Steemit Crypto Academy Contest / S1W2 – Reviewing Centralized Exchanges by @bolaji001
INTRODUCTION
Centralized exchange is used by so many crypto holders and I will be emphasising more on their importance, loopholes and remedy to the little fault they have, though Rome was not built in a day, so the progress of centralized exchange has to grow steadily.
DISCUSS BRIEFLY CENTRALIZED EXCHANGES AND ITS BENEFITS TO CRYPTO USERS.
Centralized cryptocurrency exchanges are exchange that act as a third-party between a buyer and a seller, they also do the work of organizing and coordinating cryptocurrency trading on a large scale.
Centralized cryptocurrency exchanges participate in markets by keeping record of open buy and sell trades, which of volumes and prices of cryptocurrency asset. They also offer supplementary services; such that crypto assets are deposited in their custody before any transaction or trading. Some examples of centralized exchange are
- Binance
- Kucoin
- Coinbase
- Bittrex etc....
BENEFITS OF CENTRALIZED EXCHANGE TO CRYPTOCURRENCY USERS.
User friendly
Beginner investors are offered user friendly environment for easy trading and transaction, users find it easier to view live transactions, check their funding balance, centralized exchange can be logged in through web browser and also through the exchange application.
Reliable
When it comes to reliability and security of transactions and trading centralized exchange, they offer their user great advantage with that. Transactions are done with speed where by users don't have to complain about delay.
High transaction volume
Centralized exchange has a very high trading volume which leads to high liquidity, buying and selling occurs at a very steady rate.
WHAT DO YOU LOOK OUT FOR WHEN CHOOSING AN EXCHANGE TO TRADE YOUR CRYPTO ASSEST?
Popularity: I look out for popularity of an exchange to invest on, because for a lot of people to make use of such an exchange for their cryptocurrency transaction it most have one or two good qualities that makes a lot of people patronize it.
Speed: Transaction speed will encourage more user to make use of such exchange, because transaction might be needed urgently and if there's delay in transaction, the purpose of the transaction might not be met.
Security : I look at how secure the exchange is before investing my money in an exchange, security is one of the major things an exchange must build on because investors don't want to lose their assets through scam or hacking.
High liquidity: High liquidity volume will give trader more advantage to be in profit and this will encourage more users to join such exchange.
REVIEW YOUR FAVORITE CENTRALIZED EXCHANGE AND EXPLAIN ITS UNIQUE FEATURES.
My favorite exchange is Binance exchange, it's an exchange that has more users than any other exchange.
Here is the front page of Binance exchange, after login in it will automatically take user to the front page whereby we have some other features that we will be mentioning below.
At this section, we can see all types of market, all the cryptocurrency pair listed on Binance can be found here , so user can easy search for any crypto pair of his/her choice then trade with them
Here is another important section on Binance exchange, it's called futures, this is where trading using leverage can be done depending on the size of our accounts, we have instant market order, limit order and stop order. Future trading can be divided into two which are coin margin trading and USDs margin trading.
This phase on Binance is a very important one, because this is where our spot trading takes place, here crypto assets are paired with each other for trading purpose. We also have instant market order and limit order.
Here we have the funding section, right here deposit and withdrawal can be made using peer to peer.
IS THERE ANYTHING ABOUT YOUR FAVORITE EXCHANGE YOU WILL LIKE TO BE CHANGED? DISCUSS.
Binance exchange had been doing well since I have decided to invest with them, one thing I want them to improve on is their peer-to-peer transaction.
What I mean by this is that transactions are a little bit delayed due to bank issue where by users reject some bank. If this issue can be sorted out it will make the exchange more pleasing and perfect.
WHAT SHORTCOMINGS DO YOU SEE ON CENTRALIZED EXCHANGES AND HOW DO YOU THINK USER FUNDS CAN BE PROTECTED SINCE WE DON’T HAVE ACCESS TO OUR WALLET PRIVATE KEYS?
Custody: Centralized exchanges does not give users full access to their fund because users don't have their private keys with them.
Intermediary: There are always intermediary during transaction which is not too safe for users and their funds.
Security: Centralized exchanges can easily be hacked and user private keys are not safe, because once hackers get hold of these keys, they can intrude into users' privacy.
Transparency: So many reports have been coming from different personalities on how they suspect some cunny movement on their account.
High transaction fee: So many users have been complaining of high transaction fee, this will always reduce the volume of trades and thereby reduce liquidity.
Possible remedy
I will be brief and straight to the point on this aspect, the governing counsel of the centralized exchange in question should sit down and look for how to make their exchange more secured from intruders and reduce the transaction fee because these two points are very important.
CONCLUSION
Centralized exchanges are widely used in the world of cryptocurrency and it has helped to keep some of our cryptocurrency assets and I know in due time all the shortcomings concerning centralized exchange will be solved.
Thank you for publishing an article in the Crypto Academy community today. We have accessed your article and we present the result of the assessment below
Comments/Recommendation
Thank you for sharing your ideas with us and also taking part in this contest.
Total|7/10
Thank you so much Prof for reviewing. You are welcome Sir.
The lack of custody is a fundamental issue in centralized exchanges. And that's the inherent nature of centralized exchanges. Giving you custody is one of the thin lines separates them from being Decentralized.
Nice post.
Exactly bro, you’ve said it right. That’s the major issue with centralized exchanges.
True, but is it not good to know that you can retrieve your keys? I have found so many people on Steemit who lost their keys and had to start all over again.
Last question, do you think Binance will ever be moved from the No.1 spot?
@bolaji001 - great post!
It’s not quite like steemit keys, it’s not that the user loses their keys. The thing is that upon making a purchase, the cryptocurrency you acquire is directly stored in your exchange-hosted wallet, which is custodial, this means the exchange has control of your private keys.
Binance is a really strong and dominant platform, if they keep up their good work of course they can remain top but the have really good competitors.
Thanks for reviewing ma, I really appreciate.
Thank you for the explanation and conformation about Binance!