Crypto Academy Season 3 Beginners' course - Task 5: Dex, Cex, Popular Exchanges and Trading Cryptos

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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?

Now I will share my little experience.**

What is an Exchange An exchange can be termed as a platform or place where people trade. It is more like a market place where people buy and sell goods.
An exchange in the crypto world is used to trade different cryptocurrencies by using cryptocurrencies or fiat money based on how the exchange operates. The exchange also plays the role of an agent or a middle man between the buyer and seller.

They get their own commission by facilitating trading through transaction fees. It also enables the exchange of different cryptocurrencies. Given $10 steem, for instance, can be exchanged for Bitcoin of almost equal value and vice versa.

Types of Exchange There are two types of exchanges which operate differently. They are; • Centralized exchange • Decentralized exchange Centralized Exchange A Centralized exchange is an exchange which is controlled by a single person or group of people. It operates like the conventional stock market. It also plays the role of an agent/middleman between a buyer and a seller. High charges are paid in a centralized exchange during transactions, which is the means by which the platform gets its commissions. Below are some examples of centralized exchanges; • Houbi Global • Binance • Coinbase (Pro) • Kraken • Bitstamp Decentralized Exchange A Decentralized exchange is a complex system of exchange which involves no third party in its operations. This exchange does not accept fiat currencies for cryptocurrency trading. It thereby supports peer-to-peer transactions. Below are some examples of decentralized exchanges; • Curve Finance • Uniswap (V2) • Venus • Burger Swap • Token Ion Difference between Wallet and Exchange | Wallet| Exchange | -|- Low transaction fee.| High transaction fee.| Wallets are more secured for tokens and users are fully in charge of transferring funds.| Exchanges are prone to hackers and they control transfer funds.| Users are solely responsible for security. Wallet can not be recovered if a user loses his/her private keys.|Helps in storing private keys, so user can recover his/her password in case he/she forgets or loses it.| Helps in storage and protection of cryptocurrencies for a long period of time.| Used to trade cryptocurrencies and store them for a shorter period.| _ Advantages of DEX • DEX has a low cost of transaction fee as compared to CEX • Decentralized Exchange has a high level of privacy maintenance and anonymity • DEX does not involve a third party in transacting. Thus, it is a peer-to-peer exchange. Disadvantages of DEX • DEX users lose all assets if they forget their private keys. • Fiat currencies do not accept the trading of digital currencies in DEX • DEX lacks liquidity because of low trading volume. Advantages of CEX • CEX is simple for beginners. • Because of its huge trading volume, it has a lot of liquidity. • It backs up private information of users so they can recover it from the platform. • It does not allow fraudsters to operate freely since it is monitored. Disadvantages of CEX • CEX has a high transaction fee as compared to DEX • It is prone to hackers, which affects all users when the platform is hacked. • It involves a third party when transacting, which does not create privacy between the seller and the buyer. Have you used an exchange before? Tell us about your experience. Yes, I have used an exchange before, which is the Binance exchange. I started using it this year and the first crypto I started with was Etherium. I was able to do this with the help of a friend who had been transacting with cryptocurrencies. He introduced me to the Binance exchange, where I made my first exchange. The experience I had with Binance was great, even though I wish to expire other exchanges as time goes on. The transaction I did run very fast and smoothly, I am looking forward to learning more about cryptocurrencies.

Thanks for reading my post and remain blessed..🙏