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 EXHANGE

An exchange is like a market place in which people go in to trade their assets and crypto currencies. This crypto currencies can either be traded for other crypto currencies or fiat (fiat money simple means money in cash. Someone can trade their BTC to real cash. To either sell a crypto currency for real more or buy with real money is termed as fiat). money, depending on the interest of the trader.

TYPES OF EXCHANGE

There are two main types of exchange in the exchanges. The market prizes of these crypto currencies are shown in the changes that shows how much a crypto currrency is worth at a moment depending on demand and supply. This exhange platforms makes it easy for people to be able to convert from one currency to the other, which helps them to be able to make identify the prize of every currency. There are two main types of trade in the exchange markets which are the SELL option and BUY option. Which I will be explaining below.

BUY

Before we start I am going to be using Binance as the cryptocurrency exchange, to show for clarity and illustrations in other to make my work clear and sound. So the sell option in the crypto exchange market allows you to sell any asset of your choice to other crypto currencies or fiat money. When it comes to the sell option, you can make it successful by following these steps

• Go to the trade button, in the down middle of the screen and select trade. You will be directed to a page like this. Where you will see the buy and sell option.
  

• Go to buy, located at the top in green color. Leave all option just the way they are in the below picture and put in the amount of bitcoin you want to exchange for steem. Over here I am exchanging between steem and Bitcoin. You can also change the currency you want at the top written as STEEM/BTC. You can also see the available balance in my BTC above the “buy steem”, and right above it you can also decide to put in 25%, 50%, 75% or 100% of the total Bitcoin you have.
  

• You can now complete the exchange by pressing on buy steem. After you press it there will be an order awaiting to be transferred. You just have to wait for a couple minutes before it will reflect. You can see “open orders” at the button left of the screen. You can also go in there to cancel it if in case you have changed your mind.
  

SELL

This option also allows you to exchange your cryptocurrency to another currency. But in this way I’m going to be the reverse of what we did earlier with the BUY option. It is almost the same steps we took with the BUY option. I will give a few steps tho

• now you will have to move to the other side of the screen which is the sell option and it is colored with grey . After you switch it from buy to sell it will become red. Just like the below picture
  

• enter the amount of steem you want to exchange for Bitcoin and press the “sell steem” buttom. And order will be placed in a few minutes it will reflect on the Bitcoin balance.

Difference between wallet and exchange.

WALLET

A wallet is like is a storage place for the crypto currencies. They are able to store the currencies for the owner for as long as the person does not sell them or exchange them for another currency. The security strength of crypto wallets are so strong. It requires a whole lot of process to be able to set up an account. All the necessary documents are asked to ensure that it is the real owner of the wallet.
This is done to ensure that criminal and scammers are not able to hack into other people’s account. Below is a picture of how wallet looks like in binance
The wallet is located at the top left side of the screen in the wallet column of binanace. The below picture shows the total amount of money my total crypto currencies are worth.

Below is a list of crypto currencies. Amongs them, you can see I only have money in steem which is ($7.22)and bitcoin($0.83). So in this wallet I can get to know how much my steem or bitcoin is worth at anytime since one cannot tell the exact amount of a crypto currency because it fluctuates. Meaning it falls and rise.
In this case I can also decide to transfer my money into the other currencies. For example I can transfer from steem to USDT.
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EXCHANGE

An exchange is the changing of cryptocurrencies from one cryptocurrency to another cryptocurrency on the same crypto exchange using an exchange platform. There can also be transactions between one crypto exchange to another. For example from binance to poloniex. There are many exchange platforms like Poloniex, binance and bittrex. Below is a picture of binance and poloniex applications

TYPES OF EXCHANGES

There are two main types of exchanges which are centralized exchanges and decentralized exchanges.

