Crypto Academy Season 3 Beginners' course - Homework Post for Task 5: Dex, Cex, Popular Exchanges and Trading Cryptos for professor [@imagen] by @obikay
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.
What is crypto Exchange
A crypto Exchange can be defined as a [digital] place where trade is been made for fiat money or some other cryptocurrencies.
Crypto exchange is more like a market where you can do your trade [buying & selling], is just that is an online market meant for crypto trading. There are two types of exchanges namely; Decentralized exchange. Examples are; burgerswap, uniswap, Quickswap and
Centralized exchange: Examples are;
Huobi, Poloniex, Binance, Coinbase.
source
Differences between a Wallet and an Exchange
| Crypto Wallet | Crypto Exchange |
|---|---|
| In crypto wallet tokens are in hold and cannot be traded | you can buy and sell tokens |
| Wallets have much security potential because it can't be hacked due to its private keys can be accessed by only the holder | Exchange on the other hand are not secured, it can be hacked and will cause the user loosing funds |
| Wallets have low transaction charge rate | Exchange transaction charges are high |
| Wallets do not depend on exchanges | meanwhile exchange depends on wallet to get crypto assets |
| Wallets can be software or hardware applications used for storing | Exchanges are used for exchanging cryptocurrencies |
Mention the advantages and disadvantages of DEX and CEX.
Centralized Exchange (CEX)
Advantages
Centralized exchange are user friendly in the sense they are easy to use for trading
CEX give higher liquidity and volume.
They are very organized and fast in transactions and trade.
Disadvantages
full control access by the user is not guaranteed
The funds are prone to risk and making it open to hackers
Commission charges rate here are more higher.
Decentralized Exchange (DEX)
Advantages
full control access by the user over own funds
They are more secured and dependable
The commission charges here are low
Disadvantages
Loss of crypto assets if the user forgets his/her password
Not retrievable when been hacked
Decentralized exchange is not that easy to use & understand
Have you used an Exchange before? tell us about your experience
Before I joined Steemit I was not familiar with all the crypto stuffs and the rest. I joined the steemit platform few months back, I picked interest in the cryptoworld. So with the knowledge I got through cryptoacademy homeworks I was able to use an exchange platform, Poloniex, where I trade my steem and as well run some other transactions. My experience using the exchange platform was a good one. Though am exploring some other exchange platforms.
Cc
@imagen