Hello My Dear Steemitians! Today I'm writing this post as a homework post for the professor @imagen's post on the topic of "Dex, Cex, Popular Exchanges and Trading Cryptos" after reading and studying it carefully.

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So, Here's my homework on Question 3 as follows:-

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.

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Source

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In the world of cryptourrency an exchange is a platform where its users can perform different cryptocurrency transactional operations such as buying, selling & holding of Cryptocurrencies. Also users can swap one coin in exchange of another. Moreover, users even can also change Crypto for fiat or vice-versa. In simple words, we can say that an exchange is an online trading/market platform of crypto where actions like buying and selling of cryptocurrencies are done.

Another great feature of the cryptocurrency exchanges is that one can store his funds in the wallet section given on the exchange.

Some of the examples of crypto exchanges:

• Binance
• WazirX
• Huobi Global
• Uniswap
• Coinbase
• CoinDCX
• Kraken
• Roqqu,
  etc..

In almost every cryptocurrency exchanges users gets to choose the currency for valuation displaying purposes. depending on the currency selected by the user, his crypto value will also be displayed in fiat equivalence.
let me explain through an example:
If i want to know the value of 1 steem on the exchange I'm using, it will display me the equivalence value of 1 steem in the currency I chose. For more clarification i have attached the screenshot of binance account where i selected the option of currency as INR.

Here, currently the value of 1 steem is INR 29.68.

Mainly, their are only two types of digital decentralized exchange (DCE) that can be either Centralised (CEX) or Decentralized (DEX).

Centralized exchanges are owned an run by a company under the control of a single governing authority who handles all the activities of users. Hence the users of centralized exchange doesn't have 100% control over their assets and account as owners of this exchanges have access to their accounts. So their is a kind of unprivacy and insecurity. And Moreover, because of KYC process is required in centralized exchanges they get users almost every official details.
Some of the examples of Centralized Exchange platform are; Binance, WazirX, CoinDCX, Roqqu etc.

Whereas a Decentralized exchange is a kind of exchange which is not owned by any company or single governing body. It works on the principle of p2p network (peer-to-peer) where a seller is allowed to do trades directly with buyers through the smart contracts without any kind of interference from any mediator or third-party! Users in this exchange have 100% control over their assets and have rights to do transactions as per their wish.
Some examples of Decentralized exchanges are; Kyber, Uniswap, tokenlon, 0x Protocol, etc.

Differences between a Wallet and an Exchange.

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As in the answer of first question i have already mentioned about what an exchange is. So, Before deriving the differences between this two terms it will be better to get a basic idea the term wallet first;

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Wallet

We can define a Wallet as a program or software or a paper in which a user can save or stake his crypto assets with a blockchain network. Users can access their wallets through the keys in order to buy, sell or hodl his funds. We can access this wallets through online or offline mode depending on its type. Through this wallets users can hold their digital assets and moreover, some wallets allows their users to swap their assets with another and vice versa.

The wallet users gets a high level of security through the keys and also they get 100% control over their wallet keys and can assess their funds as per their wishes.

Cold Wallets- A cold wallet means that the keys this wallets and accesses are stored offline. It simply means this wallets are not accessed through internet so their is a high level of security in this wallets as practically it is not possible to hack. Some examples of this wallets are Trezor,Ledger N, CoolWallet Pro, KeepKey, Ellipal Titan, Safepal S1, etc .

Hot Wallets- We can define the meaning of Hot wallets as the wallets which are accessed online through internet. Some security issues are in this wallets as their are some chances of getting hacked. Some examples of this type of wallets are Electrum, Coinbase Wallet,Edge Wallet,Trust Wallet, etc.

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Difference between Wallets and Exchanges :

Parameters	Wallet	Exchange
Percentage of Decentralisation	More	Less
Main Function	Storage of Crypto assets	Trading of Crypto assets
Safety	More safe	Less Security
Control over users assets	users have 100% control	Exchange owning companies have almost control everything
Supported Currencies	cryptocurrency	Cryptocurrency with Fiat
Accessibility	users can assess this via both online and offline mode	only accessible through online mode.

Mention the advantages and disadvantages of DEX and CEX.

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Advantages of DEX :

• High level of privacy and annonymity.

• In DEX while trading users have full rights to manage or hold their keys.

• DEX on the principle of smart contracts so, the users are able to do trades more faster with low trading fees. And also due to smart contracts trades are done directly through user's wallets.

• This exchanges works on completely decentralized systems hence no single governing authority controls the whole network.

