This article goes over the differences between the pros and cons of using the exchange service in your FEX app vs. Centralized exchanges to buy and sell cryptocurrencies.
What is a Centralized exchange?
Centralized exchanges, also known as custodial or hosted exchanges, provide a platform to buy and sell cryptocurrencies. These exchanges are similar to brokerages in traditional markets.
To see a list of the most popular exchanges, please check out this article.
What are the Pros of Centralized exchanges?
Centralized exchanges do provide a world of benefits, here are just some of the Pros that Centralized exchanges can offer:
- Not having to manage private keys – the Centralized exchange looks after this on your behalf.
- Advanced buying and selling options – like buying or selling on credit as well as the ability to set limit and stop-loss orders
- Buy into crypto – some exchanges have the ability to buy cryptocurrencies with your local fiat currencies.
- Sell into fiat – some exchanges have the ability to sell cryptocurrencies and receive your local fiat currency.
- Lower trading fees.
What are the Cons of Centralized exchanges?
With their pros, Centralized exchanges also have their cons.
- You don’t control your private keys – without them, you don’t have full control over your money.
- Limiting – Centralized exchanges can set withdrawal limits and deposit limits as well as other rules without your permission.
- Exchange hacks – Centralized exchanges can be prime targets for hackers to steal your funds.
- No privacy – often you will be asked to fill out forms of your identity to be able to use these platforms.
- Difficult to use – Centralized exchanges can be geared towards users with lots of experience in trading and thus making the experience very difficult for the average user.
What is the exchange feature in the FEX app?
Now that we have understood the pros and cons of Centralized exchanges let’s look at the feature in the FEX app that allows you to exchange.
The feature built into the FEX app allows you to connect to our exchange API providers inside of your FEX wallet to exchange over 100 supported popular blockchain assets with ease. Think of this in-app feature that FEX offers more like a connection to a Decentralized exchange. You always control your crypto, and when you want to exchange you send out an amount to our exchange API provider and receive the exchange straight back from them to your wallet.
What are the Pros of the exchange feature in the FEX app?
The exchange feature built into your FEX wallet has its own benefits, here are some of the Pros that using the in-wallet exchange feature offers:
- You control your private keys – you always have total control over your funds.
- No limits – since you own your private keys, you set your own limits, or not set them, the choice is yours!
- Privacy – There are no forms to fill or agreements to sign, just click on the exchange tab and exchange away!
- Easily exchange over 100 assets – With an easy-to-use interface connecting you to our many exchange providers who offer over 100 assets to choose from, and all in one place, exchanging one crypto for another never was so easy.
What are the Cons of the FEX exchange?
Now let’s go over the Cons of the FEX exchange:
- You have to manage your own private keys – with great power comes great responsibility. You must keep safe and never lose your private keys and 12 word secret phrase yourself.
- No advanced buying or selling options – The in app FEX exchange feature only allows a simple swap between cryptos, no fancy trade options for the power user.
- Higher exchange fees – Sometimes the API provider in FEX will show a high exchange fee, the good news is before you make any exchange, you will see exactly what the exchange rate is so you can decide whether or not to go ahead.
Which should I choose?
The short answer is: It is up to you!
The great thing about crypto is you get to decide how you want to control your wealth. You can use a mixture of Centralised exchanges and the in app feature that FEX provides if you want to!
Rest assured when using FEX, we know that cryptocurrencies can have a steep learning curve. So we provide an extensive online help desk as well as 24/7 support to help users with any and all questions or problems they may have.
In summary, the exchange feature inside FEX and Centralized exchanges provide their own pros and cons.
Centralized exchanges provide benefits like support for fiat currencies (USD, EUR, etc.), margin trading, and more.
Though if you value things like controlling your private keys (and funds), privacy, ease of use, large asset selection, and 24/7 customer support, FEX gives you a beautifully designed and safe way to secure, manage, and exchange your blockchain assets with our API providers inside your wallet.
Questions? Need more assistance? Send us an email at support@FEX.com. We promise quick human help!