Centralized Market

A centralized market is a central exchange where you can buy and sell things in one place. It is very organized, managed by an impartial clearing house and with transparent prices, giving participants confidence and security. The New York Stock Exchange for example is a centralized market.

This is in stark contrast to a decentralized market, where there is no secure exchange or clearing house to manage the trades. Instead this “middle man” is removed and trading is accomplished by directly connecting buyers to sellers. Think: illegal black markets. Or the market for rare coins or stamps or baseball cards. A lot of private transactions online (or in deserted parking garages).