Steemit Crypto Academy Contest / S1W2 – Reviewing Centralized Exchanges by @prince4icon

Introduction

Greetings great people of Steemit Community! I want appreciate this house for their efforts and for putting up this great contest.

Cryptocurrency Exchange

Digital Currency Exchange (DCE) also know as Cryptocurrency Exchange are platform precisely digital platforms that permits digital asset exchange from it users either for other Crypto currency or Fiat money.

The massification in the use of crypto currency and the ease at which at which exchange is carried out without much difficulties is as a result of the availability of these exchange platform.

The services offered by these exchange platforms include the storage of Crypto currencies as if they are wallet, the purchase of virtual currency with the use of debit card, credit card and Bank transfers and so on.

Exchange can be classified into two main types namely Centralized exchange which does not grant it users access to their private keys and Decentralized exchange which grant it users access to their private keys. Let's look at centralized exchange.

Discuss briefly Centralized exchanges and its Benefits to crypto users.

Centralized exchange also known as Centralized Cryptocurrency Exchange (CCE) are exchange platforms that virtual in nature that functions like traditional exchanges. The centralized exchange operate in such way that there is main or controlling system that regulates and controls the activities of the users. In centralized system users activities are monitored by the control system and as such user are not granted access to their private keys. The benefits of centralized exchange are as follows;

• Transparency- In this kind of system the users can get to know the controllers and the controllers would equally have a detail information of the Users.
• Lost can be recovered in this system, for instance if transfer is made to an unknown account, through the help of the controllers these funds can be recovered, but in the decentralized exchange any mistake of such can be costly.
• The volume of transaction in the centralized exchange is much greater
• These exchange equally has great liquidity as compared to decentralized exchange.
• Transaction time in the centralized exchange system are shorter.

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

There are several things I found from my study that must be considered in choosing an exchange, below are few of them;

Jurisdiction

You must try to investigate and to be sure that the exchange you are opting for render service to people within your state and your country before picking the exchange. Some exchange has special web address that is particular to a country.

Ease of Use

As a beginner in trading it is not every exchange you see or hear about that you venture into you must ensure that the exchange is user friendly and that navigation around the exchange is not difficult, if not it would cause you serious trouble, you will have to be looking for people to help you each time you want to trade.

Liquidity

This is a critical factor that every one that wants to pick an exchange must consider before venturing into it. Liquidity is needed so that traders can trade at anytime without moving the market often. Any exchange that doesn't have lots of users or users with great asset flowing at daily basis is not worth selecting.

Security

This is a factor to be equally consider because if anything happens to the exchange the investors in that exchange are equally affected, so care must be taken in select a secured exchange.

Review your favorite centralized exchange and explain its unique features

Binance was the first centralized exchange I was the first centralized exchange I was introduced to and am currently using I have not been priviledged to try any other one. So for Binance is my favorite.

Binance exchange is one of the leading centralized crypto currency exchange that was found in Hong Kong in the year 2017. It also offers crypto currency trade in more than 500 crypto currency. Exchange from one form of Crypto to the other is very much easy with Binance.

Source

There serveral features Binance is Known for as shown in the screenshot below

• P2p
• Staking
• Binance NFT
• Swap farming
• Refarral
• Strategy trading

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

As a newbie in this exchange market and in the usage of Binance I have not familiarize myself with much of their activities so I may not be able to give an adequate answer to the above question, but I learnt that the minimum amount that can be traded is $10 which about #5000 in my country. This is something that should be looked into because they be people that are willing to trade in my country but can't gather this money at once, and if they should wait for it to be complete they may end up eating the money. So room should be created for trading lower than this amount.

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?

The only thing I see as a challenge to this centralized exchange is the tendency of the exchange being hacked and this is a serious challenge.

My counsel to everyone of us trading with centralized exchange is that we should trade with caution. It would be wise if we have two exchange that is one centralized exchange and one decentralized exchange, so that we won't be victim of anything bad that may happen. It is called putting your eggs in two basket so as not to lose all at once.

I invite @nanya to participate in this contest.