Explain in your own words what an exchange.
Exchange: An exchange can be explained as a monetary market joint,Where traders or investors usually meet to trade on an assests.In an exchange usually when traders or investors connect they can either purchase or sell or even swap cryptocurrencies,So in the exchange it is used in operating so many things.An exchange can also be defined as a market place where investors and traders can connect to make some trading on a certain assest in the market,In other to make some profits.Also when it come to the exchange all the activities that goes on is very clear to both the investors or traders and always the exchange display the new exchange charge on market,In other for investors to be aware of the new exchange charge on market and this is going to make the investor to know the amount of money to be invested in that asset at the moment of trading,And also going to make the traders to know the actual price to sell their assest in other not to lose but make profit,The exchange rate is usally the new price on market at the shortest time in market,Also we have two types of exchange in the crypto world.That’s is the centralized and decentralized exchange.
This is also a type of exchange where all user are having a fully control over their assest,There is no mediators or third parties when users want to run transactions,This type of exchange give the user the fully control to run transactions and all other activities at their own time without and mediators,I personally prefer this type of exchange than the centralized exchange and also all users are always found making transactions on the smart contract which is very fast and simple.Examples of this type of exchange includes Barterdex.
This is also a type of exchange where users do not have a fully control over their assest in account,It always required third parties whenever users want to run transactions.In the centralized exchange all users cannot run any activities without the approval of the third parties.In this type of exchange the third parties always check details of all transactions to avoid invalid or scam transactions to save their users in the plafform from being a victim. Examples of this type of exchange includes Coinbase, GDAX and Kraken.
|It is place where users have been storing their assests||it is a place where users have been using in purchasing or selling or trading of cryptocurrency|
|When it comes to the wallet users are having a fully control over their assests||When it comes to the exchange users are not having a fully control over their assests|
|When it comes to wallet it more protected since users are having a fully control of their assests and keys||When it comes to exchange it less protected as compared to the walket,since users do have a fully control of their assests and keys|
|The wallet cannot be used in trading||Exchange can be used in trading of cryptocurrency as compared to the wallet.|
|The wallet is purposely used for receiving and storing cryptocurrency from the exchange||The exchange is purposely used in transferring all cryptocurrency to our wallet to store them|
Advantages of Centralized Exchanges.
In the centralized exchange it helps all the newbies and amateur users to operate very easily without any difficulties.
In the centralized exchange it assist the fiat,That is users are able to swap their cryptocurrency to another cryptocurrency in a short time.
In the centralized exchange it has been specially built to have a lot of displays when we talk about my binance wallet it has displays like spot and margin trading which is really helping users to start making use of it often.
In the centralized exchange all transactions is very quick and compliant.
In the centralized exchange once the users private key is misplaced it can also be retrieve and get your account back by using the same steps you used in setting your account or wallet.
Disdvantages of Centralized Exchanges.
In the centralized exchange when users try to swap cryptocurrency it is very expensive when compared to the decentralized exchange.
In the centralized exchange safety is very less since users do not hold or have fully control of their keys.
In the centralized exchange a lot of investors or trader are in there,This makes it very exposed to fraudsters when compared to the decentralized exchange.
In the centralized exchange there is no isolation,Since when a user want to make validation it requires all his or her personal details before you are verified.
Advantages of Decentralized Exchanges.
In the decentralized exchange there is a very high rate of private as compared to the centralized exchange,Since users are not strictly required to validate their personal details.
In the decentralized exchange users are having a fully control over their asssts and keys,This also helps to make transactions very fast and simple because it do not need the approval of mediators or third parties and it also protected from all hackers because users are only having access to their own keys.
In the decentralized exchange all users are able to utilize any time without any limitations.
In the decentralized exchange transaction fees is very less compared to the centralized exchange,Since the decentralized exchange do not need third parties in transactions process it makes fees very less and also make users make transactions anytime.
Disdvantages of Decentralized Exchanges.
In the decentralized exchange once a user misplaced his or her keys,Their account can’t be open again without their keys and their keys can’t also be recovered back.
In the decentralized exchange newbies are not recommended in utilizing this type of exchange,It is also recommended for people with more knowledge about this exchange to utilize, In other to avoid difficult or fall victim to fraudsters or hackers.
In the decentralized exchange when users are having difficulties it is very hard to withdraw the attention of experts to see to your problems,It is always assumed that users solve their own problem when having difficulties in the exchange.
In the decentralized exchange it does not assist the fiat currency to purchase cryptocurrency,So this make a lot of people to be utilizing the centralized exchange.
Personally I have utilized many types of exchange such as the binance,Tron link wallet and justswap.But since i started to encounter the binance exchange am very comfortable with it and now that is what I have been using often,Also in the steemit community you can also send steem to your binance wallet to make some trading,swap or store your cryptocurrency.In the binance wallet users can also deposit fiat currency as start to trade or save,This exchange is also having a lot of displays such as margin trade,spot trading and more which you can used any in trading to earn enough profit and all transactions is very fast and simple.It also contains all the types of cryptocurrencies on market,You can also purchase any of it.