Greetings friends, this publication will not be long because I am only interested in making clear the difference between a Broker and an Exchange. However, since a few years ago, trading and investing in the cryptocurrency market has become more and more common. So a correct understanding of the terms is necessary.
A broker is a financial entity or company that functions as an intermediary between a trader and the market. The broker executes buy and sell orders, and charges commissions for that. It also has a license to buy and sell stocks in the stock market.
It is a digital entity or platform (can be centralized or decentralized) where you can exchange, buy and sell cryptocurrencies and limited edition tokens with fiat money or other cryptocurrencies such as BTC. One of the particularities that exchanges are very popular is the P2P (peer to peer) market where you can exchange with very low commissions.
They are highly regulated exchange platforms where you usually have to give your personal KYC (Know your customer) data to trade and trade your cryptocurrencies. Examples:
BINANCE
COINBASE
DEX or decentralized Exchanges serve the same purpose as traditional exchanges, with the major exception that they offer privacy and anonymity to the user. Thanks to the emergence of DAPPS, DEXs can interact with other applications and other interesting possibilities open up, such as participating in DEFI protocols. Unlike CEX (Centralized Exchanges) no intermediaries are needed because the platform works with automatic programming. Some examples:
Pancakeswap
Uniswap
Benswap
The answer will depend on the type of trader. If your specialty is stocks and stock indexes, you may prefer a well-regulated broker. But if you are a cryptocurrency trader you will probably be better off using an exchange that you feel more comfortable with.
You have to understand something. When you place a buy/sell order with a broker you are never buying a "real asset" you are buying the right to speculate on that asset which is not yours. Quite different when you even speculate on a cryptocurrency because if you buy for example #BCH you are buying a cryptocurrency with a limited supply. You can transfer them to your relatives or to your personal wallet. If you manage your private keys it is your money, so when you buy in an exchange a cryptocurrency like BCH you are buying a real asset and not just the right to speculate.
