Today i am writing beginner's course task 5 set by @imagen which is about Dex, Cex, Popular Exchanges and Trading Cryptos. Although each of these topics have subtopics but for the beginer level course, we need to explain these briefly. Let's begin.

Soirce

---

Explain in your own words what an Exchange is. Differences between a Wallet and an Exchange.

---

An exchange is a cryptocurrency marketplace where traders carry out trade.Cryptocurrency trade is carried out in pairs . There are different trading pairs listed on different trading platforms that allow exchange to each other . For example , BTC/ ETH pair. It means that BTC can be exchanged for ethereum and Etherium can be exchange for BTC.

In addition most of the platforms allow trading with fiat currencies as well.

Difference between wallet and exchange.

Wallet is a software program which is used primarily to store cryptos. One important parameter to know about wallets is that of wallet keys. There are two important keys linked to each wallet and they are public key and private key. Public key refers to those which are used to deposit funds into the wallets where as private keys refer to the keys that are used to sign transaction or with the help of which funds can be transferred from one wallet to another.

Another important key of wallets is recovery phrase or seed phrase or mneumonic phrase. It is through this phrase that user can access all the keys of the wallet.

Exchange is primarily used for trading purpose however there is a wallet linked to every exchange but that is meant for temporary storage of funds during trading

---

Mention the advantages and disadvantages of DEX and CEX.

---

Advantages of DEX

• Here a trader has absolute control over his funds. Funds are not under the control of any third party.

• Traders can utilise their funds as per their convenience. Traders are not bound to follow any rules and regulations set by third party.

• DEX are more secure and transparent because of blockchain Technology.

• Users need not share the sensitive information with the exchange like banking details and personal information.

• Some well known decentralised exchange are WavesDex Uniswap , Airswqp etc.

Disadvantages of DEX

• There is no way to claim funds in case of any mishap like hacking or wrong transfers.

• Decentralised exchanges have low transaction volume and liquidity than centralized exchange and therefore transaction takes slightly more time than centralised exchange to get executed.

• Trading with only cryptocurrencies is possible mostly.

Advantages of CEX

• Exchange Niche is simple to set on centralised exchanges and learning curve is very shallow.

• Centralised exchange have higher trading volume and higher liquidity , therefore the transactions are rapidly executed on centralised Exchanges.

• Trading with Fiat as well as cryptos is possible and diverse payment options are available.

• Some popular centralised exchanges are Binance, Bittrex, Coinbase and Kraken.

Disadvantages of CEX

• Traders need to trust third party and funds are under the control of the authority that control the centralised exchange.

• Traders do not have access to the private keys and they execute trade through the passwords.

• CEX are subordinate in security to the decentralized exchange because later makes use of blockchain.

• Users or traders need to share some sensitive information like bank details, phone numbers, photo id etc to the companies that own the exchanges.

---

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

---

Yes i have accounts on few exchanges like Binance and Poloniex but i am mainly using Binance. As for my experiance is concerned, i am satisfied with Binance. Let me tell you why.

• Binance has very simple registration process and exchange niche is created within minutes.

• Binance is very simple to use. It has a very simple user interface, even a first time user does not face any difficulty in trading online on Binance.

• Binance has very good liquidity and trading volume on majority of the trading pairs, so transactions are executed within seconds.

• Transaction fee on binance is low.

• More than 550 cryptocurrency pairs are tradable.

• Binamce support diverse trading features like
  Limit order, market order, stop-limit order, trailing stop order, margin trading, one-cancels-the-other order, P2P trading etc.

• Advanced charting features with diverse indicators are available on Binamce which make it a dynamic and comprehensive platform.