Crypto Academy Season 4 Beginners' course - Homework Post for Task 7: Dex, Cex, Popular Exchanges and Trading Cryptos || by professor @imagen By @hajiataiba
INTRODUCTION
Hello steemians, I am very happy to write my homework post for this week and also using this opportunity to say a very big thank you to prof @imagen for this wonderful lecture this week.
Picture edited by myself
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.
Explain in your own words what an Exchange
Exchange is a digital currency which gives users the opportunity to trade assets Example like cryptocurrency or digital cryptocurrency. crypto Exchange is the form of buying and selling cryptocurrency or crypto assets. example of cryptocurrencies are as follows Bitcoin, Ethereum etc.
there are so many ways of exchanging goods and services. In this case, a buyer buys from a seller and the valuable asset of the seller is been exchanged to the buyer and both of the seller and the buyer are for the benefit.
Moreover, exchange ( buying and selling of crypto assets ) happens online.
Exchange of crypto assets is so simple in a sense that, there is a wallet we’re traders keep their crypto assets there for future uses.
Exchange of crypto assets can be done anytime, anywhere so far as you an active wallet with crypto assets in it and transactions is done in a short period of time.
Types of exchange.
There are two main types of exchange which are;
decentralized exchange
centralized exchange
Decentralized Exchange: In a decentralized exchange, users are given the rights to manage their accounts and funds, they also get the right to choose who to exchange a crypto asset with, also choose the time period at which is exchange can be done and where the exchange process to take place. The decentralized exchange usually comes with a little chargers and it has no moderator or administrators. Examples of a decentralized exchange are as follows; Just swap, Airswap, Uniswap etc.
centralized exchange: in this situation, Users do not have full control over their accounts. Moreover, all exchange that are happening in this aspect are control my the administration or the moderators. And this are always controlled by a central administration. In the centralized exchange, there is always a third party who checks all the transactions that happening in the system and also, the chargers involve in this aspect are high. Examples of a centralized exchange are as follows; coin base, poloniex, binance etc
Differences between an exchange and a wallet
An Exchange is a digital currency which gives users the opportunity to trade assets. Users have all the right to choose who and when to exchange a crypto asset.
But a wallet is just like a back where users can save their crypto assets. And they can have them when ever they are in need of them.
This was just by the way. Now, I will like to talk about the difference between an exchange and a wallet.
| Exchange | Wallet |
|---|---|
| Exchange is a digital currency which gives users the opportunity to trade assets. Users have all the right to choose who and when to exchange a crypto asset. | wallet is just like a back where users can save their crypto assets. And they can have them when ever they are in need of them. |
| Users does not have full control over their private key | users Have full control over their private key |
| Users are offered selling and buying | Does not offering selling and buying. |
| Less Decentralized | more Decentralized |
| Less secure | very secure |
Advantages and Disadvantages of Decentralized Exchange (DEX)
Advantages of DEX
In decentralized exchange, there is no way or means everyone can assess the exchange.
in Decentralized exchange, the charges that is involved is less when an exchange is done or make my users.
Everyone who happens to be on this system has all rights or freedom to choose who and when to do an exchange. That’s to exchange his or her crypto assets to the person he or she wants.
Disadvantages of DEX
- in some cases, Decentralized systems are very difficult for users to work with and this makes users not to feel very comfortable with using them. Moreover, it involved high skilled personnel one needs before he or she can work with in other to make transactions easy.
- In Decentralized systems, once’s a user lost his or her keys to any of his accounts be it a private key or his/ her wallet key, that ends it. He or she can not assess them again. And the crypto assets he/ she has in the wallet, he/ she can not get it again. The only way he/she can do is to create a new account and start all over again.
- In Decentralized system, it is sometimes very easy for a user to get robbed because, during an exchange of crypto assets, the buyer and the seller might not know each other and one can just get rob during the process of the exchange of the crypto assets.
Advantages and Disadvantages of CentralizedExchange (CEX)
ADVANTAGE OF CEX
- in centralized exchange, once a user lost his Or her keys, there is always a way he or she can follow to re gained his or her keys that he or she lost. He or she will go to the authority and tell them how he or she mistakenly and lost his or her keys and they will help him or her to re gained the keys.
- In centralized exchange, once a user get lost in the process of making a transaction, there is always a third party who is there to help the user so that his or transaction will be done successfully.
- In centralized exchange, users find it very easy to work it and also find it very easy to understand and also find it very easy when dealing with transactions or exchange with the centralised system.
Disadvantages of CEX
- In centralized exchange, the charges that are involved when a transaction is done my a user is high.
- there is no privacy in centralized exchange in a sense that, before a user do anything, there is always a third party who is involved. If a user is to do Transactions, this third party will choose the way he or she wants it to be like. And also, there is no freedom in the centralised exchange.
- In centralized exchange, it is time wasting as compared to Decentralized exchange. This is in a sense that, before a transaction is done by a user, there is always a channel he or she must follow but as compared to Decentralized exchange, it does not works like that.
Have you used an Exchange before? tell us about your experience.
The answer is yes. I have used an exchange before and that is exchange is called Binance
I never new what exchange was or what binance was till when I join the steemit platform. And I also got to know that exchange in crypto world is an exchange of crypto assets which took place online.
And the exchange took place between buyers and sellers.
With binance, I also learn how do exchange of crypto assets. Example if you are to do an exchange, this is how you should go by it;
If you have an SBD in your steemit wallet, you first of all change it to steem and when that is done successfully, you them move it to your binance exchange. By so doing, you will first enter the name of your binance account and also enter the among of steem you want to transfer to your binance and then enter your memo key your binance account.
So when that process is done successfully, then you can see your steem in your binance exchange.
I was also thought how to use the P2P (peer to peer). And also how to exchange a different crypto asset to another crypto asset example like USDT to Bitcoin.
CONCLUSION
An Exchange is a digital currency which gives users the opportunity to trade assets Example like cryptocurrency or digital cryptocurrency. crypto Exchange is the form of buying and selling cryptocurrency or crypto assets.
Moreover, a wallet is just like a back where users can save their crypto assets. And they can have them when ever they are in need of them.
I really learned a lot in your homework task professor.
I will like to use this opportunity to thank the professor @imagen for his wonderful lecture this week. I really learned a lot from his lesson and I hope my homework task will be reviewed thank you!!!!