrency are in the exchange's care. This suggests that you are now placing the same level of trust in the exchange as you would place in a bank.