STEEMKIDS CRYPTO ACADEMY S2W3/EXCHANGES /PART 1/10% payout to steemkids

Hello all, welcome to another week of steemkids crypto academy. Hope you all enjoyed your weekend. The past two weeks, we deliberated on what a blockchain consensus mechanism is and the different types. We also went in-depth in explaining further these various types of consensus mechanism and examples of the blockchains that make use of each one.

This week we are going to discuss about Exchanges.

What is an Exchange?

An exchange as the name implies are digital platforms where users are enabled to swap their digital assets either for fiat(Local currency) money or for other digital currencies.
These exchanges are like the normal traditional markets where items inclusive of foodstuff are exchanged or traded for money.
So this exchange market are online markets where the prices of digital currencies are determined based on the concept of demand and supply.

What are done in an Exchange

Basically speaking there are two things that are done in an exchange;

● Buying of crytocurrencies -

in this case the person can buy another currency by swapping it with another owned crypto and getting the new one or he can purchase new cryptos with the use of a credit or debit card. In the first instance, the buyer. in the process of bidding or buying, specifies the price he wants to buy the asset and then sets the order. Once the price is reached, the buy order is triggered and the asset acquired.

Currently, there is a provision called peer to peer(P2P) transaction where traders can also buy a crypto with there fiat by paying direct into the owner of the coin account and upon confirmation of the deposit releases the coin to the buyer on the exchange. The exchange platform acts as an escrow or middleman that ensures both parties conform to the transaction requirements. In a situation where there are grievances, it acts as an arbitrator, settling the issue between the two parties.

● Selling of cryptocurrencies.

This is a case where the owner decides to sell crypto assets he holds either by swapping to another asset or by selling in exchange for fiat. In the first instance, the seller set the price at which he wants to sell the crypto asset. Once the price reaches the price, the asset is sold off or swapped to another desired one.

In the second instance, the seller sells through the provision of p2p, where he selects the buyer he wants to trade with. Once he confirms the buyer have made the deposit into his account, he then releases the coins for the buyer. Just like mentioned above where the person is the buyer, the exchange once more acts as an arbitrator and escrow too, protecting both the buyer and the seller.

● Recently apart from the two mentioned activities that take place in exchanges, some have started providing other services like storage of cryptocurrencies, staking, farming and other many ways of generating income for users.

● Exchanges also allows transactions to be carried between them and to and fro other networks. We have many exchanges like Binance, Kucoin, coinbase, Gate.io, etc. So cryptocurrencies can be transferred from one exchange to another. Additionally, it is also good to note that while using these exchanges, we have to be sure that when transferring from one exchange to another, we are using the same network.

For example, Mr A is transferring Trx from Binance exchange to Tronlink pro exchange. Since the network of Trx in Tronlink Pro is Trc20 or Trc10. We have to ensure that the network we select in Binance is Trc20 network to deposit in TRC20 network wallet of Tronlink Pro. If not the coin will be lost indefinitely. So many coin holders have lost their coin by sending from one network to a non compatible network.

We have networks like tron network, Binance Smart Chain, Ethereum network, Solana network, etc.

Assignment

1. Define and explain an exchange?

2. Explain in details what is done in an Exchange.

Rules

Assignment should be done using your steemkids verified account

Ensure there is no plagiarism.

The post must written in steemkids community.

Kindly tag me in your post

Kindly resteem and drop your link as a comment for the post.

Use the following tags:

#steemkidscryptoacademys4 #steemexclusive #yourcountry(eg - #venezuela) #steemkids

Ensure the number of words should not be less than 180 words.

Entry will be closed at Saturday 4th December, at 11.59pm GMT.

The best posts can be selected for quality posts of the day. The earlier the entry, the more it stands the chance of being selected.

Looking forward to having a great time with you all in Season 2 wk3 of steemkids crypto academy