We all know that crytpo world or crypto currency exchange made actually for financial freedom .. Because at past people seen that how the government control on them due to money and they did not find out any financial freedom which is another reason why crypto invented while we are using it .. Anyway , those member who is right now in crypto world might be heard about centralized and decentralized exchange ? Well, this is the basic thing which all the crypto user should know i think .. I still can remember when i was newbie in crypto some one talked about Centralized exchange but i have not any idea about it and start to thought this is maybe like central bank in my country.. But i was right about it because actually centralized exchange act like central bank which you will be able to know soon .. As well decentralized exchange mean opposite of centralized exchange ..
Let's talk about it today..
Centralized exchange:
Centralized exchange refers same as central bank where you will have your own identification .. Such as Binance which is centralized exchange and if you want to have a binance account then there you need to create a account with your email as well phone number as a prove which is same as like central bank in any country where you need to submit your NID which mean National Identity card which refers you are the citizens of the country .. Infect centralized exchange mean you are depending on some thing to secure your funds.. And the company or exchange will pull you in rule .
Decentralized exchange:
Decentralized exchange which refers your own control in crypto mean the real rights of crypto currency where you will no need to worry about your funds as you will not need to depend on some one like decentralized exchange user do ... You can compare this with your own privet wallet where you will have your own privet phrase which can not control other mean can not control your funds .. This decentralized exchange also same where you do not need to deposit your funds or wait for any confirmation .. Infect the point is decentralized exchange give you the freedom of crypto currency ..
Centralized exchange advantage and disadvantage:
There has some few point about advantage as well disadvantage of centralized exchange.
Advantage: The first advantage come out is Liquidity which mean a coin buy and sell price movement .. Such as if a exchange list a coin but there has no buy order then how other trader buy the coin as well if there has no sell order then the coin price will keep pump and this is why liquidity is most important to keep a coin value in right position which a exchange provide goodly .. Second advantage is exchange system.. Such as if you deposit any coin or fiat in exchange then you can convert them into different currency according to the pair .. Such as if you talk about Binance then you can deposit there BCH then you can convert it to fiat directly like BUSD ,USDC,USDT as well into other crypto currency .. Last one is recovery password .. Suppose you have lost your password of exchange or forget it then how you will recover your funds ? Well , in this case exchange provide mean centralized exchange provide the password recovery system.. Also for any kind of help you can contract with the support team of exchange..
Disadvantage: There has some bad effect of centralized exchange such as when ever you will deposit your funds on exchange then it will take permission from the exchange team and this take long time some time ..This happen same when you going to withdraw your crypto from there and this become harmful at urgent time .. After that for any rule breaks the exchange team can locked your account and this mean you can not do something with your funds till the exchange team do not unlock it with proper evidence .. Some time exchange site get hacked due to less security which can effect on your funds too but the exchange site is not ready to back your funds at all .. Again a major problem in centralized exchange that usually our email address get disable due to some problem and if the email address is same with your centralized exchange then the problem become more bigger .. So in this cash you can make any withdraw from the exchange as for withdraw a confirmation code go into your email but your email get disable .. In this case , what you need to do is provide enough information to the exchange team properly .. Also if you able to give proper information to the team then you can get back your account minimum 20 days later which is really bad ..
Decentralized exchange advantage and disadvantage:
There has lot of advantage of decentralized exchange as well the disadvantage too ..
Advantage: Usually decentralized exchange mean control your own your funds by your own self mean you are the only controller of your funds .. This mean you do not need to wait for any confirmation or there has no worry about your funds locked or something but why ? Well, decentralized exchange mean you can say Uniswap where you do not need to create any account mean no email , no 2FA but you just need to connect there your wallet and swap coin.. As well after the swap you can directly sent your coin to your wallet with just transaction fee and there you no need any confirmation except the blockchain transaction confirmation .. Also as soon as your swap done then you can disconnect your wallet though there has no risk because for every swap you will get a confirmation code in your account .. As well in decentralized exchange there has lot of coin that is not available in centralized exchange because in centralized exchange only good ranked coin available .. Right now there has lot of decentralized exchange such as Uniswap which is based on eth network , Pancakeswap which is based on BSC network while quickswap which is based on Matich network or polygon network ..
Disadvantage:
The major disadvantage of decentralized exchange is privet key .. If you lose your privet key of your wallet then there has no way to recover your wallet as there has no system of recovery yet.. This is why to secure your funds in wallet what you need to do is keep secure the privet key all the time .. Also a disadvantage of decentralized exchange is you can not directly swap your fiat into crypto or crypto into fiat as there has no system like this .. Such as if you want to swap shib coin in uniswap what you need to do first is swap the shib into eth then swap the eth into dia but this system available in centralized exchange as there has lot of pair about it ..
But a thing is that if you look the decentralized exchange then that is the only way to keep your crypto as decentralized mean secure by your own control .. This is mean real freedom .. Though now all the centralized exchange thinking about taking step about decentralized way .. Hopefully near future all the exchange will be based in decentralized to give us financial freedom ..
See you in next topic😉.
Can't really understand it but I will save it for now. I need to reread it gosh 😵