DEX, CEX, popular exchanges and trading cryptos - Steemit Crypto Academy Season 4 - Homework Post for Task 7

Homework Task 5

Entire question
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

Exchange is an online platform where you see of holding and trading Crypto currencies or exchange fiat currencies for Cryptocurrencies. Furthermore, it shows a demand and supply market view, to both buyers and sellers either to buy or sell commodities. The trading is categorized into spot trading, future trading, margin trading etc. Also, these exchanges allow users to use P2P trading without any interference of a third party. There are lot of exchanges which falls into two categories.
1. Centralized exchanges
This has a central authority to examine the exchange. In a nutshell, the owner of the commodity has the fullest control of their assets.
Chargers are high- Transaction chargers are high and third party will receive the trading fees.
Binance, Huboi global, polonix, coinbase are some of examples for centralized exchanges.

Decentralized exchanges.
Decentralized exchanges has no central authority to govern. Owner of the assets is in the driving seat of the transactions and also believes in smart contracts. Less transaction charges is another advantage in decentralized exchanges. Here the trading can done on your own and do not rely on any personal data like KYC.
Uniswap, Justswap, Airswap are some of the examples for decentralized exchanges.

Differences between a Wallet and an Exchange.

Wallet	Exchange
Crypto wallets main purpose is to allow crypto assets to store for longer periods.	Exchanges are being used mainly for daily utilizing like trading, selling, and buying.
Need some more knowledge in using a wallet and need to have a significant knowledge in Crypto too.	As far as I concern, I believe that exchanges are more convenient than wallets.
Security level is high in wallets as because no one can access without knowing the private keys. The owner of the keys is responsible for the security of the wallet.	In exchanges keys are not under the owner’s custody and the security is in a bit of a risk, but the platform will help to recover the lost accounts as well.
Transaction fees are lower and this opens up lot of entering of users.	Transaction fees are bit higher than the wallets.
Wallets can exist in an offline platform too.	Exchanges can only exist in an online medium and they need a good internet connection as well.

Source

Mention the advantages and disadvantages of DEX and CEX

Advantages of CEX

• As the trading volume in centralized exchanges is high, always the liquidity is bigger than expected.
• In centralized exchanges, the transaction speed is relatively higher and very time efficient.
• Transactions are made under assistance of the CEX. Because of that errors while doing the transactions may be reduced.

Disadvantage of CEX

• When doing transactions by using the experiences we’ve got, it shows a relatively high transaction fee.
• Can expect hacker attacks due to lack of security.
• As the registration needs KYC, users may have to submit their personal documents and details to get verified. So, it is a bit harder for the people to handover the relevant documents and it also carry a risk to submit those documents.

Advantages of DEX

• Decentralized exchanges are secured than CEX because the user or the owner has the responsibility of their own assets.
• KYC is not required for DEX and the registration is ever so easy.
• When doing transactions can experience relatively low transaction fee.
• DEX will not affect by market manipulation.

Disadvantage of Dex

• Liquidity and the volume of transaction is very low.
• DEX will only allow you to do trading with cryptocurrencies but not with fiat currencies.
• Once lose your wallet private keys, no one can recover your account.
• Another demerit is that the users need a good knowledge than the basics to retain on the platform.

Have you used an Exchange before? tell us about your experience
Yes, during my small career with cryptocurrencies , I’ve mostly worked with Binance exchange, in order to covert my Steem into USDT . So here I will let you know about my experience with that exchange.

First of all the users of Binance has to submit their KYC to get verified for the long use.

• Binance is crowned as the world’s most popular online centralized exchange for high ranking to lower ranking cryptocurrency trading and fiat currency trading with cryptocurrencies. Not only for trading but also Binance is a place to store electrocnic funds as well.
• Binance has more than 500 varities of cryptocurrencies to trade with.
• Traders and miners can get a broad view of price fluctuations using Binance exchange.
• It has lot of transaction types to work with like Crypto to Crypto transactions, Crypto to fiat currency transactions, Crypto/fiat to wallet transactions etc.
• It is a very user friendly platform to work with
• BNB or Binance coin is their Block-chain based coin.
• Limit order, Market order, Stop limit order, Stop market order are some of their trade order types that can be really helpful for the traders.

My Binance exchange home page

Listed Cryptocurrencies

Trading platform

This is the end of my homework for the beginner's course task 7 and Prof.@imagen thank you very much for giving this wonderful opportunity to learn this valuable lesson.