Crypto Exchange
A platform where users buy, sell, and trade cryptocurrencies.
What is Crypto Exchange?
A cryptocurrency exchange is an online marketplace where buyers and sellers trade digital assets such as Bitcoin, Ethereum, and thousands of altcoins. Centralized exchanges (CEXs) — such as Coinbase, Binance, and Kraken — act as intermediaries that hold customer funds, provide order matching, and offer fiat currency on-ramps. Decentralized exchanges (DEXs) — such as Uniswap and Curve — replace the intermediary with smart contracts and allow users to trade directly from their own wallets. CEXs offer greater liquidity, customer support, and regulatory compliance, while DEXs offer self-custody, privacy, and access to newer tokens without listing requirements. Most exchanges generate revenue through trading fees, withdrawal fees, and spread markups.
Example
A US investor buying Bitcoin through Coinbase is using a centralized exchange. Coinbase holds the Bitcoin in a custodial wallet, verifies identity through KYC procedures, and charges a spread plus a transaction fee. In contrast, trading on Uniswap requires a personal wallet and interacts directly with smart contracts — no account or identity verification required.
Source: Investopedia — Crypto Exchange