REPOST || Crypto Academy Season 5 Beginners' course - Task 7: Dex, Cex, popular exchanges and crypto trading
INTRODUCTION
QUESTIONS
《N÷1》Describe in your own words what an Exchange is.
《N÷2》Differences between a Wallet and an Exchange.
《N÷3》Mention the advantages and disadvantages of DEX and CEX.
《N÷4》Have you used an Exchange before? tell us about your experience.
《N÷1》describe in your own words what an Exchange is.
An exchange in my understanding, is a market or a place in which each customers and dealers comes together to trade. actually the name《exchange》actually means to bring something or goods to a person inorder to receive what he/she has or possess. with all that said, in line of crypto assets, once in a while we may also need to trade our steem inorder to receive different coins like USDT, Bitcoin 》etc. and all that is actually possible with help of an exchange. additionally, once in a while we may need fiat, {local curency) rather than a crypto, that is also possible withinside the exchange, due to the that fact we've got people who pocess the local currency {fait} and they are prepared to buy crypto assets with it. generally, an exchange can be seen as a place in which each buyers and sellers comes together to trade or exchange their cryptocurrency.
Just like i stated above, in order to trade or exchange our coins we need the help of an exchange to execute the process.that actually means that crypto currency can not be complete in the absence of an exchange platform. however exchanges are very important for each crypto trader out there. If we determine to eliminate exchange withinside the crypto world, then all our assets may also grow to be useless due to the fact that there will be no buyer to buy our cryptos when we're in need if money.
just like our local commercial banks, this exchange platform is likewise constructed willfully to gain profit. as the exchange serves a central authority between the present buyers and seller, there is a given percentage of which the exchange collect as their a transaction fees, which is profit the exchange may receive after the transaction. The exchange additionally provides few different services or offers to customers in order to help them handle their asset, which after gain them profit at the end. its just gonna be like the game of win win situation,
let's use staking for instance , the word staking actually means is the procedure by which a User lock his/her cryptos/assets inside an exchange for a long term, and this exchange will make profit through the user's staked crypto/assets,then this exchange will now return some percentage to the user who staked the token.
《N÷2》Differences between a Wallet and an Exchange
A lots of differences are discovered among exchange and wallets. the big query here have to be what's a wallet? actually this question got here due to the fact that we want it to have a clean information of what me and you are actually looking at. with little understanding of mine, i can say that wallet is a shop in which crypto owners keep their cryptocurrency and still possess full control over their crypto currencies. not like the exchange in which the platform assist users to perform few things, in the wallet has full control over their crypto asset.
to explain more on that , the table below explains on their differences
| WALLET | EXCHANGE |
|---|---|
| Wallets are highly difficult to be attacked by hackers | Hackers can hack into an exchanges easily and get rid of our asset/cryptos |
| Wallets is characterised through it's decentralized interface | We have《Dex》 and 《Dex》which is centralized and dentralized exchange. |
| We no longer trade in wallet due to the fact that the market is not available | some characteristic of the exchange is that it permits it users to execute trading, |
| in wallet there's no restriction to transactions. | in an exchange there's limits/restriction to transactions, |
| Wallet do operates with private keys | Exchange do operates with passwords |
《N÷3》Mention the advantages and disadvantages of DEX and CEX
Actually we have two main kinds of exchange , which is the 《DEX》Which I known as decentralized exchange, and we also have 《CEX》which is known as centralized exchange , before going to its Advantages and disadvantages, let's understand what they are, by finding their definition.
《DEX》which know as decentralized exchange is a kind of exchange which it's users involves has full authority/ control over their crypto/asset. meaning that their crypto/asset is absolutely under their care. however on this kind of exchange, the users private keys is formed during the exchange acount creating period, which the user will usill inorder to protect his/her assets.
The opposite which is 《CEX》in terms of a centralized exchange. however the CEX system dont offer it users the totally control over their crypto/asset, Honestly remake it clear, user do face a lot of restrictions in the centralized exchange, unlike the dex decentralised platform, the centralized platform makes use of password, with this its systems can be easily in term of hacking, because of that, I can say that our cryptos/assets are not fully secure/protected in this king of exchange. additionally, a user always follow any kind of law made by big investors 《whales》due to the Cex interface.
《3a》Advantages and Disadvantages of DEX
The table below shows some advantages and disadvantages of a 《DEX》decentralized exchange,
| ADVANTAGES | DISADVANTAGES |
|---|---|
| It's system is well protected, when it comes to security | when a user lost his/her private keys, their crypto asset also disappeare with it, due to the fact that this keys can't be recovered or retrievied |
| A User have full control over his/her assets | some factors are been limited |
| It doesn't call for deep verification process like KYC | it's Trading volume is somehow lower . |
《3b》ADVANTAGES AND DISADVANTAGES OF 《CEX》
The table below shows the advantages and disadvantages of a centralized exchange 👇
| ADVANTAGES | DISADVANTAGES |
|---|---|
| When a user lost his/her password it can be retrieve | this form of exchange can easily be hacked the hackers, |
| It's Trading volume is some how higher than the opposite | Cex really calls for deep verification process like KYC |
| Cex do possess to many factors | the exchange owns an upper hand in manipulating the user's cryptos assets. |
《N÷4》Have you used an Exchange before? tell us about your experience.
It is nearly not possible for each person to trade the cryptocurrency, with the absence of an exchange like i said in the beginning, anybody into crypto desires an exchange so as to finalise his or her trades withinside the crypto world. well my own case is not different because I have make use of 《Binance》 exchange right from the day one which I started trading the
cryptocurrency. currently my little experience on this platform is definitely amazing.
throughout my trading with this exchange 《Binance》, I gained the knowledge on how to make use of the binance peer_to_peer 《P2P》system to execut trade. This factor is the procedure by which i transfer my crypto/asset right from my [spot] to my peer_to_peer 《P2P》 wallet, after that, I now vist the market place where there is buyers and sellers 《traders》and their techniques of which they receive or make payment to. then I will now examine the type of coins every trade is prepared to buy and then I will choose my pair. what normally do is to choose someone with a much higher reputation or a verified trader, whenever I which to buy or purchase a coin. Any trader under the tag reputation of 👉 90% I won't consider buying/selling to the trader and additionally I do consider the time of which the buyer has provided to answer the order.
Well as for me, i usually trade with the traders who has the 15minutes time schedule, my reasons, so that I can find another buyer immediately if the trader didn't reply within 15 minutes.
One specific factor about this exchange platform, is that when a difficulty comes among a buyer and a seller, the platform will steps in without delay, and they will try their best to resolve problems among both parties, Apart trading , this exchange platform platform also provides different service and i also participate on their staking service,
CONCLUSION :
Honestly, I do respect/appreciate professor
@imagen for preparing such educative lecture, from this task i was able to analyze the DEX ANS CEX, additionally, I also understood the clear difference among an Exchange and a wallet,
Special thanks to my proff, @imagen,
Cc: @dilchamo