Crypto Academy Season 3 // Beginners course - Task 5 // CEX, DEX, Popular Exchanges & Trading Crypto. for Professor @imagen // By @ononiwujoel

Hi professor @imagen, I am @ononiwujoel one of your students in Crypto Academy and a member of the steemit platform. This is my homework submission post from your lecture Beginners course - Task 5 and I'll be writing on the question 3.

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.

Introduction

Since the launch of Bitcoin in the past decade, cryptocurrency has become a trending topic worldwide, this have led to the launch of several other cryptocurrencies and as a matter of fact we now have over 11,000 cryptocurrencies in the crypto market which have continued to grow larger and more voluminous daily. There have also been a surge of people's interest in cryptocurrencies.

But launching and selling of cryptocurrencies is not all it takes to achieve a stable network and crypto market, there have to be a medium through which people can trade and also save their tokens just like we have banks and markets and this brings us to crypto wallets and crypto exchanges.

What is a Crypto Exchange?

A Crypto Exchange can simply be described as a digital platform where people can trade their cryptocurrencies, either for fiat currencies or for other cryptocurrencies.

A Crypto Exchange is just like a market where trading and exchanges can be carried out except that it is basically for crypto trading and it is an online platform too. Today there are many of such exchanges and they have their differences too even though they are all crypto exchanges. For example, some exchanges provides functions like margin trade and staking while some do not. So they all have their strengths and weaknesses.

There are basically two types of crypto exchanges which are centralized exchanges like binance, Huobi, Kraken etc. and decentralized exchanges like Uniswap, MDEX, Sushiswap etc.

Difference between crypto wallet and exchange

There is much difference between an exchange and a wallet, which includes;

Crypto Wallet	Crypto Exchange
Main function of wallet is to hold tokens and keep them save but cannot trade	In exchange tokens can be traded and also bought
Wallets are way more secure because they have private keys which are known only NY the owner, so it can't be hacked	Exchange are less secure than wallets because the company running the exchange have access to your private keys, so if the exchange is hacked you may loose your assets
Wallets are in full control of the owners (very private)	Exchange is not in control of traders but the company that owns it, especially in CEX (less private)
Wallets are very accessible by the owners whenever they wish	An exchange can go on maintenance and all users will have to wait till whenever they're done before they can access it

We also have exchange wallets, these are wallets that are already part of the exchange and they also function like a private crypto wallet. So this is common with users of a particular exchange so you can trade faster in the exchange.
For example we have a Binance wallet in the Binance Exchange where you can keep your tokens and trade directly from there. Same way its applicable to many other exchanges.

Advantages of DEX (Decentralized Exchange)

• In decentralized exchange, you have absolute privacy and full control of your account during trades because it uses the blockchain technology

• There are very little or no charges and commission in using decentralized exchanges

• Decentralized exchanges provides full anonymity to users and there is no requirement of KYC (know your customer) for registration

• Decentralized exchanges have a Topnotch Security system because it uses the blockchain technology so it cannot be hacked

• Decentralized exchanges don't require any intermediary during transactions, hence making it faster and more in control of users

Disadvantages of DEX (Decentralized Exchange)

• Decentralized exchanges are difficult to understand and use unlike the centralized. And users must be very good in Crypto trading to be able to use them efficiently

• Decentralized exchanges only trade in cryptocurrencies, they don't swap crypto for fiat currencies

• Due to the fact that there is no KYC in decentralized exchange, if you transfer to a wrong person you cannot recover your asset again

• Decentralized exchanges lack some features that are found in many centralized exchanges like margin trading, staking and stop loss order.

• Decentralized exchanges are not yet popular in the crypto market.

Advantages of CEX (Centralized Exchange)

• Centralized exchanges are very popular and understood in the crypto market

• There is KYC verifications so error in transactions can easily be recovered and there is cases of money laundering and online fraud in centralized exchanges

• There are many interesting features and functions in the centralized exchanges including margin trading, stop loss order and even P2P trades

• Centralized exchanges are very organized and accurate in transactions and trades

• The interface of centralized exchanges are very easy to understand and this makes trading much easier

• Centralized exchanges usually have almost all popular cryptocurrencies available for trades and also exchange crypto for fiat currencies

Disadvantages of CEX (Centralized Exchange)

• Centralized exchanges have less security than the decentralized. Infact there have been cases of CEX getting hacked and people losing their assets

• Centralized exchanges are fully controlled by the companies running them so there is less privacy and every transaction must be approved by the company which also serves as an intermediary

• Most centralized exchanges have high fees and commission for trades

• There is less or no anonymity in centralized exchanges because they also use the KYC verification

Exchange I have used

Well as a newbie in the crypto world, I have used very few exchanges so far including Binance, ProBit Global and Huobi Global. So I can give a little detail about binance and ProBit.

Binance is unarguably the most popular crypto exchange so far in the crypto industry. It is a centralized exchange but also have a branch or should I say an extension that is more decentralized called the Binance DEX. Binance also have decentralized functions like P2P trades. It has an integrated wallet where you can keep different types of networks including BNB, Bitcoin, Litecoin, Steem, BCH, ADA, Ripple, Dogecoin and a lot more.
Binance practically trade all popular cryptocurrencies available in the crypto market.
You can also deposit fiat currencies in binance and swap fiat for crypto tokens.
You can also view current prices of coins in the market. Binance is a complete package indeed.

So far I've only been able to send steem to my Binance wallet and exchange it for Bitcoin and vice versa.

Thanks for reading and I hope I met your expectations

Cc: Professor @imagen