[DEX,CEX, POPULAR EXCHANGE, TRADING CRYPTOs] - Steemit Crypto Academy Season 4 - Homework Post for Task 7

INTRODUCTION
Hello everyone 🤗
I hope we are all doing well.
I am Emmanuel and I go by the steemit username @dibie.
I have gone through the lesson by professor @imagen on Task7 of the Beginner's course and I must say it was really educating and eye opening.
So,today I will be working on the assignment and I implore you all to sit back and enjoy this adventurous rides towards exploring key points in the lesson.
Hopefully we learn something from this write-up 🤗

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HOMEWORK
3-) Explain in your own words what an Exchange is. Differences between a Wallet and an Exchange. Mention the advantages and disadvantages of DEX and CEX. Have you used an Exchange before? tell us about your experience.

Explain in your own words what an Exchange is

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A cryptocurrency exchange is simply a platform or digital market place where cryptocurrency transaction are being made.
It is a platform which allows cryptocurrency holders to exchange/convert their digital asset into other cryptocurrency or fiat currency.

It connects both the buyers and sellers of digital asset, enabling them to interact directly or indirectly in some cases.

Different activities can be carried out on an exchange, some of which are buying of cryptocurrency,selling,trading, investing and even converting of digital asset into other digital asset.

An exchange also serve as an avenue where market price and value as well as demand and supply of cryptocurrency can be seen and determined.

Explaining an exchange in my own words without including it types is incomplete.
An exchange is basically in 2 forms
•CENTRALIZED exchange
•DECENTRALIZED exchange.
We will get to understand more on these two type of exchange as we proceed on this journey of enlightenment.

Majorly an exchange works by either "buy"
or "sell" order.A user can choose to buy an asset by placing a buy order or choose to sell asset by placing a sell order.

Differences between a Wallet and an Exchange.


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Wallet and exchange are both considered a necessity when trading and dealing with cryptocurrency.
However,before I state the difference between these two aforementioned thing,permit me to explain what a wallet is.
"A wallet is an app used by cryptocurrency holders to receive and store up cryptocurrency."

Having said that,let me quickly re-accentuate what an exchange is again to strike balance and then state the difference between the both of them.

"An exchange is a platform where coin holders can convert or exchange their cryptocurrency or fiat currency into other cryptocurrency or buyer and sell digital asset."

Differences

Exchange	wallet
•it is a platform where coin holders can trade and convert their crypto asset into other digital asset	•it is an app use in receiving and storing up cryptocurrency.
•Coin holders can determine market price, liquidity and even demand and supply of cryptocurrency in an exchange	•This is not possible on a wallet,a user cannot determine these things on a wallet.
•Some exchange offers the wallet service which is storing up cryptocurrency and can be use as a substitute for wallet	•A wallet cannot be use as substitute for an exchange.
•in a centralized wallet a user is not in possession of their private key which serves as proof of ownership	•A user in in possession of their private key which serves as proof of ownership and for decryption of crypto asset.
•some exchange doesn't give total control to a coin holder over their asset	•it is completely autonomous when using wallet, giving each user total control.

Mention the advantages and disadvantages of DEX and CEX

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In this part of the question,we will be discussing the advantages and disadvantages of DEX and CEX,so let us proceed by doing justice to DEX first.

DEX are decentralized exchange platforms which allow a user to be in total control of their assets in the exchange and interact freely with buyers and sellers without the interference of a central authority or middle men.

Advantage

•A coin holder is in possession of the private key for decryption of crypto assets.
•A coin holder has full control and autonomy over asset in the exchange.
•Elimination of 3rd party and central authority.
•low transaction cost.
•It supports anonymity.
•low risk and does not require an invitation or referral to join.
•It is almost impossible to be hacked

Disadvantage

•A user must ensure to keep the exchange password save and secure, because a loss or forgotten password means a loss fund.

•It doesn't support trading of fiat currency for cryptocurrency whereby causing inconveniences and restricting users flexibility.

•It is kind of complex to use by beginners who are just getting to know about cryptocurrency trading using exchange.

•since it is decentralized with everyone in total control,it is relatively difficult to fix issues regarding transaction on the exchange and some mistakes and errors cannot be rectify.
Also,once a user forgets or misplaces the password or keys,that is the end,no means of getting or retrieving it back unlike a Centralized system where their server contain a user's information.

while

CEX are Centralized exchange platform where user do not have full control over their crypto assets and are also not in possession of their private keys for validation of transactions.
The 3rd party or central authority is required as far as business transaction is concerned on this exchange.

Advantage

•it is user friendly and easy to use by amateur who are getting to know about cryptocurrency exchange because of it simple and exhaustive exchange interface.

•Passwods and keys can be retrieved if lost or misplace, because it is centralize and there is a backup file at the center server that holds this information.

•A user can trade both fist currencies and digital currency in this kind of exchange whereby boosting flexibility.

•Errors and issues can be easily rectify on this kind of exchange because controlling power lies at a point and not in a diverged state like the decentralized exchange,making it easy to rectify error quickly and efficiently.

Disadvantage

•involvement of central authority and intermidiary in transactions activities.

•It can be easily hacked because controlling power is centered at a point unlike a decentralized exchange where controlling power is in a diverged state.

•user do not have full control over their assets.

•Users are not in possession of their private keys.

•High cost of transaction fee.

•Verification on the exchange is somehow tasking as it requires lot of valid information and physical scrutiny to finally verify a user.

Have you used an Exchange before? tell us about your experience.

Of course,yes!
I have used and I am still using an exchange up till now.
I got to know about binance through crypto academy and it has really been helpful and great to use.
At first my experience wasn't really rosy, because I had to go through the verification phase/process and I must confess it wasn't a walk in the park to get verified on the binance exchange...
At some point, I gave up on the exchange because without the verification of my account,I won't be able to make any transaction on the exchange,so I was feedup...
Thankfully at the long run my account got verified🤗 and I can now perform transaction anytime and anywhere.
here is proof of my recent transaction on binance which I made for the sake of a crypto academy homework.

Conclusion

Exchange and wallet are necessary components in the cryptocurrency world and a coin holder needs to understand and distinguish their difference and usefulness when dealing with them. The decentralized wallet and centralized exchange are both unique in their own depending on the preference of a coin holder. They both have lot of advantages as well as disadvantages.
I wouldn't fail to appreciate the effort of professor @imagen on the compilation of this amazing and insightful lesson.

Thanks for reading through 🤗.

All unsourced image and screenshots are properties of author

_{special thanks: professor @imagen and @dilchamo
regards:@dibie}