Crypto Academy Season 3 Beginners' course - Task 5: Dex, Cex, Popular Exchanges and Trading Cryptos by @blue10
Hi. prof. @imagen, I am delighted to start the beginner's course task 5 which covers Dex, Cex, Popular Exchanges and Trading Cryptos. Thanks for giving us much insights on it. Also prof. @@@awesononso this is a repost of my work since the other time i couldnt do my achievement task. Hoping to see your review
Explain in your own words what an Exchange is. Difference 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
A cryptocurrency exchange is a marketplace where traders can conduct business. The trading of cryptocurrencies is usually done in pairs. Different trading pairs are posted on various trading platforms and allow for cross-exchange. We can simply say It's a platform that allows investors to engage transactions online. Wire transfers and credit card payments are accepted in almost all exchanges. Some examples of exchanges are Binance, Huobi Global, Coinbase (Pro),Kraken. Exchanges can be either Decentralized or Centralised. With decentralised exchanges, trading occurs without any third party an example is the UNISWAP whereas centralised exchanges is controlled by a central body, an example is Binance.
Differences between a Wallet and an Exchange
A wallet is a storage location for tokens that you have purchased or received. With wallets you have complete control over your private keys whereas A cryptocurrency exchange is a marketplace where traders can conduct business. The trading of cryptocurrencies is usually done in pairs.
Wallets allows us store cryptocurrencies for a long time but exchanges allows users to store cryptos for a short time.
You can convert cryptos for fiats in exchanges but wallets cant be used for that purpose.
In terms of security wallets provide a higher security because of the provision of private keys, exchanges on the other hand do not do so.
Advantages of DEX
- Because of blockchain technology, DEX are more secure and transparent.
- On the DEX, transaction fees are cheap.
- When transacting on the DEX, there is no involvement of a third party.
- In the DEX, you have complete control over your account.
Disadvantages of DEX
- DEX can be tough to navigate for newcomers.
- Hacking is possible in DEX
- It mostly accepts trading with only cryptocurrencies.
Advantages of CEX
- When compared to DEX transactions, CEX transactions are faster.
- Some CEX are very user friendly and easy to use, an example is the Binance exchange.
- CEX has a large trading volume as a result of its high liquidity.
- There is transparency of work in CEX
Disadvantages of CEX
- The CEX has a higher transaction cost than the DEX.
- It is sometimes regarded as not very safe because users must provide certain important information before they can have access to the exchange.
- Once there is a hack on the system, everyone gets affected and funds are lost.
- Also users arent given their private keys which is one disadvantage of CEX.
Have you used an Exchange before? tell us about your experience.
Well, the anwer to this question i will say is YES i have every used an exchange and till now i use it. I have created accounted on Binance, poloniex, houbi-pro but the one am much familiar with so much is binance. I started using binance not very long. On thing i must commend about the use of binance is its user friendly feature which allows beginners like us to navigate freely on the platform.
First of all, i downloaded the binance app from my appstore and completed the signing up processes with my email and a password. After which i was asked to verify my account with a valid ID card either a passport or a voters ID card. After my account was verified. I did my first transaction which was coverting steem to ETH and later sending it to my P2P account to sell for fiat. One of the feature i will also like to talk about is its p2p feature which allows users to sell or buy cryptos with fiat.
Some of the reasons why i love using binance include
- Transaction fee is very low, i was charged 0.5% for trading
- It accepts more than 500 different coins, including the famous bitcoin, ethereum, litecoin, and its own BNB tokens.
Thank you for your time.
CC:
@awesononso