CENTRALIZED EXCHANGES

These are companies that act as a third party between a buyer and a seller. These are exchanges that are located at the top management. They are exchanges that are been managed by the the company that operates it. The password and keys of every account is been kept by the exchange management. The keys of the users are been controlled by the authorities of the exchange team. Some of these exchanges are:

• Binance
• kraken
• Bittrex
• Poloniex
• Bitfinex
  
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DECENTRALIZED EXCHANGES

These type of exchanges allow users to use peer to peer transactions and trading without the use of a third party company. Theseare exchanges that do not only keep the informations of their users but also share them with every user. Some of these exchanges are:

• Bancor Protocol
• Airswap
• Etherdelta
• Uniswap
• Justswap
• Kyber network
  
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Advantages and disadvantages of dex and cex

ADVANTAGES OF CENTRALIZED EXCHANGES

• Liquididty: liquidity of centralized exchanges are higher than decentralized exchanges . The assets in this exchange can be turned into real money at any time without causing any major problems.

• Speed: the rate of speed in trading and transactions in centralized exchanges is very high. It does not require too much for the transaction to reflect. Transactions do not take longer time in other for the other side of the party to receive .

• Reliable: centralized exchanges offer the best reliable security when it comes to trading and security. One can rest assure that all his or her assets are in good hands. This feather gives users more reason to trade and transact on it.

• User friendly: Centralized exchanges provide beginners with a friendly way of investing and and trading in cryptocurrencies. Users of this exchanges can log into their account at any time to make transactions and to access their balance.

DISADVANTAGES OF CENTRALIZED EXCHANGES

• High transaction fee: Centralized exchanges normally charge high transaction fees from their users which makes a little bit uncomfortable when trading in large amounts

• Hacking risk: There is always a risk in the centralized exchanges due to the high amount of money and asset they have in hold. Which makes them a target to scammers and thief’s

• Custody: All your assets are in total custody of the exchange. You don’t really control your account like you own it. It is more like sharing your account with someone.
  
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ADVANTAGES OF DECENTRALIZED EXCHANGE

• Better security: Users of decentralized exchanges do not need to tranfer their assets to a third party to hold it for them. They are in a good possition to be able to keep their assets by them selfs.

• Anonymity: Users of decentralized exchange do not need to fill out forms like KYC ( know your customer) which contain their private life hence there will be more privacy.

• trustworthy: This means that users funds, assets and personal data are safe. This brings good name to the exchange and increase in the number of users.

• Better precaution: Better precautions are taken in place to ensure that no country goes across the line of breaking rules.

DISADVANTAGES OF DECENTRALIZED EXCHANGE

• No recovery ability: Unlike centralized exchange which are run by companies and employees. In the case of decentralized exchange there is no keys recovery. When you forget your password or misplace it. Then that will be the end and your assets will go to waste.

• Limited speed: The trading speed of decentralized exchange is limited which means that tradings and transactions are mostly slow. The processing speed depends on the networks miners.

• Low liquidity: Most traders prefer the centralized exchange which has a higher liquidity pool, currency pairs and choice of instruments. It is obvious that centralized exchanges normally have higher liquidity than decentralized.

• Limited trading options: most decentralized exchanges tend to focus only on buy and sell order leaving out other trading options like margin trading, lending and stop losses.

MY EXPERIENCE IN BINANCE

Yes I have used an exchange before and that is binance. At first I did not know anything about it. All I saw was so many different numbers and currency signs. I had it in my head that it had to deal with money but I couldn’t interpret any of the numbers. I had been on binanace application for like a week and I still didn’t know how to use it.

I had money in my steem that I wanted to cash out but I didn’t know how to go about it. I made it to my self that whether rain or shine I must know how it works. After time to time I started realizing some few aspects of it and that was why I read lizard it is really true when they say practice makes perfect. I was on the application every now and then. I went to google to search about things I didn’t understand and I went to YouTube as well and a whole lot of research.

Thankfully I was able to understand it more. And I wish to keep discovering more about cryptocurrencies and steem.

Thank you