INTRODUCTION

Virtually every item that is considered an asset is exchangeable. This implies that, from time to time, the owners might want to give them in exchange for something else, usually another asset or a currency. At such times, these owners will definitely need a place to do the exchange.

For crypto assets, these exchanges are done on online platforms called crypto exchanges. These platforms have different structures which can make them either centralized or decentralized. These different structures have varying features, some of which gives one structure an advantage over the other.

CENTRALIZED VS DECENTRALIZED EXCHANGES

Q.1. Definition of Centralized and Decentralized exchanges

CENTRALIZED EXCHANGES

Centralized crypto exchanges are crypto assets exchange platforms that are both owned and run/controlled by a single entity and uses order books to carry out exchanging. This single entity set rules on the exchange platform which every user must abide by in order to use the exchange platform.

They also keep the private keys and assets of their users and grant them access to these via easy to remember passwords. This single entity provides a support system that help users resolve some of their challenges while using the platform.

DECENTRALIZED EXCHANGES

Decentralized crypto exchanges are crypto assets exchanges that are not run or controlled by any single entity. No one sets rules on these exchanges as no one is in charge. They are purely products of computer programs like AMMs (Automated Market Makers) which enables exchanging on these platforms.

In these exchanges, users are totally in charge of of what they do. There are no rules to follow.

Q.2. Differences between centralized and decentralized exchanges

DIFFERENCES

CENTRALIZED	DECENTRALIZED
Controlling power is held by a single entity	Controlling power is shared away from a single entity
Uses the order book model to carry out exchanging	Uses Automated Market Makers to carry out exchanging
Involves the use of custodial wallets	Involves the uses of non-custodial wallets
Has high trade volumes	Has relatively low trade volumes
Has abundant/sufficient liquidity	Has relatively low liquidity
Requires KYC(Know Your Customer)	No KYC
Has more trade pairs	Has less trade pairs
Single point of failure due to all assets held in one place	No single point of failure as assets are held by users
Relatively easy to use with available support	Complex to use, not easy for beginners who have to be careful with their use of their assets
Central entity acts as intermediary	No intermediary
Trading fees due to the services of the intermediary	No trading fees due to no intermediary

EXAMPLES OF CENTRALIZED EXCHANGES

Q.3. Write about any 2 best crypto exchanges of 2021

BINANCE

Binance is the world's leading crypto exchange by trade volume according to coinmarketcap.

Source

Binance large trade volume indicates that it is used on a daily basis by a large number of crypto traders on a daily basis. This is easy to decode as the platform has a user friendly user interface that makes trading easy for even beginners.

Here's my account on Binance

From the screenshot above, you can see the numerous features Binance offers. There's a referral program, a launchpad, p2p, etc.

There is also an alert feature for traders who want to know when the prices of a certain crypto asset reaches a certain price. To use this feature, a user simply clicks on the trade pair they are interested in (eg. BTC/BUSD) and below, click on the alert icon

Then they set what they want to be alerted about and how often they want to be alerted.

Once their conditions are met, Binance sends a notification alert informing the user that the price of that particular trade pair have surpassed their conditions.

---

Proof of my account on Binance

---

I did a quick trade with the BTC/USDT pair this morning. Details below.

---

Why binance is one of the best 2 crypto exchanges

---

• Liquidity: Binance has high liquidity and this means that orders are quickly fulfilled on the platform.

• Trade volume: Binance has the highest trade volume among crypto exchanges. This tells that lots of traders trust this platform. Also, this helps in fulfilling orders.

• Trade pairs: The most important aspect of centralized exchanging is the trade pairs available. If a trader doesn't find their desired trade pair, they go away. Binance provides lots of trade pairs for traders to trade/exchange.

• Best coins listed: You can hardly find any trending or famous coin that's not on binance. It lists the best of coins for trade.

• Features: Binance have some of the best features like launchpad, p2p and the very helpful alert feature.

HUOBI GLOBAL

As far as crypto exchanging is concerned, Huobi Global is second only to Binance. According to coinmarketcap, Huobi Global is the second best crypto exchange by trade volume.

High trade volumes means a lot of people are exchanging on the platform and this is because they are trust it and/or derive some benefits which some other exchange may not have.

Here's my account on Huobi Global

One of my favorite feature on this platform is the floating window. It helps me to monitor prices no matter what I'm doing with my smartphone.

To set this, simply click on the avatar by the top left corner of the homepage. Then click on general settings.

