How do Cryptocurrency Exchanges work? Risk discussed
With the latest CEX (Centralized Exchange) having just recently failed, I have been asked multiple times to talk architecturally how Cryptocurrency Exchanges function and at least at a high level, how what is the custodial risk, not just from hackers, but from a range of other internal controls and business aspects that can create extreme risk for people buying/selling from the exchange. Let's get into this whiteboard session in a mostly engineering discussion tailored for anyone out there can understand.