Steemit Crypto Academy Season 4 Beginners Course - Homework Post For Task 7 : DEX, CEX, POPULAR EXCHANGES AND TRADING CRYPTOS

in SteemitCryptoAcademy3 months ago

Good day everyone,

I am very delighted to be part of this wonderful lecture and on the topic on dex, cex, popular exchanges and trading cryptos. I will like to thank our noble professor @imagen for that wonderful lecture. I really enjoyed and learnt a lot so am kindly here to present to you my work.

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Below is my submission for the homework task.

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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.

EXCHANGE

Exchange in crypto simply means the buying and selling of crypto assets in a particular platform.As in acts like means where you can buy or sell local currencies or crypto coins. So an exchange is what makes it possible to trade in a particular token for another.

Sometimes this exchange platform comes in different forms that is it’s been face to face or online. Am saying this because there re certain trades that you don’t to go online online. When you need something to sell or buy from the owner, it’s just a matter of meeting the person physically and your deal will be done. But there are certain trades to it’s always done online. Whatever you need or wants to sell you simply go to the owners platform, contact him and all transactions will be done online.

We also have two forms of exchange platform which I will like to put more light on and they are: Centralized Exchange(CEX) and Decentralized Exchange(DEX). I will like to start with the centralized exchange

CENTRALIZED EXCHANGE

Centralized exchange is one of the types of platforms that deals with the involvement of a middleman before a transaction that can done successful. This is simply telling you that, before you can buy air sell something on this platform you need to meet someone before the trade can be done for you. So this makes it difficult for its users to express themselves since there rules and regulations governing it by the managers or those in charge. Also managers or authority observe all transactions dice the history are known to them and with this it makes stealing of individual assets very simple. Some examples of this centralized exchange platforms are: Kraken, Binance and Coinbase etc.

DECENTRALIZED EXCHANGE

Talking of decentralized exchange, it is also a form of exchange which that’s not deal with any middleman before transaction goes through successful. So in this exchange trade only takes place between the owner of the asset and the one selling or buying no need for another person. As far here everyone has been given the right to do anything of his or her choice as to when to buy or sell an asset or the time to trade in a particular asset. With that it makes security very tight since no one know the asset in your account and you are the. Wey person in charge of it. Some examples of exchange platforms are: Tokenlon, Uniswap and Buyerswap etc.

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DIFFERENCE BETWEEN WALLET AND EXCHANGE

Since we spoke about exchange I will like to talk about wallet a bit. When we talk about wallet is simply the normal wallet that we know where we save our money but in cryptocurrency we will say it is a place where an asset can be kept or stored safely. Every asset you buy on your account will automatically be saved in your wallet.

Let’s now get to the differences between them. I will like to start with exchange.

EXCHANGE

  • Low level of security

  • A middleman should be made available between the buyer and the seller.

  • Buying and selling of assets can be done here.

  • Incase you forget your password, your account can be gained.

  • Since it is exchange, the platform can either be centralized or decentralized.

WALLET

  • High level of security.

  • No need of any middleman in a wallet.

  • Assets are only saved and stored here.

  • You cannot recover your account anymore immediately you forget your password.

  • Since it is wallet. It’s only centralized.

ADVANTAGES AND DISADVANTAGES OF DEX AND CEX

We are talking about two things here, that’s the decentralized and centralized exchange. But I will like to pick them one after the other and talk about the advantages and disadvantages.

Let’s start with the advantages and disadvantages of decentralized exchange(dex).

ADVANTAGES

  • High level of security

  • Users are those in charge of their accounts holdings as in their assets.

  • We have what we call peer to peer when trading here.

  • Low charges taken when making transactions.

  • No middleman needed for any exchange

DISADVANTAGES

  • Liquidity rate is very low

  • Because users are those in charge of their accounts, there is a high possibility of them loosing an asset when especially transaction goes wrong.

  • You may need money urgently and there will be no buyer for that particular asset.

  • Features in here are complicated and very difficult to use.

  • There there is no fiat currency, trades can’t be made here.

Now let’s take a good look at the advantages and disadvantages of Centralized Exchanges(Cex)

ADVANTAGES

  • High level of liquidity rebate especially when trading in tokens.

  • Rules and regulations are given by managers here.

  • Selling and buying of tokens for other crypto assets can be done in this exchange.

  • After creation of an account on this exchange, steps are needed to follow before you can get your accounts verified and start to trade.

  • This exchange type is very easy to use since it’s features are already known by people.

DISADVANTAGES

  • It is compulsory and necessary for assets to be known by mangers.

  • Users do t have full control over their assets.

  • Since there is a need for a middleman in this exchange, it mostly makes transactions slow.

  • Fees been paid before a transaction will be done is very high.

  • There is a low level of security since this exchange is very simple to use.

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THE EXCHANGE I HAVE USED BEFORE

As we all know in the crypto system that there are a lot of exchange platforms here in there and how they are used. But as for me, the exchange platform I have used before and am still using is Binance. Frankly speaking, what made me to get knowledge about Binance is Steemit Crypto Academy. This was the reason why a downloaded and had my account and today as we speak now I can say am also a master in it because that’s where I trade in all my assets. Binance is a platform I can say it has very tight security because since I stared using it, I have never experienced something like a loss in any of my asset and also I can say there is no coin in the crypto market you will mention and it won’t be on binance never all the crypto coins are available and you can trade in them at any point in time.We also have what we call p2p, with this p2p that’s where you can mainly sell or buy top crypto coins for your local currency. No one steals on the platform since the security level is high. There is another one thing which is the order book where you can set a price limit for yourself then that particular crypto coin gets to that price the platform will notify you then you trade in it. Below is a clear screenshot of my verified Binance account.

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CONCLUSION

In brief I will say decentralized and centralized exchange comes with their positive and negative sides which an individual who deals in cryptocurrency must know.Thanks to Steemit Crypto Academy for making know what Binance and I will like to encourage anyone who wants to start crypto currency business to get his or her verified binance account because using it is very fast and secured.

Thank you very much professor @imagen for that wonderful lecture and May the good Lord be with us and bless us all.

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