Centralized cryptocurrency exchanges (e.g. Binance, Bittrex) are currently the most popular form which is run by a single entity. Users of centralized exchanges deposit funds directly with the exchange, and the exchange then handles the security of the fund, the execution of trades, etc. The big risk with centralized exchanges is their vulnerability to hacking or inappropriate action conducted by the administrator.
On the other hand, decentralized exchanges remove the risks of theft. Instead of depositing funds right into a wallet controlled by one entity, users rely on digital signatures (message format) to execute trade directly between two parties.
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