An exchange or digital currency exchange ( DCE) is a platform where we can buy or sell cryptocurrencies. We can trade them using various electronic monetary units, the fiat currencies like US Dollars, Euros, Pounds, yen, and yuan, or other digital assets (i.e, we can swap a cryptocurrency for another cryptocurrency).

We can also define Exchanges as platforms which match buyers with sellers. Just like a traditional stock exchange, the traders using a particular exchange can decide to buy and sell cryptocurrencies by inputting a market order or by setting a limit order.

Source

DIFFERENCE BETWEEN AN EXCHANGE AND A WALLET.

An exchange is a place or platform where you can buy or sell cryptocurrencies, you can also convert your fiat currency into a cryptocurrency via this kind of platforms. You can also send the digital asset that you have purchased into your wallet through an exchange.

While a wallet is a place for storage of a cryptocurrency. Here, you can decide to save your cryptocurrency for as long as you want to. A cryptocurrency wallet ensures the security of your digital assets, it allows you to access them and it also stores them on a long term.

A wallet is like a conventional Bank where you save your money, you can keep your money there as long as you wish, while an exchange is like a market where you put your money into use.

More differences;

• Placement of orders: In an exchange, you can place an order or buy cryptocurrency directly, but you cannot do this with a wallet. You need to link it win your account in an exchange.
• Address: In a wallet, there is an address which people will use to transfer cryptocurrencies to that wallet. But there is no such thing in an exchange.

ADVANTAGES OF A CENTRALIZED EXCHANGE.

• Speed: Transactions with a Centralized exchange are always fast and it contribute to a better user experiences and it also enable complex trade types.

• Volume: Centralized Exchanges are always having high trading volumes. As a matter of fact, Centralized exchanges are responsible for the large majority of trading volume.

• Liquidity: The liquidity of cryptocurrencies in a centralized Exchange is always high.

DISADVANTAGES

• Control: When you use a Centralized exchange, you are also entrusting them with your private keys, this means that you do not have full and absolute control of your own money.

• Security: Because the centralized holds a large amount of assets, they are always a prime target for bad actors. In recent times, the most notorious exchange hacks have been aimed at centralized exchanges.

• Manipulation: In several occasions, some centralized exchanges have been accused of manipulating their no-transparency nature and partaking in insider trading, fake volume, and manipulation of prices.

ADVANTAGES OF A DECENTRALIZED EXCHANGE.

• Control: Traders using a Decentralized Exchange does not need to relinquish control of their private keys to perform any transaction. The transactions are done on a peer-to-peer manner and they have absolute control over their activities.

• Security: Most of the decentralized exchanges deploy some form of distributed hosting, this is always minimizing the risk of infiltration and attacks by cyber criminals.

• Listing Diversity: At the moment, there are many cryptocurrencies with many alt coins that are only accessible via decentralized exchanges.

DISADVANTAGES

• Fraudulent transactions: Since it it has been Decentralized and transactions are done in a peer-to-peer manner, then some people can use it to do fraudulent transactions or pay for fraudulent activities.

• Slow transactions: In a Decentralized Exchange, it will take you a lot of time before you can navigate from where you place your order to where you can modify it or cancel it.

• High fees: The process of completely placing an order in a Decentralized Exchange is always incurring high network fees.

MY EXPERIENCE WIH AN EXCHANGE.

I have made use of some Exchanges before, but the one I like using most is the Binance exchange. They have some exiting features like the margin trading, the BNB token, the futures market and many more.

It was very easy for me to create an account with Binance exchange, but it was very hard for me to complete my verification. This is one process that can make you forget about using Binance because it is very hectic for people who are not in areas with a good network coverage.

The interface in Binance is very friendly to the users, it is also very easy for you to trade with Binance. They also have a lot of indicators in their charts. And I must say that it is very suitable for the newbies.