Steemit Crypto Academy Contest / S1W2 – Reviewing Centralized Exchanges by @churchangel

INTRO
Exchange
An exchange is a platform that provides a medium or an interface where both buyers and sellers can interact and transact with one another, a place where individuals offer up their crypto assets either at a market price or at a particular chosen price in exchange for other FIAT or other cryptocurrency assets exchange has four core functions which are

• Order Matching
• Assets exchange
• Order Book
• Trade

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Discuss briefly Centralized exchanges and its Benefits to crypto users.

The centralized exchanges can be easily explained as a platform where a buying and selling of assets from digital assets to fiats or exchange from one asset to another with the exchange acting as the middleman or intermediary ensuring both parties fulfill their end of the deal, the activities carried out in an exchange are either done between individuals like P2P or done between a user and the exchange like Depositing FIAT and exchanging for a digital asset
The centralized exchange are responsible for overseeing activities carried out by users and in this case can take decisions like restricting a user if he violates the platforms policies or implementing new policies to improve a users security like introducing KYC e.t.c . Below are the some core functions that can be found in a centralized exchange

ORDER BOOK
An order book is basically where information about outstanding transactions in particular or general are being displayed in most cases other recent transactions market price and other information that help an individual that wants to buy or sell.

TRADE

Exchange Of assets for fiats between users like P2P or exchange of assets between a user and the exchange like spot basically trading of all sorts

CAPITAL DEPOSITS/WITHDRAWAL
A core feature found in all Centralized exchanges is that they create room or channels through which one can deposit capital and exchange it for other digital asset or exchange assets for fiats

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BENEFITS OF CENTRALIZED EXCHANGE

To me the most important use of Centralized exchange to a crypto user is that it makes the purchase and sale of one’s digital assets hassle-free, one can in less than minutes buy and sell crypto without stress
Another importance of centralized exchange is scalability, most centralized exchanges perform swaps in less than minutes lets take binance for instance if one sends BNB the receiver always gets it in minutes
The third importance I would state here is that the platform installs a lot of security policies and Measures to ensure that its users portfolio is safe

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What do you look out for when choosing an exchange to trade your crypto assest?

VOLUME

The most important factor that determines an exchange for me is its daily trading volume, the more or the higher the exchange's trading volume is the more users it has on its platform. A platform with a high number of users must most likely be doing something right to attract a huge number of users. I consider the 24hrs trading volume of the platform because if a lot of users are transacting in a platform the will be enough liquidity to go around which implies that ORDERS will be executed really fast

TRANSACTION FEE
Most often exchanges don’t have a similar transaction fee for sending assets, so I often check how high their transaction fee is before deciding if I can trade with the exchange or not

ASSETS
They are a lot of exchanges out there with a very limited number of assets that can be traded on them, let take for instance Kraken, one can not trade Steem on their platform so when selecting an exchange I often go for one that has a huge variety of assets that can be traded on it

SECURITY
Of course, the safety of my asset is also a priority, when selecting an exchange I have to closely look for the security measures put in place to help users secure their funds, things like KYC and security companies in partnership with the exchange are of utmost importance as well in determining if I will use the exchange or not

Review your favorite centralized exchange and explain its unique features

Source
BINANCE

Binance is a centralized cryptocurrency exchange that was created in 2017, the binance blockchain
is one of the most used exchanges all around the world at the moment, currently topping the world’s centralized exchange list with a whopping $18,641,034,174 worth of 24hr trading volume.
Binance was founded by its current CEO Chengpang Zhao in Singapore and was originally created in the Ethereum blockchain as an ERC-20 token in its initial phases, Binance held its ICO in July 1st and sold half of its total token supply with a live price of 0.10$ raising up to 15 million dollars for selling 100,000,000 million units of its token.
The binance grew and developed its own blockchain and ever since has been experiencing a steady growth in all aspects with its token rated among the world's top 5 cryptocurrencies, the binance coin is currently worth around 400$. Below are some of binance unique features.

• FUTURES BATTLE ON BINANCE

This is a feature that was just recently integrated into the Binance platform, a form of gaming incentive while trading, one can earn points and at some point rewards for participating in a futures battle.

Source
You predict the direction of a market either long or short and you will be paired with an opponent who you will battle against and after a few seconds of beginning the battle one can end battle and earn points or wait for when the time expires you earn points if your prediction is right

• BNB VAULT

This is more or less like staking but on a long term scale and in this case, the binance platform will be responsible for distributing your funds in different assets and combing profits while you earn passively the platform gathers you profit.

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• Vanilla Option

This is a feature that allows binance platforms user to buy or sell crypto assets on a predetermined prize, users have to have assets frozen or kept in their Vanilla options wallet before they can participate in the trading option, one can by at a predetermined price at a lower rate and sell at a higher rate

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Is there anything about my favorite exchange I will like to be changed?

• VERIFICATION DELAY

On several occasions when I refer people or help new users register on the binance platform, during the KYC verification phase it sometimes takes Days before the account gets verified or before the decline of the verification, this in many occasions I find it very unhelpful, the binance is a big platform and I believe if they can allocate more time or resources verification of KYC is going to be done in a matter of minutes

• MINIMUM TRADING FEE

I see no reason why the platform will cap the minimum amount for a fresher in the trading aspect to be 10$, in my country I believe 10$ isn’t something you bump into very easily if I could I would request that the minimum trading fee be reduced by half at most 5$. Beside these two point I don’t see any more changes that needs to be rectified on Binance

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 only have limited options when it comes to securing a users funds i.e KYC, 2FA and passwords which I believe if closely monitored by an elite hacker can be footed very easily via phishing or virus bug
In my opinion, the most secure way to go about the securing of users' funds in a centralized system is to decentralize the wallet aspect of every exchange. I don’t know if it’s possible but I do know this would go a long way to secure user's funds, in the history of decentralized exchanges never have we heard of one getting hacked or losing funds to scammers
Centralized exchange on the other hand Binance in 2019 had a massive attraction where users even with 2FA got their assets stolen although binance paid in full for their losses it still happened and can happen again.
Integrating or handing over wallet security to the user via passphrase, private key or JSON key can be very useful and can go a long way in ensuring users don’t have their funds stolen anymore, at least this way the security of each individuals wallet would solely be his responsibility

CONCLUSION

Centralized exchanges have made life as a trader much more easier than it used to be, one can easily purchase and sell tokens or even participate in different ICOs very easily, especially with an amazing platform like the binance