CRYPTO ACADEMY SEASON 3 BEGINNER'S COURSE- TASK 5: DEX, CEX, POPULAR EXCHANGES AND CRYPTO TRADING

Hello Prof, thank you for the great lecture.
Below is my task:

QST.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.

1. EXPLAIN IN YOUR OWN WORDS WHAT AN EXCHANGE IS.

An exchange can either be 'an act' or 'a place'. First, an EXCHANGE as a whole can be defined as an act of giving up something for another. But here, we are specifically talking about crypto exchange which is a place or site. Therefore, "an exchange" is an organized marketplace for trading different cryptocurrencies or tokens for fiat money or other cryptocurrencies.

Image source

The absence of crypto exchanges will surely pull out the interest of majority in crypto. They will see crypto mining and investing to be scam and waste of time and money. Therefore, the present of these crypto exchanges has made crypto trading fun, interesting and easy. An exchange is very important in the world of crypto because users being able to exchange their cryptocurrencies or trade them will help popularize it.

2. DIFFERENCES BETWEEN A WALLET AND AN EXCHANGE.

There is a very big difference between a wallet and an exchange. Let me talk about the major difference between them before going down to the minor ones.

• A WALLET: A wallet in crypto can be said to be a digital device or app where we can store our cryptocurrencies for security reasons. It is also a place where we store our private and public key or both for easy crypto transaction. A wallet can either be hot or cold. Here, the currencies are saved or stored and not exchanged for anything or any other crypto. But we can send cryptocurrencies from an exchange to the wallet using the wallet address. An example of a wallet are; Trust wallet, TronLink wallet, etc

Hot Wallet: This kind of wallet is one which is connected to the internet and it works online. Here, the platform stores and secures the public and private keys of users.

Cold Wallet: It is stored offline because it has no connection with the internet and also, users are in control of their crypto currencies.

• AN EXCHANGE: As said earlier, an exchange is a place where these cryptocurrencies are exchanged in return for fiat money or other cryptocurrencies. Examples of an exchange are; Poloniex, Olamax, Binance, etc.

Below are more differences between a wallet and an exchange.

A WALLET	AN EXCHANGE
1) Cryptocurrencies are stored.	Cryptocurrencies are exchanged for another.
2) User is in control of their assets.	The users asset is under the control of the exchange.
3) It is not prone to attack and hack.	It is prone to hack since some of these exchanges are centralized exchanges.
4) There is no limitation to the number of assets sent in a day.	There are limitations.
5) There are no charges.	There are charges when trading crypto.

3. MENTION THE ADVANTAGES AND DISADVANTAGES OF DEX AND CEX.
Advantages and Disadvantages of DECENTRALIZED EXCHANGE

ADVANTAGES OF DEX	DISADVANTAGES OF DEX
1) There are no third parties or intermediaries involved.	It is complex
2) It is more secured than a centralize exchange.	Users are required to learn and get used to the processes of the exchange platform.
3) It allows for peer to peer exchange of cryptocurrencies.	Here, fiat currencies cannot be traded for digital ones.
4) Customers are not required to fill any KYC(Know Your Customer) form.	It is difficult to find buyers and sellers when trading volume is low.
5) There are no charges for any transaction done.

Advantages and Disadvantages of CENTRALIZED EXCHANGE

ADVANTAGES OF CEX	DISADVANTAGES OF CEX
1) The processes involved in a centralize exchange is more convenient and user-friendly.	This particular exchange is always the target for theives and hackers because they hold large amount of money/crypto.
2) Security and reliability is guaranteed.	It doesn't offer a peer to peer transaction.
3) It is comfortable to use.	High transaction fees are usually charged for the services provided.

4. HAVE YOU USED AN EXCHANGE BEFORE? TELL US ABOUT IT.

Actually, I haven't used an exchange before. I only got to watch someone use one which is known as "Olamax.io". From what I saw, I know I can explain a little about it. It is a Centralized Exchange because it is owned and controlled by a central authority. As we all know that the sole aim of business is to make profit, Olamax Exchange is a one person business or maybe a business idea of a group of persons who sees the need of an exchange and the profit therein and decided to establish it so as to provide customers satisfaction in making use of cryptocurrencies and so on.

Before the site update, Olamax. io traded different cryptocurrencies like: "Bitcoin, Tron, Hive,etc." For now, it deals on only steemit and Hive cryptocurrencies; "steem, Steem back dollar(SBD), Hive and Hive back dollar(HBD)."
Below is the image of the exchange site.

There is an existence of peer-to-peer transaction because cryptocurrency can be transferred from one person to another. There are people who get some certain business done by accepting to be paid with a particular cryptocurrency.

CONCLUSION

An exchange and a wallet are the two important things in the world of crypto because without an exchange, people won't take interest in trading crypto rather investing in it. A wallet on the other hand helps to securely store our asset.
Having an opportunity to learn how a Decentralized/Centralized Exchanges and a Wallet works was enjoyable.
Thank you Prof @imagen