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Decentralized exchanges also known as DEXs, are in a stage of rapid growth at the moment. They offer an alternative for any of the user who does not want to trust a third-party with their funds
In this article, we will provide a complete guide on the Decentralised exchanges and check out its overall aspects. Let us look in detail in this review now,
What is a Decentralized Exchange?
A decentralized exchange is a platform that eliminates the middleman and allows the users to trade cryptocurrency directly with one another. This ensures that the traders are in full control of the funds at all times of the transaction.
The decentralized exchanges eliminate the risk of hacking due to the distributed network of the nodes. They also overcome the issue of the server downtime which is faced by the users during trading.
They provide an open and transparent network that makes the crypto trading accessible to everyone. There are several decentralized exchanges that are already live and offering peer-to-peer trading across a range of cryptos.
How is a DEX different from a Centralized exchange?
In the case of the centralized exchanges, the funds and the order books are being held by the server while a transaction takes place. However, there is no involvement of a central server in case of the decentralized exchanges. This is because the participants of the transaction control the funds of the users.
It is difficult to keep the users anonymous in centralized exchanges. However, all the transactions are anonymous and are encrypted in the case of the decentralized exchanges. This enables users to enjoy their privacy without disclosing all their personal details.
The decentralized exchanges subsequently minimize the risks of hacking and server downtime due to the distributed nature of the network. The fees offered are also minimal when compared to the centralized exchanges.
Benefits of DEX
1) Faster and Cheaper Transactions: The decentralized exchanges are able to perform faster transactions as it eliminates the involvement of third-party. It also helps in the reduction of the overall fees associated.
2) Secure: The decentralized exchanges are comparatively safer than centralized exchanges as the user information is not being stored on a central server. The attack remains localized even if the hacker gains access to the user’s information, instead of the whole network.
3) Integration with Hardware Wallets: The decentralized exchange provides the ability to integrate directly with a hardware wallet like Trezor and Ledger Nano S. The users can directly transfer from their hardware wallets to the smart contracts offered by the decentralized exchanges.
Learn more : https://coinpedia.org/beginners-guide/what-is-decentralized-exchanges/