Crypto Academy Season 3 Beginners' course - Task 3: Bitcoin, Cryptocurrencies, Public chains.
Hello steemian,am glad to be a part of this community and participate in task 5 in beginners course,which is i will be able to be answering questions on crypto exchange.
Crypto exchange is that the platform getting used by traders in marketing(buying and selling) of cryptocurrencies or fiat and are of two types which are the centralized exchange and decentralized exchange,we will also check out their advantage and drawbacks ,and difference between crypto exchange and crypto wallet.
What's a Crypto Exchange?
A cryptocurrency exchange may be a digital platform where consumers may trade their cryptocurrencies for fiat currency or other cryptocurrencies.
A Crypto Exchange is analogous to a market where trade and exchanges can happen , only it's primarily for crypto trading and it's also a web platform. Today, there are numerous such exchanges, each with its own set of characteristics, albeit they're all crypto exchanges. Some exchanges, for instance , offer capabilities like margin trading and staking, while others don't . As a result, they each have their own set of strengths and shortcomings.
There are two kinds of cryptocurrency exchanges: centralized exchanges like Binance, Huobi, and Kraken, and decentralized exchanges like Uniswap, MDEX, and Sushiswap.
Difference between crypto wallet and exchange
| WALLET | EXCHANGES |
|---|---|
| 1. The main purpose of a wallet is to store tokens and keep them safe, but it can't be wont to trade them. | 1. Tokens are often exchanged and purchased within the exchange. |
| 2. Wallets are much more secure since they contain private keys that are only known by the owner, making them impossible to hack. | 2. Because the corporation hosting the exchange has access to your private keys, exchanges are less secure than wallets, and if the exchange is hacked, you may lose your valuables. |
| 3. Owners have complete control over their wallets (very private) | 3. The firm that owns the exchange, notably in CEX, is responsible of the exchange, not the traders (less private) |
| 4. The owners of wallets have quick access to them whenever they need . | 4. An exchange can pack up for maintenance, and every one users will need to wait until they're finished before having the ability to access it again. |
DEX (Decentralized Exchange)Advantages & Disadvantages..?
| ADVANTAGES | DISADVANTAGES |
|---|---|
| 1. Because decentralized exchanges employ blockchain technology, you've got complete anonymity and control over your account during deals. | 1. Unlike centralized exchanges, decentralized exchanges are difficult to grasp and use. To be ready to use them effectively, individuals must be quite skilled in Crypto trading. |
| 2. Using decentralized exchanges incurs few, if any, fees and commissions. | 2. Decentralized exchanges exclusively deal in cryptocurrencies and don't exchange them for paper money . |
| 3. Users have complete anonymity on decentralized exchanges, and no KYC (know your customer) is required for registration. | 3. Because there's no KYC during a decentralized exchange, if you transfer to the incorrect individual, you'll not be ready to retrieve your asset. |
| 4. Because decentralized exchanges use blockchain technology, they need a top-notch security mechanism that can't be hacked. | 5. Some centralized exchange functions, including margin trading, staking, and stop-loss orders, aren't available on decentralized exchanges. |
| 5. Decentralized exchanges eliminate the necessity for an intermediary during transactions, allowing users to deal faster and more independently. | 5. In the crypto market, decentralized exchanges aren't yet widely used. |
CEX (Centralized Exchange)Advantages & Disadvantages..?
| ADVANTAGES | DISADVANTAGES |
|---|---|
| 1. In the crypto market, centralized exchanges are well-known and well-understood. | 1. Decentralized exchanges are safer than centralized ones. In truth, CEX has been hacked within the past, leading to the loss of assets. |
| 2. KYC verifications are in situ in order that errors in transactions could also be quickly recovered, and there are samples of concealment and online fraud in centralized exchanges. | 2. Because the firms that administer centralized exchanges have complete control over them, there's less privacy, and each transaction must be approved by the corporation that also acts as an intermediary. |
| 3. The centralized exchanges have a spread of fascinating features and services, like margin trading, stop-loss orders, and even peer-to-peer trades. | 3. For trading, most centralized exchanges charge significant fees and commissions. |
| 4. Transactions and trades on centralized exchanges are alright managed and precise. | 4. Because centralized exchanges also use KYC verification, there's little or no anonymity. |
| 5. The interface of centralized exchanges is sort of simple to grasp , which makes trading tons easier. | 5. ------------- |
Have you used an Exchange before? Tell us about your experience.
I am still relatively new the planet of cryptocurrencies, my arrival at Steemit was a challenge during this challenge and thru this I had the chance to use my first exchange, it's orinoco.io , it's an exchange that i exploit to receive money fiat in my local currency which features a fairly simple and fast operation, during which I even have been ready to exchange my rewards like SBD, Steem and TRX for my local currency, it's quite reliable and that i have only been ready to sell and exchange, I hope to finish the specified steps To be ready to buy with my local currency, for the presentation of a task in the week I had the chance to make an account in poloniex.
CONCLUSION
The world of cryptocurrencies may be a fascinating world, it advances a day and with it, so do the required tools to form good use of the crypto market. Exchanges are one among those great tools, with their pros and cons, but they're undoubtedly very useful, the looks of decentralization makes these are divided into two groups, both with their importance and respective utility counting on the user's criteria.Personally, it had been an honest class on behalf of me , well explainedwrong post
Hi @yug75, Thank you for taking interest in the 5th Task of the Beginners Fixed Class. Your grades are as follows:
My Review and Suggestions:
Thank you!
CC: @steemcurator02