Steemit Crypto Academy Contest / S1W2 – Reviewing Centralized Exchanges by @salemumar5

Assalam u Alaikum,
Hello and welcome steemians on my post in @cryptoacademy. This post is all about reviewing centralized exchanges and about their users and how much they are advantageous or lacking in some areas. So, let's dig into it and find how deep will we go through,

(1) Discuss briefly Centralized exchanges and its Benefits to crypto users.
(2)What do you look out for when choosing an exchange to trade your crypto assest?
(3)Review your favorite centralized exchange and explain its unique features
(4)Is there anything about your favorite exchange you will like to be changed? Discuss.
(5)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

A place where we buy and sell our crypto assets is known as crypto exchanges. There is not any certain reason available in these exchanges so that you can stick to just one exchange instead, it just depends on your work that which exchange is feasible for you.

One exchange doesn't offer the coin you are looking for but any other exchange does. Similarly, some exchanges are very difficult to use and not beginner-friendly but some not only help you learn trading and other stuff but also have different versions like Binance having pro/lite versions.

Apart from trading, exchanges are also used as wallets where you can save your cryptocurrencies and exchange them with fiat currency. There are two basic types of crypto exchanges, Centralized and Decentralized exchanges.

Advantages and Disadvantages

• Centralized exchanges have fast transaction speed which makes them user-friendly.

• Nowadays, these exchanges use very high-end security protocols which makes them trustworthy among the users.

• Trading ratio is very high in centralized exchanges as they have a relatively high liquidity rate.

• Their vast exchange rate from any cryptocurrency to fiat makes them a very favorable option.

• As they are centralized, they have a backup data setup which is used when any customer lost its private keys or forgets.

Along with advantages it also has many disadvantages which are discussed below,

• Due to a centralized system, it has happened many times that hackers attack the servers, and users' information had leaked multiple times.

• Private keys of users are in the hand of the exchange and not in customers it means that the users have to trust the organization on the security.

• Some centralized exchanges take high transaction fees for their services. The fees depend upon the number of amounts traded so the centralized exchange takes a very huge amount of transaction fees when trading is in greater amount.

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

Volume:

The higher the level of trading volume it is more likely to not get interferred by some kind of market manipulation or lack of volatility. Also, higher trade volume help traders by fast transactions so that they get the deal done on the same price of which they want to trade.

Security:

Security is the most important/crucial aspect as no exchange is safe from hacker's or malicious attacks but some exchanges have very unique and optimized security system which make them more safer and secure. These attacks are the main reason many exchanges have seen a closure and extreme losses.

Customer Care:

It represents the sincerity of a company/organization towards its customer. The more thay are in touch with them the more they will be trusted. Some companies made their customer care services so much complicated that in the end consumer will leave them due to their lack of respect for customers.

User-friendly OR Beginner-friendly:

This particulate can be acheived by making the user interface simple and easy. Many exchanges have very difficult interface and people like to do things with ease and fastly. .

Review your favorite centralized exchange and explain its unique features

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• From the above written qualities, I decided to choose Binance exchange and it is very easy to use and beginner friendly along with it also ranks number 1 Crypto exchange currently.

source

Binance was founded by Changpeng Zhao, a develpor who has previously founded a company built high-frequency trading systems for stockbrokers. Binance was formed in China but later it's headquarter moves to Cayman Islands, Mahé, Seychelles and in 2018, it was the largest crypto currency exchange with a market capitalization of $1.3 billion, although Coinbase gives him tough competition year after year.
Throughout it's tenure, Binance launch only two cryptocurrencies which was developed by Binance itself, Binance Coin (BNB) and Binance Smart Chain (BSC).

Right now, Binance has a trading volume of $19,247,096,020 which stands it on the top of all exchanges.

Unique Features

• Binance has the highest trading volume which process the transactions very fastly. There are more than 600+ crypto currencies listed on Binance and nearly every trustible coin is available for trade here due to which it is much better option. Also there is more than 90 million registered users on Binance from all over the world.

• Currently, there is more than one trading options for user like spot, future and margin which helps the user to get more profit through very less amount.

• Binance offers the safest projects on it's platform and it is nearly no chance ofscam on this platform. It has a very strict procedure for the listing of any coin.

• Another great step taken by Binance is that they have introduced NFT marketplace on it's platform and they also have a program for beginners which is Learn and Earn with Binance on which they allow newbies to learn the specific ways of trading.

• Binance has the lowest transaction fees from all the other exchanges which is nerly 0.1%.

• Another great initiative recently taken by Binance is that they have started live TV sessions or live YT sessions with respect to different countries so that if any customer has any problem so they can discuss with their team and be coordinated.

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

Binance is made with very progressive handing like their UI/UX is very simple and easy to use.

• With the imposition of new regulations against crypto currencies in many countries, recently China ban all crypto's resulting in huge fall in crypto market but the important point is that Binance is been under flak from many countries and it is still faces ban in US so if someone travel to US he wont be able to use Binance there.

From these recent closures, it is very problematic and stressing for its user in different countries that if suddenly binance faces a ban in their countries it will be devastating for them and for binance also. So, there must be a backup plan for this particular situation.

• Another thing is that it's KYC (know your customer) is very time consuming as it needs some detailed review of personal information.

• Also it can be seen more often that Binance faces delayed transactions or some sort of server issues apart from transaction time. I have experience a similar problem when I was transferring my steem.

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?

Today's central exchanges are mostly centralized and they face many threats like they are not very much defensive towards hack's and there servers can be breached or was breached so many times due to loopholes in there system. They are always in danger of high regulatory risks which means that customer who safe their crypto's in centralized exchange wallets can loose them at an instant. Many exchanges are being sanctioned due to their manipulation in market as the transactions are not secured on any decentralized exchange.
Many exchanges faces lack of liquidity. Also this market is filled with uneducated users whichincreases the risk of unwell handling of crypto currencies.

Centralized exchanges keep control of private keys and user personal information and in case of a security breach both can be lost. So, users are advised not to keep their heavy long term investment in centralized wallets instead they keep them in decentralized wallets which makes them more safer.

Conclusion

Although there are numerous positives about centralized exchanges but they also lacks multiple variables of market. Most of the crypto currency trades are going through centralized wallets so traders keep their faith in them along with their money. Regulatory problems are now more and more intense yet the number of exchanges also increases. There easy to use structure makes them more popular among non-professional community but I want that customers must get more power over their accounts like private keys issuance so that they will become more trustible organiztions in future.