Hi Prof @yousafharoonkhan, thank you for your wonderful lecture.

Definition of Decentralized and Centralized Exchange

Decentralized exchanges (DEX) are digital asset trading platforms, that allow for direct trade of assets between two traders without the need for a third party. The two parties (buyer and seller) execute a trade or transaction directly between themselves based on their convenience without rules and regulations from any central authority.

The user secures and controls his private keys and also has total control of his funds without interference from the exchange. There are more than 35 decentralized exchanges including Blocknet, Airswapand, Barterdex.

Centralized exchanges (CEX) are platforms that facilitate the trading of assets but also acts as intermediaries between the buyer and seller. They are highly regulated and are subject to the rules in the jurisdiction they operate in.

They control, secure, and manages user’s private keys. This means they store and secure the funds so that users wouldn’t have to worry about the loss of their keys. Personal information or identity of the user is required in the usage of the exchange platform and for security purposes, transactions are not recorded on the blockchain.
Some examples are; Bittrex, HitBTC, Binance, Poloniex.

Differences between centralized and decentralized exchange.

Differences between the two exchanges will be explained using the following metrics; security, user identity, liquidity, fiat payment, and ownership.

Security
The centralized exchange has less security. Exchange platforms that keep and manage private keys and funds of the users can be hacked. For example, $713million was stolen in 2018, and the Coincheck exchange hack was a huge portion of the stolen money.

A decentralized exchange is more secure; it cannot be hacked.

User identity
Registration and Know Your Customer (KYC) process required in centralized exchange makes user identity less secure.

Decentralized exchange does not require user identity. In this case, the trader’s privacy is protected. users can sign up and commence trading without any identity verification.

Liquidity
Centralized exchanges have high liquidity and decentralized exchange have low liquidity.
Centralized exchange accounts for a large amount of trading volume. They facilitate about 99% of cryptocurrency transactions while decentralized exchanges have very low liquidity since they are low on trading volume.

Fiat payment
The centralized exchange allows the exchange of fiat and cryptocurrencies on their platforms but the decentralized exchange does not allow for the exchange of fiat with cryptocurrency.
This makes centralized exchanges a two-way exchange platform, they accept debit and credit and bank transfers.

Ownership
Centralized exchange retains and manages user’s funds.

Decentralized exchange users have complete control of their funds.

Best two centralized exchange of 2021.**

Binance.

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Binance is a blend of “binary” and “finance”. It was founded in 2017 and it offers trading in more than about 150 coins including Ethereum (ETH), Litecoin (LTC), and its native coin Binance coin (BNB)
It is the largest exchange platform as of now, it is ranked 1st on coinmarketcap with an exchange score of 9.9 and average liquidity of 652.

My account profile on Binance

Why Binance is the best with me.
I started using Binance for less than a month now, and I found that I pay a transaction fee on withdrawals that vary based on the currency but deposits are free.

It is the best for me because of its user-friendly graphical interface. It's peer-to-peer (P2P) allows users to trade with other trusted traders. User’s trades are protected using escrow. Transaction fees are also very low.

Poloniex

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It’s a centralized exchange platform that allows trade in cryptocurrencies like TRON(TRX), Bitcoin (BTC), and others. It was founded in 2013 and launched in 2014. It has a daily trading volume of more than 100M. It lost 12% of its Bitcoin of Bitcoin holding of its customers due to a hack on its exchange platform in 2014. It is ranked 13th on coinmarketcap

The fee schedule of the platform is also shown below.

My account profile on Poloniex.

Why I like Poloniex
It has an easy and simple user interface, no identity needed for small trades, trades greater than $2000 a day require identity. They have good customer support and a low trading fee.

How to install MetaMask
First goto google and search “install metamask”, then visit their webpage metamask.io

Click on download now

Select the preferred OS, in my case, I am choosing chrome

Select install MetaMask for chrome

Click on Add to Chrome

Wait for the dialog box, select add extension when it appears and, then wait patiently while it downloads. This page will appear after it has been downloaded. Select Get Started.

Select “import wallet” if you already have a wallet with a seed phrase and want to import it.
Select “Create a wallet” if you want to create a new wallet. In my case, I don’t have a wallet already so I will select “create a wallet”

You will then be asked to create a new password with 8minimum characters. Read the terms of use and tick the box. Then select create.

You will be given a secret backup phrase to back up and restore your account if need be.

How to use Uniswap exchange.
After going through the MetaMask installation process successfully, you can now do a swap or trade.
Select start swapping to commence a swap.

You first need to deposit or transfer some funds into the wallet. Deposit or transfer any currency into the wallet. It will reflect on your balance if the transfer is successful.
In this window select the coin you want to swap from. I am swapping from Ethereum(ETH).

And select the coin you want to swap to from the list. I am choosing SUSHI.

Click on review swap to see the equivalent amount you will receive in your swap.

thank you