Home work Post On Popular Exchanges and Trading Cryptos Steemit: Crypto Academy Season 4 Beginners' course - Task 7 by @gi-de-on
GREETINGS EVERYONE
How you all doing? let me use this medium to wish you all a happy new month. This is my entry post for the Crypto Academy Season 4 Beginners' Course-Task 7. All thanks to prof. @imagen for such a wonderful class it has made an impact.
QUESTION 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.
INTRODUCTION
Putting in our daily lives as a cases study, the market place is our major source of exchange where we go with our money or produce for exchange for something we need or do not have. This is hence applicable to the Cryptocurrency market. Having a crypto token without a sure and secure source/means of exchange is one hell of a bad omen for business.
For the purpose of this homework task, I will be discussing in detail what the term Exchange is, the differences between wallet and exchange, also, not leaving behind the advantages and disadvantages of DEX and CEX. Last but not the least I am to state if I have exchange before? and hence share my experience with us. All this will be talked about in the subsequent paragraphs below.
MEANING OF EXCHANGE
IMAGE SOURCE
HOW EXCHANGE IS DONE
For exchange, one is either agitating for a service to be done for him or vise versa. For the cryptocurrency market, it is simply a transaction of BUY or SELL.
For the Buy aspect, there are requirements. first of all you have to know what you want. After this you know the amount you want to buy and also the finance to fund this exchange must be available. This is demonstrated in the screenshots below.
Coming to talk about the selling aspect of it, same thing is done as stated in the Buying section but here it is selling to be done. This is demonstrated below in screenshots.
All that is to be done after the whole procedure as shown above is to accept then it would be successful. The exchange above was done on cryptocurrency exchanger called ROQQU.
THE DIFFERENCES BETWEEN WALLET AND EXCHANGE
Despite the their similarities between an exchange and wallet, there is a big difference between the two. Below are some of those differences.
WALLET
The wallet allows all its users/investor the liberty of storage: In a wallet all sort of cryptocurrency tokens/coins can be stored.
Lack of control over your wallet since currencies relies on both the private and public key.
Also, there is high level of security in a cryptocurrency wallet
The storage of a coin can be stored for over a very long period of time.
There is easy access to currencies in a wallet.
EXCHANGE
Exchange is a website where trading of crypto tokens can be done and even sold for fiat money.
In exchange, transactions can be done such as selling, buying or currencies. Even though the wallet does so too.
In exchange, the use of public keys and private keys are not a guarantee for full access.
ADVANTAGES AND DISAVANTAGES OF DEX AND CEX
The various advantages of the DEX and the CEX which are a a direct representative of the Centralized (CEX) and the Decentralized (DEX) respectively.
Below are the various advantages of CEX and DEX, (Centralized and Decentralized).
One of the advantages of the CEX is the high Trading Volume: For the centralized system, very high transactions are been carried out. The CEX allows its traders to move very high amount of funds without ease and less stress.
The centralized system allows its traders access to swap their fiat currencies to cryptocurrencies.
The centralized system (CEX) is easy to operate on. The users/investors does not have to spend much time before there understand or catch up with the system.
The CEX offers it users access to other access such as margin trading, exchange staking, margin lending, etc.
DEX
There is high privacy level: Users are allowed the liberty to access their wallets without any serious form of verification.
There is very High security level in a decentralized setting. Since there is no serious form of verification, it allows users identity to be hidden and hence there is no risk in leaking out users information.
The DEX allows users free access to DApps which help provide financial services such as trading and lending services.
Below are the Disadvantages of the CEX and DEX (centralized and Decentralized system)
CEX
For traders who wishes to keep their identities hidden, the CEX isn't what you should be looking for. There is very high level of verification on the centralized system which may include facial verification and many others.
Since there is a presence of the private keys and public keys, users are only restricted to their coins.
There is a risk of been hacked and this can lead to lost of coins. Therefore, the security level shouldn't be much vouched for.
DEX
Based on the free access/autonomy of users, it is noted that the DEX (decentralized) is not as fast as the CEXs.
Unlike the CEX (centralized system) which has other added features like the margin trading are all absent.
Have you used an Exchange before? tell us about your experience.
When I just started my steemit journey I was opportune to get some reward due to the contents I created. So when I was time to exchange my steem for fiat money, there was a mistake that cost me a reasonable amount of steem. I really needed that money at that time so a simple mistake just made me to lost everything.
This mistake was done through the lack of understanding of various steemit keys. My lack in knowledge on the use of the Memo key was what cost me to loose what I had worked so hard for. Since then I had learnt from my mistake and moved on. In end I will say that everything been done on this platform is important as there say no knowledge is wasted.
CONCLUSION
In a cryptocurrency journey it would be wise to work with a system that has high security and that which allows it users to information to be hidden.
From the class conducted by prof. @imagen we learnt that exchange simply means "
Cryptocurrency exchanges (Digital Currency Exchange - DCE), are digital platforms that allow their users to exchange digital assets, either for fiat money or for other cryptocurrencies. In other words, they are online exchange houses where market prices are generated that mark the value of cryptocurrencies based on their supply and demand.
BEST REGARDS: @gi-de-on.
CC:@imagen.