Steemit Crypto Academy Season 4 Beginners' course - Task 7: Dex, Cex, Popular Exchanges and Trading Cryptos
Good day steemians trust our day is good welcome to my beginners course task 7 ,I'll be glad if you can read through, this course is focused on Dex, Cex, Popular Exchanges and Trading Cryptos, lectured by professor @imagen
1.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.
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WHAT IS AN EXCHANGE
An exchange is simply a platform where different kind of exchange pertaining to cryptocurrency or digital currency is done, An exchange allows user to trade digital currency by buying and selling of crypto asset and cryptocurrency are stored in an exchange for future purpose and they involved in peer to peer buying and selling which is very fast and reliable.
Exchange can also be centralized or decentralized , centralized exchange are exchange that is built by a company and with one source when all details of transaction are kept In the companies database and users don't have privacy in which all transactions are monitored.
decentralized exchange are not that common but that are built on thousands of nodes in which users can do anything they want without any intermediary,I.e users have full privacy of there account and they are very secured, no one can easily hack decentralized exchange.
DIFFERENT BETWEEN WALLET AND 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. |
| wallet are not built on blockchain | exchange are built on blockchain. |
| Cryptocurrency are stored in a wallet but can't be used for any active trade | cryptocurrency can be stored in an exchange and can be use for active trade. |
| Crypto can only be stored as crypto, it can't be converted to another form of currency | crypto can be converted to another form of currency in an exchange. |
| Wallet does not need debit card to deposit | an exchange uses debit card for deposit. |
ADVANTAGES OF DECENTRALIZED EXCHANGE
(DEX)
Decentralized exchange is very secured, can't be easily hacked.
Decentralized exchange gives users full privacy.
There's no need for intermediary when doing transaction.
There's no anonymous transaction everything here ,is plane and easy.
private keys are secured by the users,not with anyone that can extort their funds.
DISADVANTAGES OF DECENTRALIZED EXCHANGE
Users mismanage theirs funds since there's no restrictions to withdrawal.
when any mistake is done in transactions it can't be reversed.
Transaction fee is a bit high.
Decentralized exchange are not too popular.
ADVANTAGES OF CENTRALIZED EXCHANGE
It experience high liquidity more often
Trading volume is very high because it is very popular.
Transactions here are very fast and accurate.
DISADVANTAGES OF CENTRALIZED EXCHANGE
Centralized exchange is not too secured,can be easily hacked.
Centralized exchange does not offer users full privacy over their account.
Transactions can be manipulated
Only the company has the private keys of the users.
Users details can be leaked out
Anonymous transaction can occur due to insecurity.
MY EXPERIENCE ABOUT THE EXCHANGE I USED BEFORE
I have used binance exchange before and ever since in join I enjoyed their service though is an centralized exchange, one thing I enjoyed is the speed in transactions and peer to peer transaction, any time am ready to do any transaction am rest assured that am going to get my funds very fast and peer to peer don't allow me stress myself on who am going to sell to or who am going to buy from.
Binance exchange allows me to trade futures trading ,in which am opportuned to double my crypto asset when there's liquidity in the market.
Binance exchange helps me know the current and latest Price of crypto asset and it allows me to store my crypto asset and according to research binance is the largest exchange in the world
CONCLUSION
Finally, centralized exchange are very popular any has so many users and has both advantages and disadvantages so also is decentralized exchange,they have their own prons and cons too , but to me personally I will prefer a decentralized exchange to centralized exchange
Because of the security.
Thanks to professor @imagen for the wonderful lecture.