Steemit Crypto Academy Contest / S1W2 – Reviewing Centralized Exchanges by @abdu.navi03

Hello everyone ? how are you all? I hope everything is fine. I'm fine as well.

Last week, we finally returned to the Steemit Crypto Academy. But due to several factors I could not create a post. At addition, the posting pattern in the Crypto Academy has modified slightly. So let's keep this post focused.

_{This picture is edited by me using canvas}

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INTRODUCTION

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Cryptocurrency was an innovation no doubt to that and world took too much time to adapt it and still adapting. The one excuse is of being it less secure while the it is the fact that the more the world adapt it the more secure it will be. Just like the cases with banks, initially they get looted very easily but not it’s very hard. These cryptocurrencies exchange against dollars and other national currencies in cryptocurrency exchanges. However you can get things against them specially from few stores, they accept payments in cryptocurrencies. Recently Ukraine get helps in cryptocurrency and India too got it during their COVID breakout mainly in Shibainu.

CRYPTOCURRENCY EXCHANGES

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Cryptocurrency exchanges are platforms which allow users to trade their cryptocurrency to get fungible assets such as dollars or from shops such as buying phone or something. Mainly it concerns with fiat currencies. Broadly there are two types of exchanges;

1. Centralized Exchanges
2. Decentralized Exchanges

Centralized Exchanges are exchanges which are run and control by some centralized authority and managed properly through team. They have been owned, run and managed privately. It allow users to trade under their service providing. However this is violating the main rule of cryptocurrency which was decentralization.

Decentralized Exchanges are exchanges which are not run and control by some centralized authority and managed by it’s users through different methods. One most basic is, upon any change suggested they do the voting and users vote on it. If majority approved it, it then proceeds and occurs.

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QUESTION NO 01

_{Discuss briefly Centralized exchanges and its Benefits to crypto users.}

As I have explained a little about centralized exchange, now its time to learn it briefly.

As it seems that centralized exchanges are against the theory of cryptocurrency which basically was about leaving banks and stop trusting people in suits, it is also one of the major need of cryptocurrency. Because this currency is digital and like pickpocketing, this is also prawn to hacking and other methods off stealing. So you need banks and you trust them to safeguard your money. Here in these exchanges, you trust them to safe guard your money. The other thing is as it needs no voting, owners are quick to changes that attracts not only more users but keep happy their old ones. Therefore unlike decentralized exchanges where changes come after long voting and approval, changes here come very quickly. As I discussed about voting, it proved that the decision making in centralized exchanges were also very great. As they control all the exchange but they do not control the users wallet. They have ways to deduct amount of cryptocurrencies but not the full control.

BENEFITS OF CENTRALISED EXCHANGE TO CRYPTO USERS

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1-SECUURITY

First and foremost benefit of centralized exchange, and why people prefer it is security. It is so secure than decentralized and easy to use. It is secure because it is hard for hackers to hack the system and steal. However hacking still occurred but it was not that significant in amount compare to hacking of decentralized exchanges and usually exchanges refund them to keep the trust of the users.

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2- ACCESS TO TRUSTED PAIRS

Recent activity on crypto space includes a scams. And pairs with no background are called scam coins because they can run anytime with the money of people and coins will just valued zero. Centralised exchanges however do scrutiny about the project and team and then let them run in platform to keep users trusts and users don’t have to worry about projects often.

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3- QUICK UPDATES

Quick updates are necessary because they keep the exchanges not only entertaining but easy to use for those who are using it for the first time.

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QUESTION NO 02

_{What do you look out for when choosing an exchange to trade your crypto assets?}

The things which are most important for me while choosing an exchange for transaction are mentioned below in a prioritized way;

1-SECURITY

Security is main thing for any user whether dealing as a whale or dolphin or even trading in within $1000. Exchange should be highly secured and no one should have the access to the wallet apart from the user who have the private key or the password.

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2-TRANSACTION FEE

Transaction fee is the second most important thing to look into any exchange. Because low fee can even save you a lot of amount if you trade more often.

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3-TRUSTED PAIRS

Crypto pairs on exchange should not be scams therefore one of the main thing is that the currency I’m buying or holding didn’t turn out to be scam.

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4-TOOLS

Tools within the exchange to do technical analysis on live charts in that particular exchange. Basic are EMA,Vol,and RSI.

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QUESTION NO 03

_{Review your favorite centralized exchange and explain its unique features}

My favorite centralized exchange is based upon the above based points. It is the famous one, Binance Exchange.

Source

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SHORT HISTORY

Binance is a centralized crypto currency exchange came into being in 2017 and registered at Cayman island by a Chinese national Changpeng Zhao who is right now the CEO of Binance and commonly known as CZBinance. It’s native currency and BNB and its based upon Binance blockchain which is performing many different function and being an innovative blockchain.

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FUNCTIONING

To buy or sell any crypto currency you need certain cryptocurrencies and it can be obtain from fiat currency in this exchange easily. Then you can chose any currency, you will be provided with its live chart with various tools and specially the current orders that have been listed, so you can have an idea of demand and supply changed in seconds. It is important for experienced traders.

Source

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You can also switch to spot or futures depending on your choice.

NEW LISTINGS

Source

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These are the new listings recently on Binance and they all are safe projects with strong background and also with high market, i.e. high buying and selling.

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The Unique features of Binance

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1-VARIETY OF OPERATIONS

Binance able users to operate in many ways. There are three types of trading, spot, future and margin available and apart from trading it allows you to earn by staking and also have an NFT marketplace opened recently.

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2-SAFE PROJECTS8

As I’ve focused on this point a lot because this is very important that you don’t get scammed in this market. Therefore for beginners who can’t do research properly should prefer Binance.

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3-UPDATED

It is very updated exchange. NFT marketplace is prime example. Also it runs many different events and gifts people and also run competition of trading to increase the engagement with the users to build trust constantly.

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4-SECURE WALLET

Wallet is highly secured and if something happened exchange is willing to repay the loss that happened because of their lack in security.

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QUESTION NO 04

_{Is there anything about your favorite exchange you will like to be changed? Discuss}

There’s always room for improvement in everything, nothing is perfect. Major changes what I want are;

TRANSACTIONS FEE

Binance is the biggest exchange and hence used more, still some exchange charge less fee than Binance per trade. Also the interest rate on futures trade is very difficult.

There’s one thing I think in every exchange I want changed is that orders with big capital done earlier than order with less capital. Such as order of $1000 execute earlier than order of $10. It shouldn’t be done. There should be a way to form a queue of orders and occurs according to that. I want this change too in Binance.

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QUESTION NO 05

_{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?}

Centralized exchanges also have their shortcomings. Which are;

1-AGAINST IDEOLOGY

First of all for any crypto enthusiast it is hard to swallow that crypto currencies are exchange under centralised authority because crypto technology is against it centralisation and based on people’s power.

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2-VERIFICATION

For using these platforms you have to be verified. And verification is not simple by many platforms they need so much personal information and legal documents and then still they take days in forming the account yet keeping the private keys.

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3-HACKING

Although they are more secured but hackers love them more because their are more targets first of all and secondly many centralized exchanges have private keys, so once they get them, boom!

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CONCLUSION

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Cryptocurrency have value until they get exchange and for that exchanges play a very important role. Both type of exchanges have their benefits and short comings. Centralized exchanges are properly fast running easy to use exchanges for beginners. In them Binance is the leading exchange which contain safe projects with proper details and provide variety of modes of trading.

I am inviting @huzaifanaveed1 , @sachin08 , @malikusman1 to participate in this Academic contest.

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regards
@abdu.navi03