Mastering Blockchain, 2nd Edition

Chapter 4. Centralized and Decentralized Exchanges

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For people who are entering into the onchain world, whether it’s using Bitcoin, Ethereum or something else, with a custodial or non-custodial wallet, they need to access some sort of crypto exchange to do so. These users want to buy or sell an asset, and they want to make sure their money is safe and trusted. To them, often the exchange doesn’t matter - but it is important it works, is secure with fair pricing, and it’s fast.

This chapter is an exploration of exchange in the crypto world. The two major different types: Centralized and Decentralized. And the important fundamentals of exchange as builders are thinking about onchain apps - how this process of buying, selling or swapping assets - can become a simple-to-use in-app process for anyone.

Most people don’t really understand how electricity works. There’s generation, transmission, voltage, circuits and other complicated processes involved. But everyone knows if someone hits a switch, a light will come ...