Steemit Crypto Academy S5 -Centralized Exchange and Decentralized Exchange - Homework Post for Task 7

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Introduction

Greetings! everyone, i'm delighted to write again today on this task 7 of the introductory courses and i am giving answers concerning question 3.

Questions

Explain in your own words what an Exchange is. Differences between Wallet and Exchange. Mention the advantages and disadvantages of DEX and CEX. Have you used an Exchange before? Tell us about your experience.

What is an exchange

The word exchange sounds or signify an action taken. It therefore means an exchange is the action taken in the process of giving out an asset in return for another in a comparable value of what was given out

In cryptocurrency, exchange refers to giving out FIAT money to get a particular crypto currency that is worth the FIAT value. This exchange happens in a reverse direction.
Crypto currency can be exchanged for another crypto, Example: swapping bitcoin worth $50 for Steem worth $50 in the same exchange platform.

Exchange is then referred to the actions taken between two people or group of exchangers (more than 2 people). platforms that gives users this services can either be a Centralized or Decentralized.

Differences between wallet and Exchange

Before getting to talk about its differences, let us first know what this two terms means.
Exchange is a platform that gives access to giving and receiving between two parties or swapping available coin or crypto for desired one at the same exchange rate. While Wallet is a digital kind of crypto bank where an individual saves their assets there. The wallets serves as the bridge between our exchange platform and our assets. let us look at their differences

Exchange

• This is a website that allows user to buy and sell digital asset for fiat currency or convert fiat currency for digital assets.
• User does not get granted full access to their private keys.
• digital currencies can be traded, sold out and bought.
• internet connection is required for an exchange.

Wallet

• A software program that allows user to store their digital asset.
• users are granted full access to their private keys.
• wallets do not offer Buying, selling or trading features.

Advantages and Disadvantages of DEX and CEX

Advantages of DEX

• It is well known for enhanced privacy, good and stronger security and gives owners control over their digital assets.
• It has a public and transparent transaction and requires no user personal informations
• smart contract helps reduce the fear in users over transaction.

Disadvantages of DEX

• Low transaction fees and higher charges
• it restricts buying assets with FIAT currency,it only exchanges digital currencies for another.
• it needs an expert to know how to get Things done.

Advantages of CEX

• Trades can be done with borrowed assets (Margin trading)
• It is easy to use and explore.
• It exchanges crypto currencies for FIAT Money.
• Retrieval of lost keys is made available in the platform and using the platform account reset methods.

Disadvantages of CEX

• The funds are under a central authority which makes an easy route for hackers to break in.
• Personal information like the state ID or Passports is required.
• Coins are under a third party custody, so when a hacked event takes place, coins are being lost if the platform is not a responsive kind of.

My experience in an exchange platform

I have used a centralized exchange platform and my experience was a bad one. I used BINANCE being a centralized platform. it registration process requires some private informations such as ID, face verification and also submitting personal documents for KYC verifications.

Verification process might take few hours depending but mine took about 2 working days to get me verified. I have traded different tokens such as the BTC, Steem, Trx and others also exchange crypto for Fiat money.

All this exchanges were dome with no inconveniences.
Thanks for reading through my task entry.