Hello Steemians, Welcome to week 11 of Steemit Crypto Academy. I'm happy to participate in this lesson delivered by professor @yousafharoonkhan on Decentralized and Centralised exchanges. The lesson was informative and I'm here to submit my homework task.

Write the definition of Decentralized and Centralized Exchange in your own words. (definition should cover exchanges, not system) only explain in your own words, after understanding the exchanges.

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Decentralized exchanges

When we talk about Decentralization, it simply means the absence of a third party or control bestowed upon a central body. In decentralized exchanges, every transaction is recorded on the blockchain and there's no third party in control of transactions. Similarly, in a decentralised exchange, the user is in control of their funds and transactions are recorded on the blockchain which makes decentralized exchanges very safe e.g Uniswap, JustSwap, Pancake Swap, Binance Dex, etc.

Centralized Exchange

Centralized exchanges are trading platforms that buying and selling of cryptocurrencies to users in an easy and faster way. Transactions and operations in centralized are monitored and controlled by third parties or central bodies. The exchange servers as an intermediary and control the activities of the users. Similarly, these transactions are not recorded on the blockchain and the users do not have direct access (private keys) to their funds. Performing in centralized exchanges requires users' data like KYC verification to have access to some services in the platform. Also, centralized exchanges offer high liquidity to their users and transactions are performed at a lower fee. For example Binance, Coinbase, Poloniex, Houbi, Bittrex, OKEx etc.

Explain in your own words the difference between decentralization and centralization exchanges (answer should related exchanges, not overall system (answer must be written in own words, copy paste or from other source copy will be not accepted)

Here, we are going to explore the difference between a centralised exchange and a decentralized exchange. Though these two exchanges have something unique over the other let's explore their differences.

Control

In a decentralized exchange, there's no third party or central body in control of the transactions. Control is bestowed on users and transactions are recorded on the blockchain. Whereas in a centralised exchange, the platform is in control of the operations and users do not have direct access to their funds.

Regulations

In decentralised exchanges, the users are Anonymous as no form of verification or registration is required. The platform is built on blockchain and it is very difficult to regulate the operations. Whereas in a centralized exchange, it is very easy to regulate and required a license from financial regulators.

Fees

In a decentralized exchange, fees are charges to sign a transaction which can be very low or even zero depending on the blockchain. Whereas in a centralized exchange, the platform charge fees for every in the platform. Fees in centralized exchanges are very low.

Security

Decentralized exchanges are built on blockchain which makes it very prone to hackers. Every transaction is recorded on the blockchain and cannot be tempered or changed. This guarantees the safety of users' funds. In a centralised exchange, the security of funds is not guaranteed as all the funds are stored in the exchange private key. Users do not have the private keys to their wallet and the platform can easily be hacked.

Liquidity

Decentralized suffer liquidity problem because orders need to be marched before they can be executed. But in centralised exchanges, liquidity is very high and transactions can be settled in milliseconds as there are multiple users in the platform. Similarly, the presence of market makers in centralized exchanges adds more liquidy to the platform.

Features

In decentralised exchanges, there are not enough features for users to capitalise on, unlike decentralised exchanges where multiple features like margin trading, futures trading, P2P trading, etc are provided for users. Similarly, technical indicators, candlestick charts are available to help users make trading decisions. Also, centralized exchanges offer a different mode of order executions like a market order, limit order, stop-limit order and the OCO order. These features are amazing and make users have minimised the risks associated with trading cryptocurrencies.

Transaction Speed

Due to low liquidity in decentralized exchanges, transactions are slow and can take up to a minute to settle. But in a centralized exchange, transactions are faster and can be settled in milliseconds due to the high liquidity offered in the platform.

User Interface

Decentralized exchanges are difficult to use and it's not user friendly for a beginner, but in a centralized exchange, the user interface is designed to be simple and user friendly for a beginner with little knowledge of cryptocurrency.

System performance

Decentralized exchanges are available and running 24/7 and are available of the day. Centralised exchanges sometimes experience downtime due to system upgrades, break down or schedule maintenance. Though this is done for a better user experience.

write about any 2 best centralised exchanges of 2021. why are they best in front of you? (Show screenshot of your verified profile to make verify that you are really using them, or also share any one trade that you made in the last 24 hours )

Binance

Binance is the largest cryptocurrency exchange in trading volume. I have been using Binance exchange for 3 years and the exchange is amazing in terms of features available for users and security of funds. Binance offers a wide variety of cryptocurrencies which the projects and team are carefully analysed before listing. Similarly, Binance offers a range of trading pairs which can be crypto to crypto or crypto to fits trading. Also, P2P trading is available in Binance is available and it is suitable for users in the region where cryptocurrency hasn't be legalized.

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Another amazing feature of Binance is Binance savings which enable users to stake or lend their funds to earn interest. Similarly, the Binance launch pool is another great way of making passive income in Binance by staking your funds to earn newly listed cryptocurrency.

In terms of trading fees, Binance charges a flat fee of 0.1% on spot trading which is very low compared to other cryptocurrency exchanges. Security has been a major concern in centralized exchanges, But Binance has very strong security which guarantees the protection of users' funds. The trading interface of Binance amazing and user-friendly. Trading tools like the chart pattern with different timeframes and technical indicators are made available for trading to make better trading decisions. The picture below shows the trading interface of Binance.

_{Verified Binance Account}

The picture below shows the transactions I have carried out using Binance spot trading in the last 24hours.