On the next page, click on floating window

Then you have to set it up. Toggle it on or of with the display toggle (circled yellow). The purple arrow shows where you can click to add trade pairs. The red arrow shows where you can click to remove trade pairs

Once you are done, your floating window is ready to be used. I can even monitor prices while creating posts on steemit.

Huobi also has other features, like the reminder feature which is similar to Binance alert feature. To set this up, simply select any trade pair eg. ETH/USDT. Below the candlestick chart is a bell icon. It's colored white if you have no active reminders. Click on it to set a reminder.

You only need to input the price you are concerned about. If it's lower than the current price, it's automatically an 'upto' reminder.

If the price you are inputting is higher than the current price, it's automatically a 'down to' reminder.

I set an 'upto' reminder for ETH/USDT @ 2590. When the price rose to that, Huobi Global sent me a push notification.

---

Proof of my account on Huobi Global

---

I deposited 1.180 STEEM to my Huobi Global account this morning.

---

Why Huobi Global is one of the best 2 crypto exchanges

---

• Liquidity: Huobi Global boasts abundant liquidity on their platform. This is evident by the large trade volumes they record on daily basis. This enables exchange orders to be filled quickly.

• Trade volume: Second only to Binance, Huobi Global has a very large trade volume, signifying that lots of crypto traders around the world trusts and uses this platform.

• Trade pairs: For trading crypto to crypto, I prefer Huobi Global to Binance sometimes, especially because of the STEEM/USDT pair which Binance doesn't have. Huobi Global has lots of trading pairs available for trading on their exchange platform.

• Listed coins: You'll hardly find a trending or famous coin that is not listed on Houbi Global. The platform also list lots of other investment worthy coins to provide variety for traders. That said, you may not find BNB (Binance coin) on Huobi Global.

• Features: Huobi Global's reminder feature is easier to use than Binance's alert feature. Huobi Global also provides a floating window feature that helps the trader to constantly watch the prices as they fluctuate. Binance's p2p is superior though.

USING DECENTRALIZED EXCHANGES

Decentralized exchanges can not be in custody of users' funds. Thus, users will need a non-custodial wallet to use a decentralized exchange. One example of a non-custodial wallet which can be used to exchange crypto assets on decentralized exchanges is Metamask.

Q.4. Install Metamask and share step by step screenshot

METAMASK

Metamask is a non-custodial wallet and also a web 3.0. It can be used to access decentralized exchanges. It can be downloaded and installed from Google Play Store. This is how to install it on Google Play Store

Go to the search bar on Google Play Store and search for 'metamask'

Click on the suggestion circled in green

Click on install

After the installation, click on open to get started

You've successfully installed and opened metamask on your Android phone. Now you have to set it up. Do this by clicking on get started after you have just opened your browser

After this page, metamask doesn't support screenshot till you're done setting up your account. Not to worry though, there is nothing much to do.

There are three options

• Import with seed phrase

• Sync with metamask extension

• Create new wallet

Creating new wallet is the easiest. You only have to input your desired password and confirm it. You can skip the seed phrase stuff or do it. It's up to you. It is however, advised that you do it.

Then your metamask is set and ready to use.

Now you have a non-custodial web 3.0 wallet well set up, it's time to use a decentralized exchange. Our choice? Uniswap.

Q.5. How to use Uniswap exchange, and Swap/buy or swap/sell any coin

UNISWAP

On mobile, here's an easy explanation on how to use uniswap via metamask.

• From your metamask homepage (the last screenshot), click on decentralized exchanges.

• Scroll down till you find uniswap, then click on it.

• You find a page from where you can swap coins.

*Select the coin you want to swap from and the one you want to swap to, then input the amount you want to swap.

I have insufficient balance so I may not be able to swap. However, with sufficient balance, the button indicating insufficient balance is activated. Just click on it and your swap is completed.

USING DECENTRALIZED EXCHANGES

Centralized and decentralized crypto exchanges are the two types of crypto exchanges we have. While they both have their advantages and disadvantages, the both have areas were they are best suited. Generally, centralized exchanges are easy to use but decentralized exchanges are not, though with decentralized exchanges, the users have custody of their funds.

Centralized exchanges have inbuilt wallets as they keep custody of users funds but to use decentralized exchanges, the user must have a non-custodial web 3.0 wallet.

Thanks for reading.

Cc:
@yousafharoonkhan