Introduction

To understand decentralized and centralized exchange, it is very important we know the meaning of exchange. Cryptocurrency exchange is trade that enables customers to buy or sell one cryptocurrency for other assets like fiat currency or other cryptocurrencies.

Decentralized exchange

Decentralized exchanges popularly known as DEX is a cryptocurrency exchange that enables direct peer to peer cryptocurrency exchange to take place online in a private secured way without involving an intermediary.Decentralized exchange operates without a central control center and traders have full control of their digital assets which they use in trading. Transactions are done through smart contracts and decentralized exchange is characterised with high level of privacy, that is only the traders are aware of the transaction and no one is aware or can interfere into their exchange.

Centralized exchange

Centralized exchanges also referred to as CEX is the opposite of decentralized exchange. In this system, there is presence of trusted intermediary to facilitate trades between users and help them keep their assets safely. The exchange maintains traders accounts, facilitates exchange and provides other services. It also introduce new cryptocurrency or token to users. Centralized exchange is convenient for traders because their assets is managed by third party who are expert in trades and also secure users assest, they have a team of cybersecurity experts who secures vaults from hackers.

Difference between centralized and decentralized exchange.

Management: In centralized exchange, the Intermidiary Is Responsible For The Management and control of exchange, they oversee all trades between users While in a decentralized exchange, all the control and decisions is owned by the trader only and the platform has limited or no control over exchange. This is one of the reason why traders choose decentralized exchange.

Assets security: When it comes to security, Decentralized exchange is secured than centralized exchange. Centralized exchnage is prone to attack from hackers, hackers can gain illegal entry into the intermediary pool and steal all digital assets this is why centralized exchange are putting more effort to improve their security while it is impossible to hack all accounts in decentralized exchange because assets are stored diffrent and hackers can't gain access to all this account.

Trading Charges: Centralized exchange charge their users alot for maintaining their account, they collect a lot of fees for each exchange and account maintainance while in Decentralized exchanges, there is little charges or no charges for account maintenance or trade.

Legal Restrictions: Government can eaildy regulate exchanges on centralized exchanges platform because this companies are licensed by the government and also users go through a verification process known as KYC to confirm their identity but in decentralized exchanges there is no central control to manage and regulate trade so users are not fully verified and this platform can be use for criminal activities like money laundering, terrorism, etc.

Two best centralized exchange in 2021

Coinbase

Many cryptocurrency traders are familiar with coinbase platform,it is one of the largest centralized exchange in the world, traders have access to over thirty different cryptocurrency to trade to and they have the minimum account opening fee among other exchange platform also they have a team of security experts to protect the assets of traders against hackers and incase hackers gain access to the vault which is impossible, they have their account insured so traders can still claim their assets. This is the major reason why traders use coinbase due to the trust they have in them and the measures this platform has put in place incase of theft.

Kraken

Kraken is one of the most reliable digital assets exchange. Users can trade diffrent types of cryptocurrencies and also covert their digital currencies into fiat currencies or fiats money to digital assets. Alot of top leading digital assets are traded on kraken like BTC, LTC, ETH, XRP, etc.

The major advantage of kraken is it design and used interface and features, kraken developers main aim is to create a platform where people can easily trade, this platform is so easy even for beginners as there is a guide and the design themes will make it easy to understand all functions on the platform also kraken has a very good cybersecurity experts who are working tirelessly to protect the platform from hackers and some other features of this network is staking, margin, account management, etc.

MetaMask is a decentralized protocol that allows etherum participants to have access to their account or wallet freely and also access dapps.

To install the metamask you need to download it from your interner browser or app let's use internet browser for our example.

You search for the website https://metamask.io/ and install the app, the logo looks like the image below.

When you're done with the installation, you will read the terms and condition and if you’re okay with it, you create your vault so you'll click on the icon to create account

You create your password and wait for the site to send you the 12 unique words

You need to write this codes down because they are your authentication code incase you are ask again, after writing it down, metamask try to be sure if you've written it down, they ask you to write again and you will write then click on next.

The image above will be displayed so you have successfully installed and registered metamask and you can buy eth into your wallet and enjoy other services.

Uniswap is a decentralized exchange where you can trade different types of cryptocurrencies or tokens.

How to trade using uniswap:
You first login into your uniswap account and the display will be like the image below.

Click on the wallet you will be exchanging it, there are a lot of popular wallet on uniswap but let use metamask cause we explained it earlier.

After connecting metamask to my uniswap account, the next pick the token I'll like to exchange my cryptocurrency to:

Having select the token, I'll confirm swap and wait for payment to be completed

@yousafharoonkhan.

Cc: @steemcurator02