Poloniex Exchange

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Poloniex is another best cryptocurrency exchange launched in 2014 by Tristan D'Agosta. Poloniex is a US-based company and it is highly regulated. Poloniex has a trading volume of more than $100 million there is a variety of cryptocurrencies to be traded on the exchange. Similarly, Poloniex offers features like margin trading, futures trading and lending services to earn passive income by just staking your funds. Another amazing feature of Poloniex exchange is the trading fees. Poloniex charges of 0.125% which reduces as you increase your trading volume.

_{Verified Poloniex Account}

The picture above shows my verified account on Poloniex. Currently, my account is limited to a withdrawal of $10,000 per day which will be increased when I perform tier two verification.

Install Metamask, and share step by step screenshot,(Practical step by step )

For this assignment, I will explain in detail how to install and create an account on Metamask for Android users.

• Download Metamask from Google Playstore and click on Install.
• After installation, click Open

After you have opened the Metamask app, a page appears with 3 options. The first is to import using seed phrase if you already have an account you want to import to Metamask. The second one is to synchronize with an extension. The third one is to create a new Metamask account. In this guide, I will explain how to import a wallet to Metamask and also how to create a new wallet in Metamask.

How to import a new wallet to Metamask

Step1

• Click on import using seed phrase. This will require you to import an existing account using a seed phrase. Seed phrase serves as a security key to a wallet that can be used to access the wallet.

Note: At this stage, Metamask does not support screenshot due to security reasons. The pictures were taken from another device to show illustrations.

Step 2:

• After clicking import using seed phrase, a new interface is displayed. You will be required to enter a seed phrase saved from an already existing wallet.
• After that, create a Metamask password and click import.

Step 3:

• Accept Metamask terms and conditions by clicking I Agree
• Congratulations, you have imported a wallet to Metasmask using a seed phrase. Click Done to view your wallet.

The picture below shows the imported wallet to Metamask. Screenshots are enabled from this stage.

Creating a new Wallet on Metamask

In this guide, I will explain how to create a wallet in Metamask. This can be done using the following steps:
Step1:

• After installation of Metamask wallet, open the app and click on Create a new wallet.
• After that, a new page shows up with the 3 steps required to create a wallet. The first is to create a password on Metamask. After creating a password, click on Create password as shown below.

*Note: Screenshots at this stage is not allowed in Metamask due to security reasons. Photos we're taken with another device to aid the illustration.

Step 2:

• After that, a new page shows up to copy the seed phrase to the wallet. This seed phrase serves as a security key when you want to import your wallet when the device is lost. It is advisable to copy it out on paper and make a duplicate copy or save it in a vault. This key shouldn't be shared with anyone. Copy the seed phrase out and click Continue.
• After that, you will be required to input the seed phrase in order. It is usually 12 words.

• After that, accept Metamask wallet terms by clicking I Agree.
• Click Done. Congratulations, you have created a new wallet in Metamask.

The image below shows the Metamask wallet interface of the newly created wallet.

How to use Uniswap exchange, and Swap/buy or swap/sell any coin (practical step by step )

Uniswap is a decentralized exchange platform built-in Ethereum network. I will explain how to use Uniswap to swap coins. This illustration will be done using the Metamask wallet we just imported.
Step 1:
There are two ways we can access Uniswap to swap, buy or sell coins. This can be done by accessing Uniswap through a crypto wallet. In this case, Metamask has the browse feature which enables users to access Dapps and the web.
Similarly, you can access Uniswap from Uniswap.org which will still redirect you to a wallet to connect your wallet.

• From Metamask wallet, click on the 3 dash bar at the top left corner for a drop-down menu.
• Click on Browser. The browser is a feature in Metamask that allow users to interact with Dapps platforms directly from Metamask wallet.

Step 2:

• After clicking the Browser, you will be redirected to the browser interface. Here, users get to interact with Decentralized exchanges, Decentralized Finance and other amazing features.
• Click on the search bar and type Uniswap. Automatically, Uniswap exchange appears on the menu, click on it and you will be redirected to the Uniswap interface.

• After that, a pop-up page appears requesting to connect your Metamask wallet to Uniswap, click on Connect

The picture below shows the wallet connected successfully.

Step 3:

• After successfully connecting your wallet, it is time to swap coins. From the page, as shown below, we have two drops down arrow. One signifies the coin we are swapping From and the other signifies coin we are swappingTo. Click the arrow down and select the preferred coin.
• If the coin is not listed, you can search for it by inputting the contract address of the coin.

Step 4

• After selecting the coins for swapping, input the amount of coin you want to swap. The equivalent quantity of the other coin to be received will be displayed automatically.
• Click on Swap
• Another page appears showing the transaction detail. Click on Confirm Swap*.

Due to the high value of gas fees and the current value of Ethereum, I was unable to complete the final stage of swapping coins in Uniswap. I was requested to pay 0.006ETH ($26) to withdraw 0.00087ETH ($2.53) which is very high and unacceptable. This is one of the advantages a centralised exchange has over a decentralised exchange.

In conclusion, Decentralized exchange and centralized exchange has their pros and cons. In terms of the security of funds, Decentralised exchange is preferred because funds are stored on the blockchain and users have private keys to access their funds. But when it comes to liquidity and trading features, centralized exchanges are preferred because they provide a wide range of tools and services to make trading conducive and easy. I believe with time, most of these features will be available on decentralized exchanges because blockchain in finance aims to eliminate third parties or central bodies and bestow control on the users.

Note: All pictures used in this post are screenshots taken from my wallet and exchange account, unless stated otherwise.

Thank you professor @yousafharoonkhan for this amazing lesson.