As of Feb 2018, the most common way to trade cryptocurrencies.
The exchanges commonly keep the keys to the wallets, but provide the end user with an interface allowing to buy and sell cryptocurrencies, using fiat funds (credit card or via bank account).
Centralized exchanges are attractive targets for hacking, which poses a serious security risk (singe point of failure).
The history of Kraken: http://unchainedpodcast.co/jesse-powell-ceo-of-kraken-on-drawing-a-line-with-regulators-ep61
In this post I’ll investigate the key drivers of the unrelenting cryptocurrency/cryptoasset markets, and explain why they aren’t likely to go away soon. In particular, I will focus on the incentives which cause rankings sites to uncritically include junk exchange volume in their data.