Hello Steemians,

This is my homework task for The Steemit Crypto Academy Season 2 Week 3 by professor @yousafharoonkhan

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Definition of Decentralized and Centralized Exchange

This week professor has nicely explained the decentralized and centralized exchanges and what are the differences between both of them. These days both types are exchanges are quite popular and depending upon the need we go with them for performing trading transactions however both have their pros and cons so we should know the requirement before using the platform. for example, if I talk about a centralized exchange then I'll take the name as Binance and when it comes to decentralized then Uniswap is a great option.

As we understand through the word of decentralized means something that has no controlled by any single authority and this control is by everyone whoever is the user and has access to the platform whereas with the centralized system the entire power remains with one authority and users are given controlled access to use the platform.

Binance is a centralized exchange where we can trade if our accounts are approved by the exchange and our digital assets are under their control. with Uniswap exchange there is no such thing and we hold the key of our wallet that gives us complete control of our digital holding.

Difference between decentralization and centralization exchanges

As we already talked about decentralized and centralized exchanges so here in this question let's talk about the differences that we get with both types of platforms. these differences are not just positive because some of the differences that we get with both or not good for us and that is why one over another.

Let's talk about Binance first which is a centralized exchange that offers use variety of coins along with bigger liquidity available in various pairs.

• We need KYC with a centralized exchange
• Exchange keep the private key of the wallet
• Support is provided the is there an issue with usage or transaction.
• Transaction can be done as per the defined rules by the exchange.
• Better Trading experience and easy to use UI (User Interface)
• Well versed with high-end technology
• Various other services along with trading like staking, margin trading, project launch, etc
• Binance charge fee of 0.1% and provide the option to reduce it further if its paid by BNB ( Binance native coin)

Now let's also talk about Decentralised exchange such as Uniswap

• NO KYC needed
• We hold the key so we get full control of our funds
• Limited support
• Moderate User Interface
• Decentralised wallet is needed for login
• Limited services available
• Higher fee as compared to centralized exchanges but this is used to reward liquidity providers. These days this is quite high because of the ETH gas fee.

My 2 best-centralized exchanges of 2021

I use various centralized exchanges depending upon my requirement because I believe that having only one account in a centralized exchange is not enough to add sometimes we go through challenges with liquidity and also platform servers are facing challenges. I hold accounts in many exchanges like Binance and Bittrex and also with some Indian exchanges including BitBNS. Now since I am supposed to talk about only two exchanges so I will proceed with Binance and bit BNS because I use both of them a lot for my various crypto transactions.

Binance :-

Binance is a leading centralized exchange that is available internationally and I can see that lots of users are using their platform not just for trading but also for many other things including is taking margin trading and also to hold the digital assets that reward them through defi.

I use Binance because it provides high liquidity and a very fast trading platform. it offers many other things including the options to buy crypto using peer-to-peer and wallet enabled for all these coins listed on the platform. I'm not a regular traitor but whenever I trade I prefer to do it on Binance because of the high volume and so far I never had to wait for the volume here because it has a huge userbase and because of that volume is never an issue for me. I'm anytime using their application to perform trade and it worked flawlessly so I never face any challenges while performing on their platform. they recently added the option for a credit card but I'm not sure when is it going to be available for Indian users.

I already mentioned that I do not trade every day but I'm sharing this snapshot of one of my trades which happened a couple of days back.

Bitbns:-

BitBNS leading crypto exchange in India and the reason why I use it because it provides various services and instant deposits and withdrawals for Fiat. With Binance I cannot get the withdrawal in INR currency so I must have an account with Indian exchange and this is the exchange I use for such transactions however some other services which are available here are not less than any international exchange. They have their own BNS token and using it I can get the fee reduced significantly with all my trades.

Here also I don't trade every day however I have set up SIP purchases for Bitcoin and Ethereum in a daily frequency.

Install Metamask

Meta mask is one of the most popular decentralized blockchain wallets which provides access to all are holding to us and we get the entire control of our digital money on this wallet. although there are many wallets I can see that the number of users with this wallet is quite high and in fact, this is the first decentralized wallet I started using.

Let's go through it step by step to install the meta mask in our browser

1- open https://metamask.io/ and choose the download option

After install its gets added to the browser extension option and now need to open it and set up a wallet-

In the next page, we get 2 options. One is to create a wallet and another is to important in case you already.

I have selected Create a wallet-

We need to agree to the terms before we proceed further-

Create a password in this window and check to mark the t&c mark.

This is the last step and the wallet is created. We need to save secret words because this is very important and please don't share the key with anyone.

How to use Uniswap exchange

My metamask wallet is already set up and we are all set to perform trade or swap but like others, we need to have some funds in the wallet first. Once you transfer the funds then you can see the balance like this-

There is the SWAP option after Buy and Send.

When we go with review swap then it searches within various exchanges and gives the best possible quotes and it gives some time to review and proceed with swap. If we don't proceed then it gets refreshed so review within the time and proceeds.

This is the option available on metamask wallet however we can do it https://app.uniswap.org/#/swap using the metamask portal.

This is how we can process the swap in the uniswap website and it shows the price impact and feed involved with it.

if you like the price and other charges then you can proceed and the transaction will be done in a few seconds.

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This was fantastic learning about decentralized and centralized exchanges along with the use of SWAP functions on platforms like uniswap. Metamask is undoubtedly the most popular wallet and I have been using it for a long time for various trades. if I need to take the name of one of the best-decentralized exchanges of 2021 then for sure it is the uniswap and when it comes to centralized then Binance will be the name in my opinion.

thank you so much professional @yousafharoonkhan for sharing this wonderful article with us and giving us the opportunity to learn more about crypto.

thank you so much