Hello awesome people, how is everyone doing today, we are in the fourth day of the week, so many great things happening around… the week is almost coming to an end and as always, we are looking forward to a great weekend. This week’s topic is about decentralized and centralized exchanges

What is Decentralized and Centralized Exchange?

Decentralized exchange

A decentralized exchange is basically an exchange that gives users full control of their funds and how users exchange tokens. This means that, it runs on the blockchain and there is no depositing and withdrawals like in the centralized exchanges, there is no order books, instead users connect their wallet on the decentralized exchange protocol and swap their tokens on a peer-to-peer basis, based on the provided liquidity and price. On a decentralized exchange, there is no central entity or authority that controls what happens on the exchange, instead, everything is done in a decentralized manner.

Over the past few months, we have seen the rise of DeFi and in the world of DeFi, decentralized exchanges are a huge aspect of DeFi. The past months have seen the massive increase in decentralized exchange usage such as uniswap and pancakeswap. Uniswap has enjoyed a large share when it comes to decentralized exchange usage and has gone on to become one of the most used decentralized exchanges. Also, with a lot of projects springing up on the binance smart chain recently, there is even more interest in the use of decentralized exchange like pancake swap.

Centralized exchange

A centralized exchange is the complete opposite of a decentralized exchange. A centralized exchange is basically the most popular type of crypto exchanges used by many… It is an exchange that is controlled by a central entity. In a centralized exchange, all user funds are in custody of the centralized exchange entity since users need to deposit their funds or assets into the exchange accounts before being able to trade.

A centralized exchange has an order book containing a list of buy or sell orders. Users place buy or sell orders and wait for it to get filled depending on the price of the asset on the order book and the volume. At the moment, there are a number of top centralized exchanges like Binance, Coinbase, kucoin, Huobi, OKEx, Hotbit, etc.

Difference Between Decentralization and Centralization Exchanges

Decentralized Exchange	Centralized Exchange
Users have full control of their assets in their wallets	Centralized exchanges have full control of user assets
Non-Custodial	Custodial
Runs on the blockchain	Runs on a server
No downtime	There are Downtimes
Relies liquidity providers	Relies on order books
Peer-to-peer transaction	Centralized exchanges serve as intermediaries between buyers and sellers
Cannot be hacked	Can be hacked
No account creation	Account creation required
No KYC required	Some centralized exchanges require KYC before performing deposits and withdrawals
Requires a bit of technical knowledge	No technical knowledge required

Write about any 2 best centralized exchanges of 2021

Binance Exchange

For me, when it comes to centralized exchanges, there is no single doubt that Binance is one of the best and one of the biggest, if not the biggest centralized exchange by volume. One of the main reasons why I like Binance is the user experience which for me is key when using any centralized exchange. The Binance exchange is part of the Binance ecosystem as the binance ecosystem comprises of various elements like binance DEX, trustwallet, coinmarketcap and a host of other services.

The main reason why I like Binance a lot is because of the volume. Since Binance is one of the biggest, if not the biggest crypto currency exchange, it attracts a lot of users. Also, I like the user experience on the Binance exchange... Binance has put in a lot of focus to ensure that the user experience on their website is good. Almost every thing is easy to find and access. The Binance savings is another great aspect of Binance, offering great APY and interest rates on both their flexible savings and fixed savings. Overall, Binance is at the top of my list when it comes to crypto exchange.

Probit Exchange

Probit is another exchange I like a lot, not because it is that of a big cypto exchange, but simply because of its simplicity and ease of use. I know Probit can't be compared to the likes of Binance, Coinbase, Kucoin, Huobi, and many more, however, when it comes to simplicity and ease of use, Probit Exchange tops the list for me. Probit is definitely a top 50 crypto exchange and one of the homes for altcoin GEMS.

Probit is na easy to use and secure exchange and one of the main reasons I like to use Probit Exchange aside from the simplicity and ease of use, is low barrier of entry, which means that it is very user friendly especially for anyone who is new in the crypto space. Secondly, there are a lot of coins that are on Probit Exchange that isn't yet listed on bigger exchanges like Binance or Coinbase, this is great because we all know the influence this big exchanges has on the prices of cryptocurrencies...

Simply put, because of the lower listing fees, it is easier for new projects to list on Probit as an entry level exchange before aiming for the big dogs like Binance. Anyone can capitalize on the opportunity to buy coins on smaller exchanges because when it hits the big exchanges, the price of the assets tends to pump hard. There are amazing features on the Probit Exchange that makes trading smooth.

How to Install Metamask

Installing Metamask is a simple and straight forward process, all that needs to be done is to follow the set up process to get started with Metamask. For this demonstration, I will be installing the Metamask extension which is an amazing gateway for accessing and interacting with the ethereum and similar blockchains. To install Metamask extension, first visit the official Metamask website https://metamask.io to download the Metamask extension.

• Click on download now

• Select your preferred device, for this demonstration, I will choose chrome and click on install Metamask for chrome

• Once installed, you will need to follow the installation process

• Click on get started

• Click on create a wallet

• Agree to the terms

• Input your password... Make sure you create a strong password

• Next is your secret backup phrase. You will be shown your seed phrase, click to reveal. This is the most important step, ensure that you keep your seed phrase very secure as that is what you will use to recover your wallet or activate it on another device.

• Next is to confirm your secret backup phrase. Confirm your secret backup phrase by selecting the phrases in their correct order. Remember, you have to backup your seed phrase in a secure place.

• Congrats, you have now successfully created your Metamask extension wallet.

How to make use of Uniswap

When it comes to Decentralized Exchanges, Uniswap is without doubt one of the best and most used Decentralized Exchanges. Uniswap operates on the ethereum blockchain, making it the go-to DEX for swapping ethereum-based tokens. Uniswap has made a name for itself as one of the best protocols in the DeFi world. The rise of DeFi over the past months has seen the increasing demand for Decentralized Exchanges (DEX) and Uniswap is one of the most used DEXs. Using Uniswap to swap tokens is an easy and straight forward process. All you need is a wallet to connect to the Uniswap protocol. To do this;

• Visit the Uniswap protocol https://app.uniswap.org/#/swap
• Click on connect wallet

• From the list of available connect wallet options, select WalletConnect

• We will be using a mobile wallet to connect to Uniswap, so click on connect to mobile wallet
• You will be prompted to choose from your installed wallet of your Choice to connect to Uniswap

• Once connected, you will see your wallet address on Uniswap

• select the token pair you want to swap,

• Input the amount you want to swap, click on swap

• Follow the process to complete the token swap

@yousafharoonkhan