What are the differences between decentralized and centralized cryptocurrencies?
Blockchain App Factory is one of the early adopters of cryptocurrency and blockchain development services.
Centralized cryptocurrencies are controlled by third parties. Whereas, decentralized cryptocurrencies do not involve any central authority or third parties. Let’s see the major differences between the two below.
The key differences between centralized and decentralized exchanges:
- With centralized cryptocurrencies, you need not complete any matching transactions, you just have to place the order and an automatic algorithm will find matching orders. Whereas with decentralized cryptos, your order must be matched by selling orders to initiate transactions.
- Centralized exchanges are not recorded on the blockchain, because the cryptos are directly tied to the exchange addresses. But in case of decentralized exchanges, every transaction is recorded on the blockchain secured with cryptography.
- Centralized exchanges enable faster transactions when compared to decentralized exchanges
- Decentralized exchanges come with higher volume of liquidity when compared to centralized exchanges.
- Centralized exchanges are more prone to hacks and risk factors more than decentralized exchanges.
- Centralized exchanges charge more fees compared to decentralized exchanges because they involve third parties or central authorities who manage the transactions, expenses and protect from risks.
Both centralized and decentralized exchanges come with their own pros and cons. And both are in high demand among potential investors. There are many existing successful cryptocurrency development companies, who will offer reliable solutions for both types. So, choose your cryptocurrency exchange development service, develop your choice of exchange and spin millions in the market.