An exchange is a market where we can buy digital currency by paying our fiat currency and later we can sell it there.We can also use the exchange as a source of transaction and we can trade on it. We can do any kind of trading on it which includes spot trading, futures trading and margin trading. In exchanges we can also sell our assets directly to someone and get money from him which we also call p2p trading.By centralising the buying and selling of a specific type of asset, an exchange can provide fair, efficient, and orderly trading opportunities. Most traders will employ a broker rather than dealing directly with exchanges.There are over four hundred exchanges all over the world and some of these exchanges are centralized and some exchanges are decentralized.There are two types of exchanges that are given below.

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TYPES

• Centralized Exchanges (Cex)
• Decentralized Exchanges (Dex)

What is Wallet ?

A wallet is a software that allows you to save your cryptocurrency. For example you buy a crypro like ADA , Polkadot etc. A type of digital currency. How can you protect your assets because it has no physical form? That is the way that a wallet will take care of for you.

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Your Private keys in wallet allow you to do transactions. Examine these private keys to be secure codes that enable you to spend the cryptocurrency you own. All of these transactions are recorded on the blockchain.These keys are very important. Your crypto money could be stolen if your private keys are stolen. You also lose all access to your holdings if you lose the private keys in any other way.There are two types of wallets.

TYPES

• Hot wallets
• Cold wallets

The Most Important Differences Between a Crypto Wallet and an Exchange

You have complete control over your private key when you use a crypto wallet. Because the key is the only way to access your cryptocurrency, having complete control makes it intrinsically safer to store.

Exchanges, on the other hand, provide:

• Selling
• Buying
• Trading

These three key elements will not be found on a wallet. Exchanges can also see your private key if you give them permission. Someone else could obtain your key and transfer all of your crypto coins to themselves if a security breach is discovered or the exchange fails to take adequate efforts to hide your key.
The fundamental distinction is the function of each wallet.

A crypto wallet is a wallet that is intended to be used for the following purposes:

• Simple to use
• Storage for a long time
• High-level security

To keep you assests safe from hackers, a wallet is preferable to an exchange. Because wallets are subject to failure, especially when stored on a flash or external device, you'll want to include some sort of backup solution.

Exchange Wallet's Purpose?
The majority of people who pick an exchange wallet do so because it is more convenient. The wallet is seamlessly integrated with the exchange's trading and selling features.
These wallets are easy to use, particularly if you plan to utilise the exchange's services frequently.
Your key will be stored on the exchange, you will be putting your security at risk. You'd lose access to your crypto if the exchange went offline overnight, and there'd be no way to get it back unless the exchange came back online.

Mention the advantages and disadvantages of (DEX) and (CEX)

Centralized Exchanges (Cex)

Centralized cryptocurrency exchanges, as the name implies, function as a middleman between a buyer and a seller. Almost all crypto transactions are conducted through centralised exchanges, which provide more trustworthiness.

Centralized exchange

Examples:

• Binance
• Coinbase
• FTX
• bitFlyer
• bithumb

||Advantages||

friendly to the user:
Unlike crypto wallets and peer-to-peer transactions, which can be complicated and time-consuming, centralised cryptocurrency exchanges offer a welcoming user interface and simple platforms, like as websites and apps, that make it easy to transact in cryptocurrencies at any time.

Reliablity:
When it comes to cryptocurrencies, investors and traders are concerned about reliability because they are already operating in a more uncertain environment than traditional bonds and stocks. When it comes to transactions and trading, centralised crypto exchanges provide an advantage by adding an extra degree of security and reliability.

||Disadvantages||

Transaction Fees:
For the services they give, centralised crypto exchanges charge a reasonable fee. Despite the fact that, unlike stock, cryptocurrencies are not subject to taxation, the fees imposed by centralised exchanges are a significant financial penalty. Binance, for example, levies a transaction fee ranging from 0.012 percent to 0.1 percent.

Hacking Risk:

Because centralised exchanges are run by corporations that are accountable for their clients' assets, they are extremely vulnerable to hacking and cybersecurity threats.
Mt. Gox, one of the largest and most trusted centralised cryptocurrency exchanges, was hacked in 2014. The incident resulted in the theft of 850,000 bitcoins worth more than $460 million in customer cash. Following the hack, Mt. Gox declared bankruptcy.

Decentralized Exchanges (Dex)

Users can conduct peer-to-peer transactions without the involvement of a third party on decentralised cryptocurrency exchanges. In (Dex) fiat money not allowded.

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Examples:

• Uniswap (V2)
• Tokenlon
• 0x Protocol
• Venus

||Advantages||

No risk of hacking:
Decentralized exchanges are an excellent solution for investors concerned about hacking because they do not need users to transfer their assets to a third party that could be compromised.

Anonymity:
Unlike centralised cryptocurrency exchanges, which require clients to fill out specific details when opening an account, such as KYC (know-your-customer) information, decentralised exchanges are anonymous and provide complete anonymity.

Market Manipulation is Prevented:
Crypto players are shielded from market manipulation because their interactions are peer-to-peer in decentralised exchanges.

||Disadvantages||

Payments in fiat currency are not available:
The fact that decentralised exchanges do not allow for the conversion of fiat currency for digital currencies is perhaps their largest drawback. Users who do not already own cryptocurrencies or who want to be able to liquidate their cryptocurrencies quickly will find transacting on decentralised exchanges unpleasant.

Liquidity:
Because decentralised exchanges are used by a small percentage of the population (about 1%), they are highly illiquid and might cause liquidity shortages at times. This makes it difficult for a user to transact in an emergency and may result in greater spreads than if they transacted on a centralised exchange.

Complexity:
Because centralised exchanges have their own trading platforms, they offer user-friendly features. Decentralized exchanges, on the other hand, require users to become familiar with a more sophisticated process and do not provide options for recovering passwords if crypto wallet passwords are lost.

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

I has used the exchange many times and the exchange I like the most is called binance because it is a very good exchange and it is in the top 10 in the world and I did spot trading on it very well. Yes, I have done a lot of spot trading on it.I have also traded P-2-P on it many times.In previous days i do some p2p trading on binance . I took some screenshots of it which I want to share with you.