Crypto Academy Season 3 Beginners' course - Homework Post for Task 5: [Dex, Cex, popular exchanges and crypto trading] by @small-ville
Question 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.
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What is an Exchange
Exchange simple means trading assets of value. It is a Financial marketplace where buying and selling of assets take place. Exchange platforms or companies have been around since 1700, they include the NYSE9(New York stock exchange), NASDAQ, LSE(London stock exchange).
In the world of cryptocurrency, an Exchange is a platform where traders and investors engage in the buying and selling of cryptocurrencies using fiat currencies or other cryptocurrencies, although their services go beyond buying and selling, they include; storage of assets, Staking of assets, Farming of assets and Peer to Peer transfer. These exchange platforms make profits through transaction fees and asset listing charges.
What is a wallet
A wallet is a crypto platform used for the storage and transfer of crypto assets from P2P or from person to an exchange platform. The crypto assets are stored using what is called the Private Key and can be transferred and accessed at any time.
What is an Exchange
An exchange is a crypto trading, storage and transaction platform where crypto assets are sold, bought, and staked.
Differences between a Wallet and an Exchange
| * The user has control over the time and amount of transfer | The user can be restricted on time and amount of transfer |
| * The wallet's basic function is to store and transfer crypto assets | The Exchange basic function is to trade crypto assets |
| * A user can easily access their assets | KYC verifications can hinder users from accessing their assets |
| * Wallets have high-security credibility | Exchange are mostly centralized, therefore are prone to attacks by hackers |
What is the DEX (Decentralised exchange)
The DEX as the name goes is a decentralised crypto platform where users have the ability to have full control or autonomous power over their crypto assets. examples include;
- Trust wallet
- Tron link
- Klever
- Token Pocket
Advantages and Disadvantages of DEX
| * The Private Key makes it impossible for hackers to access the user's wallet | A user can lose the Private Key, which is what protects the crypto asset. |
| * The user does not need to provide private information | wallet Identification of may be impossible due to no placed identity on the wallets. |
| * They are less prone to attacks by hackers due to its decentralised nature | The user takes responsibility for his losses due to an external breach or an attempted hack. |
What is CEX( Centralised exchange)
The CEX is a centralised crypto trading platform, where the exchange is controlled by profit-minded Authorities and the users crypto assets are under the responsibilities of the companies. these platforms include;
- Binance
- Coinbase
- HotBit
Advantages and Disadvantages of CEX
| * The KYC makes it possible for users to easily identify or take ownership of their wallets | the user has less privacy to personal information due to the KYC |
| * Deposits and withdrawals of Fiat currencies are encouraged | Taxes or fees are placed on every withdrawal transaction. |
| * The exchanges take responsibility os losses due to attacks from hackers | They are prone to hackers due to their centralised nature. |
Have you used an Exchange before? tell us about your experience
Yes, I have used an exchange before. My experience using an exchange was quite simply. The first exchange that I was introduced to was the finance exchange which is one of the best crypto exchanges in the world. The user interface was quite simple for me because they have settings for a beginner user and an advanced user, this was very helpful in navigating through the platform. After I registered by putting in my private detail, I was able to access the trading features that were quite easing to use. I went on to make my first purchase of the BNB coin after I had already injected a fiat currency through my Bank. I really like the exchange, but I did not like the idea of sharing my private information, but in general, I felt happy after my purchase.
Thanks for reading
Special Regards to;
@steemcurator01
@steemcurator02
@steemcurator03
@imagen
@sapwood
A very good crypto post with quality information for newbies
Thanks
Hi @small-ville, Thank you for taking interest in the 5th Task of the Beginners Fixed Class. Your grades are as follows:
My Review and Suggestions:
You have completed the task.
You created an article with a very good structure, great work!!
There are some grammatical errors, please fix that.
Don't mention steemcurator on your homework.
Thank you!