Crypto Academy Season 4 // Beginners course - Task 7 // CEX, DEX, Popular Exchanges & Trading Crypto. for Professor @imagen by @madilyn02

INTRODUCTION

After going through this wonderful and impact with each other. I must say that it has really made and help me understand a lot when it comes to decentralize and centralized Exchange in which one is all about third party and the other is not, I will complete, the tags were giving my best answers to the following questions.

Questions

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

Explain in your own words what an Exchange is

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Exchange has so many meanings and people also see it in many ways to someone celebrating an occasion. It can be seen as interchanging of gift, it can also be seen as giving out the material or something and receiving another material or thing in return.
When you talk about exchange in cryptocurrency, It has to do with the ability of the individual or trader of coins to be able to buy assets and also sell it with the main aim of maximizing or making profit, because he or she may buy from another trader when it is at low price then hold it till when it rises, and then later sell it at the higher price. Which will help in profits generation.
Example may be when a trader buy a coin like Bitcoin when it was low far back and now it is high which mean the trader is making huge profits. When we talk about exchange, there are so many ways in which a trader can perform exchange of cryptos and I will be listing a few exchange application and website such as binance exchange, olamax exchange, coinmarket and coingecko etc.
In this site or application he or she can perform transaction in the site or application such as buy or sell assets.
We have two types of exchange which is very important the first one is centralized exchange and the other one decentralized exchange in which I will explain them as we move further.

Advantage of exchange

• Has stated earlier, exchange helps the cryptocurrency trader to make more profit, in that he buys at low rate and sell at high rate.

Disadvantages of exchange

• Imagine a trader buying at low rate and he or she is face with immediate needs such as emergency, the market is volatile which mean the coin may be even lower than what he actually bought and if he sells at that moment it will be a great lost.
  
  
  

Differences between a Wallet and an Exchange

Wallet	Exchange
1) In wallet, the trader here instead of trading or marketing of coin just keep it(save) in the wallet	In exchange, the trader here trade the coin he may buy and also sell it but will not save.
2) Wallet is decentralized and by this it means there is no involvement of any central authority or third party when the individual want to perform transaction	There are 2 type of exchange the centralized(third party involved) and the decentralized exchange(no third party)
3) peer to peer user transaction is being performed here	Exchange can be done in financial institutions
4) when we talk about wallet, it has a higher level of security which makes it strong and trusted because the user will be certain that with the strong security it will not be hacked	Unlike wallet, the exchange has low security due to third party that can monitor your account and may probably hack it.
5) Here, the user can perform as many transaction he wants to, no limitations	Here the user is limited in transaction.
6) Here, the user is being given both the private and public keys	It is the user that freely choose the key.

Mention the advantages and disadvantages of DEX and CEX.

DEX

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The full meaning is decentralized exchange. It is very important type of Exchange. In that here there is a higher security level and makes the trust level of the user High, because with this user will be assured that with this his or her fund is safe and transaction too. There charges rate here is low

Advantage of Dex

• One of the best advantage of this type of exchange is that there is no involvement of any Central Authority, which means we don't need anybody or third party knowledge for you to perform any transaction. Transaction are being performed at your own will
• The trust level in this type of exchange is high because the security States and also High
• The high level of security means that it cannot be easily have by scammers, the user is always certain about the funds safety.
• When it comes to the way that it is being charged, transaction are charge at low rate.

Disadvantages of Dex

• There is always a problem when it comes to KYC verification in there the may request for documents in which the users may not have such as voters card.
• should incase the user misplaced or lost is accounts password or keys. The account is lost and all the funds in it are all gone.
• This type of exchange is not popular, which means it is only a little part of the population that may know it or have idea about it.
• It is not for anyhow individual, the individual must have idea about cryptocurrency.
• No third party which mean the user will not have someone to complain to.

CEX

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The full meaning is centralized exchange, This type of exchange is the one that involved it third party.The security level is not as strong as a decentralized exchange, which makes it prone to attack. Be this type is very popular. And with the third party involvement, if the user should face any challenges he or she can always call on the three party attention and have his or her problem-solve though the charges is high. And if they user key or password is lost he or she can always retrieve it and account recovered.

Advantages of Cex

• In this type of exchange, there is a third party involvement, which will always attend to individual problem thereby making the individual understand What's this type of exchange is all about .
• The user doesn't need to have idea about crypto-currency before using it.
• Unlike the decentralized exchange, if the individual loses his key, with the help of KYC, It can be easily recover. Which means the individual funds is also recover.

Disadvantages of Cex

• The charges rate in this type of exchange is always high.
• Unlike the decentralized exchange the rate at which this type of exchange of Secured is Low which makes it prone to be hack or attack.
• It is risky because the central Authority has all your identity recorded in the KYC and may decide to physical contact thieves to attack or Rob you of your funds.
  
  
  

Have you used an Exchange before? tell us about your experience

Yes, Olamax Exchange

Olamax exchange to me happen to be one of the best exchange because I can buy and sell my coin at a good rate with bonus attach to it when I sell to the exchange, it has no application but website. If I should encounter any difficulty there is alway a standby customer care that attend to us 24/7.
When selling to the exchange site you can do it without loginng but when to buy from them the will request for the individual KYC and if not verified you will not be permitted to buy.
When selling to this exchange site you can receive value in airtime and also through bank.
It is an interesting exchange site.

brief screenshot from olamax exchange siteolamax

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Here, if you want to sell there is a spavlce for you to select the coin, put the quantity and the price the will buy with bonus will display

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You can also receive value in 3 form either from bank, airtime or data very interesting

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To buy from them, there is a space for you to put your wallet address and your KYC must be verified otherwise you will not be able to buy from the site

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Above here, there are number for you to lay complain to and social media handle to join and find solutions incase of difficulty.

Conclusion

Having gone through the lecture and answering the question, I must commend the prof @imagen for the wonderful lecture
I have really understood what exchange is all about.
@dilchamo
@nane15