Crypto Academy Week 11 - Homework Post for @yousafharoonkhan

danielo109 (66)Beginner[1,2,3,4,10]in SteemitCryptoAcademy • 3 years ago

Hello Professtor, @yousafharoonkhan, Thank you for another great lecture once again. I partook in your class on decentralized and centralized system. I really learnt a lot. I'm grateful I have the chance to partake in this one also.

Centralized and Decentralized Exchanges

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Centralized Exchange

Centralized exchange is a type of exchange that involves a mediator and has rules for trader exchange. From our previous class we learnt that mediators are involved in centralized exchange. Let's say I want to buy in a centralized exchange, I do not get direct contact with the seller. The mediator finds me a seller and does my transactions for me and in turn I pay him for finding a seller and making my purchase for me. There are also rules and regulations that have to be followed in a centralized exchange. These rules are set by the mediator and both sellers and buyers have to conform to them.

Decentralized Exchange

Decentralized exchange on the other hand does not involve any middle man or mediator. If you want to make an exchange or let's say you want to buy or sell, you find the seller or buyer yourself and then you make the deal and do your transactions with the buyer or seller directly. In this case you don't pay any middle man for making an exchange for you, and then you get to make the deal on your own. And since there is no middle man involved you have the freedom to do as pleases you with your funds because there are no rules and regulations set by a mediator to follow.

Differences between Centralized and Decentralized Exchanges

There are stand out differences between Centralized and Decentralized exchanges.

Centralized Exchanges

Decentralized Exchanges

1. Involves Intermediaries who are mostly companies. They act as middle man to make the transactions and contacts to other traders on your behalf, and charge both you and the other trader fees for trading.

1. Doesn't involve intermediaries. You make the contact, make the deal and do your transactions on your own without any intermediaries. In this case you don't have to pay any fees to a middle man for trading.

2. Centralized exchanges are less secure. This because all the users funds are kept by the company on one server. There have been cases where Centralized systems were hacked and some funds were stolen.

2. They are secure and difficult to hack. Only the user has access and management to his funds. Also Decentralized exchanges do not rely on only one server, they function on many servers.

3. It's very easy to use. It provides features for easy usage. Also, most of trading work including finding the contacts, making deals and transactions are done for you. This makes it easy for newcomers who are interested in trading.

3. It's very difficult to use especially when you're a newcomer. Doesn't have features for easy usage like stop losses and margin trading which prevent you from making huge losses. Use decentralized exchanges only when you understand and know what you're doing.

4. Has higher volume and liquidity. This is because centralized exchanges have many traders on their platform. This makes it easy to make a purchase or sell within a short period of time. Liquidity is affected by volume. Having high volume increases liquidity.

4. Has lower volume and liquidity. This is because many people do not know how to utilize it well. It also doesn't have enough traders on the exchange platform and as such it can be difficult finding a trader to exchange with.

5. Verification process is difficult and takes time. You can't make trades without completing your verification also.

5. Does not require any personal verification. Also, trading is possible without document verification.

6. Server maintenance and having just one server disrupts/makes trading impossible for a period of time

6. No disruptions and so trading is possible anytime any day.

Two Best Centralized Exchanges in 2021

I got really interested in Crypto not long ago. It's actually been less than a month. I heard how profitable it could be and so I decided to take the opportunity. The #cryptoacadamy classes have been helpful and I've learnt a lot within this short period. I'm going to talk about 2 best centralized exchanges based on my research.

Binance

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Binance is rated the best exchange by almost every one. Everyone I know who is into trading has a Binance account. It is the biggest exchange in the world. Binance has most of the coins demanded by traders available for exchange including all the top coins. I personally joined binance because it had Steem available for exchange and I liked the Interface also. What I didn't like was the difficulties I faced when I was doing my verification.

My Binance account is below. Just joined and haven't made any trades yet. I'm hoping in some few weeks to come I would have started trading and also learnt more about how to utilize the features available.

Coinbase

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Coinbase is also the number one exchange according to some people. I've noticed almost everyone on Binance is on Coinbase also. I recall years ago when I was introduced to crypto I was told to download the Coinbase mobile app and then create an account. At that time I wasn't given enough information and so I lost interest.

What I know about Coinbase is that their fees are expensive and so most people prefer trading elsewhere. Coinbase increases the value of coins listed on their platform. If a coin is listed it becomes very popular and so people tend to invest thereby increasing the value of the coin in the market. It also has a very nice interface.

Below is my Coinbase account.

Wasn't able to use it since that time, but now I have enough information to start putting it to use.

MetaMask

MetaMask is a wallet that allows you to manage your digital assets. It allows you to make transactions on decentralized exchange platforms.

Steps involved in installing MetaMask:

Open the Metamask website on your browser/ search on google so you find the website.

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click download now

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Select install MetaMask for Chrome.

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Click Add extension.

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Pin MetaMask so it that the icon appears at the top so you can access it easily.
If you do not have a wallet, to set up your wallet, click on get started.

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Select create a wallet.

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Click I agree to proceed.

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Enter and confirm your newly created password, agree to the terms and conditions by clicking the check-box. Click create.

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Click to reveal the secrete phrase.Copy and save it somewhere safe. It can be used for your account recovery. And then click next.
Select the phrases in order and click confirm.

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Congratulations you're done creating your Wallet.

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Here's your account menu.

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How to use Uniswap Exchange

Uniswap is a decentralized exchange platform. I allows traders to swap tokens.
To use Uniswap you need a wallet. If you don't have one, follow the steps to create a MetaMask wallet.

Steps involved in exchanging on Uniswap: