There are three different type of crypto exchanges the Decentralized, Centralized and Hybrid. But how do they differ?
For centralized exchanges, they have a third party that helps conduct transactions to make sure they go through as intended — similar to a brokerage and a potential risk according to Sofi.com is the inherent in some centralized exchanges is that these exchanges, being held by a single entity, are more vulnerable to an attack.
How about decentralized exhanges? According to the definition given by Sofi Learn, Decentralized Exchanges (DEX), operates without the third party commonly used centralized exchanges. You could say decentralized exchanges are closer to the spirit of the cryptocurrency world because they are open source and depend on users to trade peer to peer.
Hybrid is a mix of both. the goal is to give end users the convenience of a centralized exchange while also giving them the security and freedom of a decentralized exchange.
All in all, cryotp exchanges are not hard to understand but you should always consider the risks of each one before you try to choose which type you are going to use. Know your purpose first then research about crypto exchanges before deciding on what you will use.
