Crypto Academy Season 4 Beginners' course - Homework Post for Task 7: Dex, Cex, Popular Exchanges and Trading Cryptos
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.
An exchange is simply a platform where various types of cryptocurrency or digital currency exchanges take place. An exchange allows users to trade digital currency by buying and selling crypto assets, and cryptocurrency is stored in an exchange for future use. They also engage in peer-to-peer buying and selling, which is extremely fast and reliable.
Centralized and decentralized exchanges exist. Centralized exchanges are created by a corporation and have a single source where all transaction information are maintained. Users' data and transactions are not private in the company's database, and all transactions are watched.
Decentralized exchanges are not very common, but they are made up of thousands of nodes that allow users to do whatever they want without the need for an intermediary. This means that users have complete control over their accounts and that they are extremely secure; no one can easily hack a decentralized exchange.
| WALLET | EXCHANGE |
|---|---|
| Buying and selling of crypto asset are not done in a wallet . | Buying and selling of crypto asset are done in a exchange. |
| Purchasing and selling crypto assets does not take place in a wallet. | Purchasing and selling crypto assets takes place on an exchange. |
| Wallet are more secure | Exchange are less secure and prone to hacker. |
| Cryptocurrency is kept in a wallet, but it cannot be utilized to make a transaction. | Cryptocurrency may be kept in a wallet and used for active trading. |
| Cryptocurrency can only be held as cryptocurrency; it cannot be changed into any other money. | Cryptocurrency can be exchanged for another type of money. |
| To deposit, you don't need a debit card in your wallet. | A debit card is used to make a deposit at an exchange. |
• Transparency is a feature of decentralized exchanges. Every member has access to every information storage on the network.
• Data saved on the network can only be read. It is unchangeable. No one can alter data after it has been saved on the network. It became unchangeable and immutable.
• There is no central authority in the decentralized exchanges. There is no one who owns this system.
• Decentralized exchanges are faster and more secure than centralized exchanges.
• No one else has access to your personal data. Only the user themselves has access to his account.
• You have complete anonymity with decentralized exchanges.
• Because there are no limitations on withdrawal, users mismanage their cash.
• When a mistake is made in a transaction, it is irreversible.
• The transaction charge is a little excessive.
• Decentralized exchanges aren't very common.
• In the event that you forget your password, the central authority will assist you in recovering it.
• It has a tendency to have a lot of liquidity.
• Because it is so popular, the trading volume is quite high.
• In comparison to decentralized exchanges, centralized exchanges are more straightforward and straightforward.
Transactions are completed quickly and accurately.
• Centralized exchange is insecure and vulnerable to hacking.
• Users that use a centralized exchange do not have complete control over their accounts.
• Transactions can be tampered with.
• The firm is the only one who has access to the users' private keys.
• Information about users may be exposed.
• Due to vulnerability, anonymous transactions may occur.
Binance is centralized Wallet that enables users to trade cryptocurrencies to other currencies.
My Experience
• It has the lowest fees in the market when compared to others.
• It provides a full set of DeFi tools for investing in crypto, including farms, liquidity, and so on.
• It has the best exchange rates in the industry.
• Peer2Peer is one of the most useful features for making transactions simple and free of third-party costs.
How to buy a coin on binance
Firstly,I will go to my verified Binance Account www.binance.com or the app.
•First, I'll go to www.binance.com or the Binance app to verify my Binance account.
• Select a trading pair by clicking Market.
• Choose the TLM/USDT trade pair, which implies I want to buy BTC with USDT.
• Select Buy tab.
• Enter the quantity of TLM you wish to buy or the USDT value of bitcoins.
Thank you @imagen for this class