• This DEX's system is very difficult to hack since, it is operated on different nodes it is not possible to hack all the nodes at a time, so more security!

• Moreover, DEX's cannot be controlled or regulated by government.

• Here, In DEX users don't need to verify or conform their identities through any KYC process.

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Disadvantages of DEX :

• It is impossible to recover your keys or passwords on DEX's once lost or forgotten which could result in losing your all assets.

• Dur to the annonymity of users, many fake accounts can be created on DEX's by fraudsters which will lead to fraudulent transactions or loss of legit users.

• This platforms are not user-friendly!

• DEX's have less liquidity and trading volumes.

• Cancellation of transaction are very costly as compared to CEX.

• In DEX only trading of Cryptocurrencies are done so fiat deposits and withdrawals will be missed on this platform.

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Advantages of CEX :

• In CEX high speed transactions are provided for users. Due to this users are able to do trades instantly.

• In Centralized Exchanges numerous cryptocurrencies are available to trade for users. So the CEX users gets a very big list of crypto coins to choose for trading.

• Having Higher liquidity is also a very big advantage of CEX's. Due to higher liquidity users can easily buy cryptos at low prices and also they can easily convert their crypto assets to cash and withdraw.

• Moreover, centralised Exchanges are more user-friendly and more popular than DEX's.

• For new users it is very easy to find and use any CEX's as compared to Complex functioning DEX's.

• Also, Centralized exchanges have a very higher trading volume when compared to decentralized exchanges.

• Our assets are under the safety of central authority in CEX.

• Due to the Know Your Customer (KYC) verification process in CEX only users with true identity can do trading so it prevents fraudulent criminals from creating fake accounts.

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Disadvantages of CEX :

• In Centralized exchanges users don't have 100% control over their assets and keys. It makes CEX unsecure and chances of losing assets are there too.

• In CEX server issue are always present. Due to the system breakdown users need to wait till the system gets re-established properly. It affects the performance of the system because only a single server is used to control the whole network. Once a fault occurs in system, tye whole network stops functioning.

• The CEX system is very likely to get hacked since it operates on single server it is easier for hackers to target and get access of the system. And once the hackers succeeded they can get all the keys of users and steal their assets. Because in centralized system users keys are stored.

• The Owners or the controlling authority of centralized exchanges can manipulate the prices to be displayed or trading volumes of cryptocurrencies as per their wishes or according to their profit making strategy. Which can ve beneficial for them and can cause a serious loss to some trades.

Have you used an Exchange before? tell us about your experience.

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Talking about my cryptocurrency experience i have tried using many exchanges before and i still use some of them for trading. Because of this cryptocurrency exchange platforms i got the opportunity to do trades like buying, selling and to hold my crypto assets.

Nowadays i use some central exchanges such as, binance, WazirX, CoinDCX. Out of this exchanges mostly i prefer to use WazirX because of its user-friendly interference and pouplarity. Also it very easy to add funds in WazirX through mobikwick wallet. Almost every cryptocurrency is listed on this application which I wish to trade and due to its two factor authentication feature it is very secure for users. But also sometimes i faced app crashing issues and server problems during bullish phase.

Also when i was a Beginer in Crypto world i did some panic sales due to the FOMO (fear of missing out). I have attached a screenshot below where i bought a Crypto currency on a high price and immidiately sold them due to FOMO on low price. Due to this incident i lost some of the my funds. But they say that, everything happens for good! And i learnt a lesson not to sell our stake at low prices due to FOMO.

Panic sell due to FOMO

As the time passed i reasearched more about cryptocurrencies and learned to invest. Due to this i got alot of benefits as you can see in the screenshot below where i bought assets in low price and sold them on a high profit.

Some real profit booked!

(I have taken above all the screenshots from my account on centralized exchange "WazirX".)

Conclusion

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Because of cryptocurrency Exchanges liquidity is provided in the world of cryptourrency trading. This exchanges gives the opportunity to its users to buy, sell or hold cryptocurrencies. Due to Exchanges trading of Cryptocurrencies became easy and cryptocurrencies got popular the world.

And a big thanks to professor @imagenfor giving such a wonderful lecture. Because of his lecture now i have learnt about the terms decentralised exchanges, centralized exchanges, wallets and their uses with various advantages and disadvantages.

Also the future of Cryptocurrency trading is very bright and i hope in the upcoming times Decentralized exchange will overcome their demerits and will give a tough fight to centralized exchanges!

And finally a big thanks to professor @dilchamo & @shemul21for grading my previous posts and their valuable guidance!

Thanks For Reading!
Regards
@pratikjumle29.