Cryptoacademy Homework Post for Crypto-Prof@yousafharoonkhan on Decentralized and Centralized Exchanges, how to use Uniswap, best crypto-currency exchanges of 2021 written by @chinma


6.png

Answer to Question 1

A centralized exchange is an exchange between two trading partners and a third party who acts as a middleman between the trading partners i.e the buyer and the seller. He handles the assets deposited by the parties involved in the trade.

In a centralized exchange, trades are only executed when the middleman permits the trade to proceed. Thus a trade can’t be permitted without the consent of the middleman.

The centralized exchange functions like our normal traditional banks. The banks are the middle men WHILE

A decentralized exchange is an open trade exchange between the buyer and seller of digital assets without the supervision of a third party.
It’s called decentralized exchange because everyone has the right to open a trade without any restriction or permission from a third party.

One of the characteristics of this type of trade is its covert nature. It allows the trader to trade anonymously, so his wealth or portfolio is not under the eyes of anyone. He is the only one that knows the worth of his asset portfolio.

Answer to Question 2

The difference between Decentralized and Centralized exchanges include:

✓ Ease of opening an account
Centralized Exchange- The process of opening an account on a centralized exchange is tedious. You are required to bring personal and confidential documents (KYC), while
Decentralized Exchange- The process of opening an account on a decentralized exchange is smooth and easy. Only your public address is needed.

✓ Government censorship and regulation
Centralized Exchange- Since credentials are submitted when creating an account, transaction activities are open and are monitored by the middlemen which operate under the jurisdiction of the government. There is censorship and external control by the government upon traders, WHILE
Decentralized Exchange- This exchange is covert. Only you know the trades initiated and your portfolio size. Middleman and the government have no direct control and censorship on trades initiated by the traders.

✓ Security
Centralized Exchange- The access keys and funds of traders are managed by the middleman. This is a threat because it is prone to attacks by hackers. The reason being that the centralized exchange has a single server that manages the database of the platform. It could be easily targeted and the assets of customers could be lost, WHILE

Decentralized Exchange- It’s far safer than the centralized exchange, in this type of exchange, the user is responsible for his funds and keys to his wallet. Also, it works on several nodes using block-chain technology, which simply means everyone using it acts as a node. This makes it very difficult to be hacked.

✓ Privacy
Centralized Exchange- There isn't privacy in the centralized exchange, these exchange bodies know you. They have your information, they have the keys to your wallet, they know your worth.
Decentralize Exchange- Trading on a decentralized exchange is very cool. Only you know what is in your wallet and how your trades went. This is possible because, upon registration, sensitive data wasn’t given when creating an account.

✓ Network Downtime
Centralized Exchange- This is a major problem with centralize exchange. This could occur because of the use of a single server for its operation. In case of an attack, breakdown, or maintenance, there is a possibility of downtime. A downtime could result in losses of ongoing transactions etc.
Decentralize Exchange- The possibility of having a network downtime is zero. This is because the decentralized exchange has several nodes which act as servers. Even if a node or two is attacked or breaks down, other nodes will augment and still work effectively till the nodes are fixed.

✓ Transaction fees
Centralized Exchange- There are exorbitant transaction fees in a centralized exchange. This makes it difficult for traders to make huge profits as the profits are shared with the middlemen or brokers.
Decentralize Exchange- The transaction fees in a decentralized exchange are very minimal when compared to a centralized exchange.

✓ Ease of usage
Centralize Exchange- The centralized exchange is user-friendly and easy to perform trades on. This is a major advantage of the centralized exchange as it has a low learning curve.

Decentralize Exchange- it’s difficult for a newbie in trading to have a smooth learning experience. It's not user-friendly and has a steep learning curve.

✓ Volume and Liquidity
Centralize Exchange- Because of the popularity of the centralized exchange, there is a high volume of trades and high liquidity of assets pooled into the platform. This makes it trades fast and smoother.
Decentralize Exchange- The trading volume and liquidity isn't high as compared to the centralized market, thus making it a second choice for traders wanting to enter into the cryptocurrency market.

Answer to Question 3

According to data gotten from coinmarketcap, the best two centralized exchanges of 2021 is Binance, followed by Huobi global.
Source

Binance Exchange

Binance Exchange is “one of the popular cryptocurrency exchanges that offer trading in more than 45 virtual coins including Bitcoin, Etherium, Lite Coin, and Binance coin.” Binance Exchange has the highest market trading volume in the world at about $100,314,516,612 with 1,827,722 BTC.

This makes Binance Exchange the highest trading platform in the world. Binance has over 400 active market trade pairs and 6 unverified market pairs. Binance was launched in 2017 and has experienced exponential growth within four years of its establishment. It boasts of executing about 1.4 million orders of trade per second. Its CEO is Changpeng Zhao.
Source

12.png
Verified profile on Binance
The picture shows my verified account on binance. Viewing from the top-right corner, close to my email shows verified.

Huobi global

Huobi global is the second largest cryptocurrency trading platform in the world. Huobi’s trading volume is about $22,378,153,102, 407,804 BTC.

Huobi has over 954 active market pairs being traded daily.
Huobi was founded in 2013 by Leon Li.
source

Screenshot from 2021-04-27 16-04-41.png
Verified profile on Huobi global
Picture showing my verified profile on Huobi global.

I have three active trades currently on Binance Exchange.
Trading BNB/USDT, DOGE/USDT and WIN/USDT cryptocurrency pairs.

11.png
My binance portfolio is worth 31 dollars as at of 27 Apr 2021

Answer to Question 4

Installing Metamask
Metamask is a wallet used together with the Uniswap for sending, receiving and trading cryptocurrencies.

Screenshot from 2021-04-27 17-29-57.png

Selecting the desired wallet to use. Metamask was selected.

Screenshot from 2021-04-27 17-36-07.png

Metamask chrome extension was downloaded.

Screenshot from 2021-04-27 17-36-10.png
Metamask chrome extension was installed

Screenshot from 2021-04-27 17-36-31.png
Add extension to chrome

Screenshot from 2021-04-27 17-41-42.png
Welcome to metamask

Screenshot from 2021-04-27 17-41-49.png
Start set up

Screenshot from 2021-04-27 17-42-01.png
Agree to terms and conditions

Screenshot from 2021-04-27 17-49-47.png
Create password

iMarkup_20210428_231633.jpg

Create secret back-up phase

The Uniswap Exchange.
The Uniswap is a decentralize exchange platform. I will be showing you how to use the Uniswap to swap/buy a coin.

8.png

To swap a coin from one coin to the other, click on the swap button
Note: The base cryptocurrency for Uniswap is Etherium.
In this demonstration,I will be swapping from Etherium to SKL.

7.png

Enter your desired amount of coin to swap.
Select your desired coin to swap to.
Click on Review swapping

Add a subheading-1.png

There is an option to choose the best rate available or quote.
If comfortable be the quote, click on the Swap button.

Sending on Uniswap
9.png
Click on the send button.

10.png

Input your desired public wallet address.
You can also scan a wallet address by clicking on the scan icon, then send the crypto asset.

Thanks to @yousafharoonkhan for this wonderful lecture. It was very explanatory.
I am a member of steemalive and this is my introductory post

image.png
Subscribe

Comments 1


First respected student Thank you very much for taking participate in Steemit Crypto Academy Season 2, Week 3 course class..

thank you very much for taking participat in this class

Grade : 6

30.04.2021 03:59
0