What Is a Cryptocurrency Exchange and Why Do You Need One
After this module
You'll buy your first cryptocurrency yourself, move it to your own wallet, and check every step without anyone's help. This is the foundation you'll build everything else on.
Affiliate link
This is an affiliate link. It costs you nothing extra, but the platform pays a commission. That helps keep the school free.
CEX vs DEX — what's the difference?
There are two ways to buy and sell cryptocurrencies. Think of it like this:
CEX (centralized exchange) — this is like a bank for cryptocurrencies. You create an account, verify who you are (like showing your passport at a bank), and can buy crypto with euros. The exchange holds your money, the way a bank holds your savings.
Examples: NexoNexoA centralized exchange (CEX) for buying crypto with euros. Custodial — the exchange holds the keys.Read the lesson →, Binance, Kraken, Coinbase.
DEX (decentralized exchange) — this is like a marketplace where people trade directly with each other. There's no middleman. You connect your own wallet and swap currencies yourself.
Examples: Jupiter (SolanaSolanaA fast blockchain (under 1s, gas under $0.01). Home to the Kamino, Orca and Meteora ecosystem.Read the lesson →), UniswapUniswapAn Ethereum concentrated-liquidity protocol (V3/V4). Its Solana counterpart is Orca.Read the lesson → (EthereumEthereumA blockchain with smart contracts. We use Aave (lending) and Uniswap (LP) on it.Read the lesson →), OrcaOrcaA Solana DEX with concentrated liquidity (Whirlpool). The basis of our LP strategy on the Solana network.Read the lesson → (SolanaSolanaA fast blockchain (under 1s, gas under $0.01). Home to the Kamino, Orca and Meteora ecosystem.Read the lesson →).
A simple analogy
CEXCEXCentralized Exchange — a centralized exchange (e.g. Nexo, Kraken, Binance). Requires KYC.Read the lesson → = a bank. Someone else holds your money. DEXDEXDecentralized Exchange — a decentralized exchange (e.g. Jupiter, Orca, Uniswap). No KYC required.Read the lesson → = a marketplace. You control your own money and trade directly.
| CEX | DEX | |
|---|---|---|
| Sign-up | Required (show ID) | Not required |
| Accepts euros | Yes | No |
| Who controls the money | The exchange | You |
| Speed | Fast | Very fast (SolanaSolanaA fast blockchain (under 1s, gas under $0.01). Home to the Kamino, Orca and Meteora ecosystem.Read the lesson →) |
| Fees | 0.1–3% | 0.05–0.3% |
Why do we start with CEX?
The answer is simple — CEXCEXCentralized Exchange — a centralized exchange (e.g. Nexo, Kraken, Binance). Requires KYC.Read the lesson → accepts euros. You can't buy cryptocurrencies on a DEXDEXDecentralized Exchange — a decentralized exchange (e.g. Jupiter, Orca, Uniswap). No KYC required.Read the lesson → if you don't already have some cryptocurrency. You need to start with a CEXCEXCentralized Exchange — a centralized exchange (e.g. Nexo, Kraken, Binance). Requires KYC.Read the lesson →.
Think of it this way
It's like a currency exchange counter at the airport. First you go to the counter and exchange your euros. Only then can you buy things abroad. A CEXCEXCentralized Exchange — a centralized exchange (e.g. Nexo, Kraken, Binance). Requires KYC.Read the lesson → exchange is that first "exchange counter."
Our path:
- Euros in the bank → CEXCEXCentralized Exchange — a centralized exchange (e.g. Nexo, Kraken, Binance). Requires KYC.Read the lesson → exchange (Nexo or Kraken) → SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson → or ETH
- SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson →/ETH → WalletWalletA crypto wallet. Phantom (Solana), MetaMask (Ethereum). Holds your keys. (Jupiter Wallet or MetaMask)
- WalletWalletA crypto wallet. Phantom (Solana), MetaMask (Ethereum). Holds your keys. → DeFiDeFiDecentralized Finance — financial services without intermediaries, operating through smart contracts.Read the lesson → protocols (Kamino, Orca, Aave, Uniswap)
KYC — why the exchange asks you to verify your identity
KYC (Know Your Customer) — this is just like at a bank, where you have to show your passport before opening an account. The exchange is required to know who you are. It's there for security and to comply with the law — and at the same time it's a signal that you're choosing a regulated platform, not some anonymous corner of the internet.
What you'll need to provide:
- A passport or ID card
- A photo of yourself (selfie) with the document
- Sometimes — proof of address (e.g., a utility bill)
How long it takes: anywhere from 10 minutes to 24 hours.
How do euros turn into cryptocurrency?
Fiat (traditional currency, e.g. euros or dollars) — this just means the ordinary currencies we use every day. On the exchange, you convert euros into cryptocurrency:
- SEPA transfer — a bank transfer, free, but you need to wait 1–2 business days
- Card — fast (within a few minutes), but with a ~1.5% fee
- Revolut/bank transfer — depends on the exchange
What is SEPA?
SEPASEPAA European banking system for cheap or free euro transfers between EU banks.Read the lesson → is the European bank payment system that lets you send euros between banks cheaply or for free. It's like a regular bank transfer, just covering the whole SEPASEPAA European banking system for cheap or free euro transfers between EU banks.Read the lesson → area (the EU and a few neighboring countries).
Next step: Now you understand what exchanges are. In the next lesson we'll show you exactly how to buy SOLSOLSolana's native token. Used to pay gas and as collateral.Read the lesson → or ETH through Nexo — step by step.
The best way to understand exchanges is to see them for yourself. This exploration task takes about 10 minutes and needs no money or sign-up.
Always type an exchange's address in by hand, never click through a search ad — fake exchange copies are one of the most common scams. Nothing needs to be bought in this task.
This is learning, not investing — use only small amounts you treat as tuition.
You just compared two exchanges by KYC, fees, and SEPA — and picked the one that suits you. Most people never do this and just go with the first one they find.