Steemit Crypto Academy Contest / S1W2 – Reviewing Centralized Exchanges by @concord-leo

INTRODUCTION

Before I proceed to write on this topic it is important to know some key words we will be using in this challenge. First, I will like to define the word exchange. An exchange is a virtual marketplace that permits the transaction of cryptocurrencies and other digital assets. Individuals with cryptocurrencies are able to exchange their tokens into other crypto coins or fiat money. It also serves as wallets that users can store their tokens or to make payment easily.

They are run by a company that validates the financial transactions of both the buyer and the seller through confirmation messages such as e-mails. As the name implies centralized exchange is an exchange that is controlled by a center node or an administrator who controls all activities in the platform.

There are two types of exchange. They are: Decentralized exchange and centralized exchange but in this article we will be discussing about centralized exchange.

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Benefits of Centralized Exchange

1. There is a central server that saves backup information of users and this enable recovery process when private keys are lost.
2. Anyone can buy or sell crypto or fiat to any currency or crypto coin of your choice. This can be achieved by funding the wallet by depositing it from your connected bank account or wallet.
3. Defaulters and offenders can be punished by the administrators and funds can be easily reversed.
4. Criminal activities in the platform are minimized due to the know your customer process that is used to get the personal information of users before they can access the platform.
5. The stress of managing bogus private keys is reduced due to the exchange provides unique authentication codes to confirm transaction.
6. Users of exchange can communicate with the administrator easily when they need assistance.

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

1. User friendly exchange. I love exchange platform which the features are easy to understand and navigate. Binance is one of such exchange platform.
2. I love to use exchange with Cheap or less gas or transaction fees.
3. Efficient customer service and customer review is another aspect when choosing any exchange. It can be gotten from different social media handles or on play store where I downloaded the app.
4. Security of the platform is very important when I am choosing an exchange. I will not love to keep my assets where is prone to hackers.

My favorite centralized exchange and its unique features

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Binance is my favourite centralized exchange and I have used for over 6 months. It is one of the best cryptocurrency exchange in the world if not the best. It was founded by a developer named Changpeng Zhao. It was founded in china but due to Chinese government strict regulations on cryptocurrency trading it was registered in Cayman Island. It reached a market capitalization of $1.3 billion which made it the largest cryptocurrency exchange in 2018.

In 2021, Binance witnessed a blow of accusation of money laundering and criminal activities related to tax in United Kingdom. The exchange platform has also made a good name by the humanitarian activities it is rendering to Ukraine by donating money during the Russian invasion this 2022.

UNIQUE FEATURES

1. There is readily available liquid assets or coins of any crypto pair that can be traded on Binance daily.
2. Low gas or transaction fee for any withdrawal on the platform.
3. Transactions made on the platform are highly secured.
4. The customer service is fast, reliable and efficient.

Is there anything about your favorite exchange you will like to be changed? Discuss.

Though Binance is my best exchange platform but there is something that I will love the administration of binance to look into and work on it. The “know your customer” was very stressful to complete when I did mine. The face capture verification was a thug of war and it took me a day plus to pass through that stage. The demand of any valid ID and verification process was another stress altogether. I will be happier if the administration of binance would minimize the stress new beginners go through in order to make use of the platform.

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?

1. Some centralized exchanges have transparency issues in such that they can manipulate their assets and trading volume for their gain.
2. They are prone to attack thereby making users to be afraid of losing their assets.
3. Identities of users can be stole or leaked because of the know your customer process.

Conclusion

Though I have not used another centralized exchange apart from Binance due to I’m comfortable with the platform and I’m enjoying the services, I will love to try others and see how they work and compare.