Dex, Cex, Popular Exchanges and Trading Cryptos- Steemit Crypto Academy Season 4 - Homework Post for Task 7
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.
What is an Exchange ?
An Exchange is a platform which helps users to Buy & Sell digital assets like Cryptocurrencies and Fiat money.
With the development of cryptocurrencies, there are lot of new Cryptocurrency exchanges. So now users can easily chooses preferred exchange platform. But every platform is not supporting every cryptocurrency. So user have to consider about the exchange platform which is going to use and have to consider about fees that are charging.
There are mainly 2 types of exchanges available,
Centralized Exchange (CEX)
Eg:
-Binance
-FTX
-Bitstamp
-KrakenDecentralized Exchange (DEX)
Eg:
-Uniswap
-MDEX
-Quickswap
Binance is the most popular Cryptocurrency exchange platform now.
What is differences between a Wallet and an Exchange ?
| Wallet | Exchange |
|---|---|
| Can Store Cryptocurrency | Used for trading Cryptocurrency |
| Comparatively More Secure | Comparatively Less Secure |
| Owner can control his total assets himself | Exchange platform control assets |
| Can use Only Cryptocurrency | Can use both Cryptocurrency and Fiat money |
| All wallets are Centralized | Exchanges have both CEX and DEX system |
| available as Both online and Offline | Only available as ONLINE |
Advantages and Disadvantages of CEX
Advantages of Centralized Exchange (CEX)
- High transaction Speed
- User friendly
- Very Reliable
- Security of Trading funds are high
- Have High trading Volume
- Suitable for buying and selling cryptocurrency
- Can deposit Fiat by using Credit or Debit Card
Disadvantages of Centralized Exchange (CEX)
- Risk of hacking funds
- User doesn't have 100% full control of their funds
- Transaction fees are high
- Since one single server is controlling the whole platform, if the server breakdown it will affect whole system
Advantages and Disadvantages of DEX
Advantages of Decentralized Exchange (DEX)
- User have fully control in their funds
- Comparatively High secure than CEX
- 3rd Parties cannot involve in transactions
- Transaction fees are low
- Hacking risk is low
Disadvantages of Decentralized Exchange (DEX)
- Once transaction done no way to recovery.
- Cannot do Fiat payments
- Low scalability
- If user loose their keys, no way to recover and they will loose their funds too
- Trading features are limited
My experience using Exchange
My experience on Cryptocurrency exchange are no very much. I have only used Faucetpay, Binance, TronLink Wallet & Poloniex.
Transactions on Poloniex
Withdrawals done in Faucetpay
Deposits done to Faucetpay
- Currency swap done in Faucetpay
- Withdrawals done in Tranlink wallet
- Transactions done in Binance ( Confirmation for P2P transaction)
I hope you all learn more about "DEX, CEX, Popular Exchanges and Trading Cryptocurrencies" from this post.
Thank you
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