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

Hello my friends, trust you are all doing great. You are welcome to another great week of steemit engagement. This week, we will be writing on the topic Reviewing centralized Exchanges.

This is a great topic considering that cryptocurrency is gaining much grounds all around the world. People need to know about how they operate in the crypto space, taking advantage of whatever is available to get the most out of it. I will be focusing on exchanges with particular reference to centralized exchanges. These exchanges are important to the success of the cryptocurrency industry.

Describe briefly Centralized exchanges and its benefits to crypto users.

A centralized exchange is an online platform where the buying and selling of cryptocurrency takes place. It can be said to be a market place for cryptocurrencies. Just like a traditional market is a place where sellers come with their goods and sell to the buyers with fiat, exchanges provides just that for cryptocurrency enthusiasts. The goods in this case is cryptocurrency, while the buyers buy with fiat or cryptocurrencies too.

In a centralized exchange, a third party is involved. This third party acts as an escrow just like a bank does. Providing the base and space for cryptocurrencies holders to transact with each other. Even though, the individual holders each possess his own wallet, the entire exchange is controlled by the owners of the exchange.

Benefits of a Centralized Exchange

• Centralized exchanges makes it possible for its customers to trade their fiat for cryptos. This is made possible by pairing various fiat currencies with some crypto assets like bitcoin, ethereum, usdt and many others. This is also applicable while making withdrawal.

• Centralized exchanges determines to a large extent the pricing and performance of cryptos in the crypto space. Trading activity of a crypto helps to measure its worth. The higher the trading volume, the less volatility and manipulation that crypto would experience. The higher the volume, the faster the transaction would be executed, the less price fluctuation it would have.

• Centralized exchanges offer other crypto investment opportunities to its customers like farming, staking and savings. Currently, they have provisions for nfts, adding more sources income in their platform.

• Centralized exchanges are more reliable. They provide additional security for transaction processing and trading. This offers more comfort and confidence to the users of the platform

• Centralized exchanges are also very much user-friendly when it comes to trading and investment in cryptocurrencies. A new user can easily glide along in a centralized exchange due to user interface which props up from time to time.

What must you look out for when you are choosing an exchange to trade your crypto assets?

There are several factors to be considered before selecting the exchange to trade with and they are:-

• The credibility of the platform needs to be considered. How reliable is it, what is its history. Who owns it and what is his reputation. Their terms and conditions can also be helpful in determining this.

• Is the exchange user-friendly, easy for beginners to interface with?

• How easy it is to buy with fiat and sell the cryptocurrencies. Some exchanges have some minimum amount from which you can sell. Making it difficult for small users to sell their assets.

• What is the transaction volume of the exchange? This will tell you a lot about people's view about it and how easy it is to buy and sell on the exchange.

• we also need to consider their anti-money laundering laws (AML) and their Know your customer(KYC) practices. This sometimes requires your identity cards, proof of residence. Some exchanges bars residents of certain countries from accessing their exchange.

• What is the exchanges method of securing the account of its clients? Check whether it makes use of the two-factor authenticator( 2FA), more especially that of google which is more secure than others.

• You also consider if the exchange insures the fund of its customers in the case of loss of assets under some circumstances.

• For a trader, you need to consider if leveraging is available or functional.

• we also need to check the prices of assets. Since asset prices varies from one exchange to another. So that we can choose an exchange with moderate pricing of assets to get more value for our money.

• There is need to check the crypto assets an exchange offers comparing it with another. Additionally is the pairings of those assets.

• We should review the fees charged for each trade by the exchange compared to other ones.

Review of my favorite centralized exchange.

Gate.io

There are several exchanges available that are very good. However, one of my favorite is Gate.io, founded by Lin Han.
Gate.io exchange is an old crypto exchange from China launched since 2013 formerly known as Bter.com but rebranded to Gate.io in 2017. It poses as one of the fastest growing exchange in the crypto space.

It is known very well as a leading platform for Initial Exchange Offerings, provides facilities for margin and leveraged trading, margin lending, borrowing and a host of other financial services. Its parent company is Gate Technology Inc.

What are some of the basic features which makes it unique?

	Gate.io interface screen showing the markets available on it.
	Other products it offers(financial, nft, copytrading, IEOs, etc)

• The platform is known for its abundance of different crypto currencies. It boast of having 180 different cryptos and almost 400 different cryptocurrency market. This attracts users to it, knowing they have a wide range of crypto base to choose from.

• There are so many activities that can be performed on the platform. Cryptocurrencies can be traded, margin lending and borrowing of funds can be done, trading with leverages of 10x, investment plans services, investment in IEOs through its startup platforms, perpetual swap contracts, copy trading, liquidity mining, nft box and so much more.

• Transaction fees are relatively low, even though it might not be the lowest but is competitive. Transaction costs are 0.2% of the order amount.

• Gate.io is very secure. It stands out when it comes to security. In fact, it was chosen as the best exchange when it comes to cybersecurity. There are several built in security mechanism in place on the platform.

• It has an efficient customer support service available online, round the clock.

• it also provides trading opportunities for indices.

• Gate.io have strong community base through chat groups on the platform, which is always active.

• It has an abundance of IEOs which it list several days before making it active on the platform. With this information, users can take advantage of such offers to make more money.

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

There are some changes I think that should be made on the exchange platform. One is that withdrawal can only be done from $50 and above while deposits can be less than $50. This will discourage new users with low funds from using the platform. I think they should reduce their minimum withdrawal to $10.

Secondly, the interface seems clustered, dull and unattractive. I wish they work on it to make it look catchy,

Thirdly, the community chat group uses chinese language mostly, I think members should be encouraged to use a central language like English while communicating on the chat group of Gate.io.

What shortcomings do you see on the centralized exchanges and how do you think users funds can be protected since we don't have access to our wallet private keys?

Diaadvantages

• One of the shortcomings is that of users not having control of their funds.

• Traders and investors have fewer options to trade on. So many exchanges have mostly 40 to 60 cryptos available for customers to choose from. This is because, they do not want anything that would dent their reputation. So they only list reputable coins. This limits the trading and investing options of their customerrs leading to reduced financial growth too on both ways.

• There are always strict regulations since the exchange is regulated by the government. This also means that government personnel can have access to clients information, if they so desire. So for individuals requiring privacy, it will not suit them.

• There is the risk of insolvency on the part of the owner of these centralized exchanges, since it is a legal corporation. When that happens, customers stand the risk of losing their hard earned assets and money.

what can be done to protect users funds

One of the ways to protect our funds is to share the risk, like as a saying goesnot putting all our eggs in one basket. Do not keep all your assets in one exchange. Register in several exchanges and spread your assets accordingly.

We should also ensure that we save our funds by safeguarding our passwords and devices from which we carry out our wallet transactions.

If we have coins that we intend to hold, for a long time, we can move it to a decentralized wallet until maturity time.

Conclusion

Centralized exchanges is at the core of the cryptocurrency market. They make the crypto space liquid, creating wealth for so many persons. So cryptocurrency cannot do without centralized exchanges.

However, we need to be careful to select the exchange that will suit what we want to do on the plaform, be safe, and user-friendly too.

Let us remember that safety of our assets mostly depends on us.

So far so good, I have reviewed my favorite centralized exchange, I will like @ubonudofot @beautybb @graceleon @mile16 @ruthjoe to please, review theirs let me learn more. Thanks a lot.