Steemit Crypto Academy Contest / S1W2 - Reviewing Centralized Exchange by @simonnwigwe

Hello everyone,
I welcome you to my blog once again. It is a pleasure on my part to be among this great scholars of our time. I must commend the steemitblog for a job weldon in organising this amazing program. We have successfully finished the first week of the engagement challenge and we are currently in the second week. The engagement has really brought steemians closer to each other as we have to read each other article and possible comment on them. Today as part of the engagement contest, I will be reviewing Centralized Exchange.

Before we proceed, let's look briefly on what an exchange is all about. To a lay man, an exchange means given out something to get another. Example you can exchange your rice for yam. I.e if you have rice and your neighbour has yam and then you want to eat the yam, you can exchange the rice for the yam.

To a crypto trader, an exchange is a platform where buyers and sellers meet to exchange their crypto asset to other crypto or fiat. Exchange as we have seen is a trading platform where traders both buyers and sellers meet to exchange their crypto for other crypto or for fiat. It is important to mention here that exchange serves as a middleman between the traders I.e between buyers and sellers of the asset.

In summary, when we talk about an exchange we are referring to a crypto market where the trading of a crypto asset is been done. An exchange helps users to also store their asset as it also serves as a wallet too. So traders can trade their asset in the crypto market. Trading here can be done with crypto asset or fiat.

Basically, we have two different types of exchange platform I.e the centralized exchange and the decentralized exchange. Centralized exchange is a type of exchange the requires a middleman between the buyers and the sellers of an asset. I will be discussing in more details below. Whereas a decentralized exchange is one that does not requires a middleman between the buyers and the sellers instead both buyers and sellers trade directly.

Centralized exchange are those exchanges that are used to trade different type of crypto asset. It is so called centralized because their is a central authority that oversees the entire affairs of the happenings in the platform. Centralized exchange serves as middlemen between they traders I.e buyers and sellers in the platform. The centralized exchange also has an inbuilt wallet where asset can be stored.

It is important to state here that only the platform has a complete access to your asset once deposited, you as the own your asset becomes limited and this is done so that you asset will be completely protected. In case of any fraud or suspicious act, your entire access will be withdrawn from you until a proper confirmation is done by the platform to acertain that it's really you.

Since the private keys of your account is with the exchange, traders and investors do not trust the exchange completely because anything can happen at any time. Hackers always target the centralized exchange because once the have an access that can steal more asset and money. But despite all that, the are some benefit of the exchange to lots of crypto users and I will be discussing few of them below.

a. Centralized exchange platform has a very good security feature in place since they know that they are dealing with the public funds. It is on that note that users access can be sized when ever any suspicious activity is noticed. One of which I see often in binance exchange is the after few days of login in, you will be automatically logged out by the platform so that you can login again.

b. The centralized exchange platform are made user friendly so that any one can navigate through the entire exchange without having an issues. Most of this centralized exchange provides guide on how to perform certain activities on the platform.

c. Most centralized exchange accepts different means of payment and that makes it is for users all over the world. You can easily deposit and also make your withdrawal with easy.

d. Due to the population using a centralized exchange, they normal provide large liquidity which enables traders to trader effectively and efficiently without delay.

e. The centralized exchange also helps users when it comes to account recovery. Take for instance you lost your lovin details, you can easily get it back with the help of the platform since they have access to your private key. It's not the same in the case of decentralized exchange.

As a trader, there a lot of factor to consider before choosing an exchange to trade your crypto asset. In my case, the few things I consider before choosing an exchange to trade my crypto asset are listed below.

a. Security: We are talking about asset here and most times this can be someone's life savings and if security is not taken into consideration the person may die of high blood pressure. It is on that note that I consider security as the first when choosing an exchange. I take a tour to study the history of the exchange and it's security challenges, if it shows a significant reliability, then I will go into it.

b. Liquidity: This is another important aspect I always look out for before choosing an exchange. I always want an exchange that is reliable when it comes to serving their customer in a more fast and efficient way.

c. Customer service: To choose an exchange, I also look at the services rendered by their customer service. If according to the rating, I see people making complains of not been attended to, then I will know that the exchange is not reliable. But if customers are usually attended to when ever there is any issues then I can choose to trade with the exchange.

d. Fees of transaction: I also consider this before choosing an exchange to trade on. If the exchange has high transaction fees I don't trade their because you may end up using the entire asset you are having for just transaction fees. I go for exchange with little or no transaction fees.

e. Type of trading it supports: The type of trading an exchange support is another criteria I use to choose an exchange platform. If the trading those are limited, I don't go for such exchange, I go for exchange with more trading options.

My favourite centralized exchange platform is the Binance exchange platform. I have use the exchange for a year and three months now and I can attest to the fact that it is the best when it comes to serving it's customers. Binance exchange is currently the world largest exchange platform as it allows millions of trade to be carried out on daily basis.

Binance exchange was founded by Changpeng Zhao and Yi He in the year 2017. Binance support spot trading, margin trading and even future trading. Transaction on the binance platform is very fast and effective as well due to the availability of liquidity provided in the platform.

The binance exchange platform has a lot of coins listed in it. Almost all the major crypto asset you may want to invest in is seen in the binance exchange. The market also provides us with lots of pairs to make our trade. The recently added pair that got everyone excited is the pair of STEEMUSDT.

Binance exchange platform has some many outstanding feature that made me choose it as my favourite centralized exchange. This unique features are listed below.

a. Security: The binance exchange platform is very secured and on daily basis more security initiative is introduce just to ensure that the asset of the customers are well secured.

b. Customer service: The customer service of the Binance exchange is very reliable. At any point in time if you communicate them they will give you a prompt response. I remember a friend that shared his story of depositing 70 steem to the exchange with a wrong memo and when he laid the complain within some minutes his asset was credited to his wallet.

c. Low transaction fees and availability of liquidity: The binance exchange platform has very low transaction fees when buyers and sellers are performing any form of trade and the trade is always fast and efficient due to availability of liquidity.

d. Staking: The platform allows customers to earn passive income by staking their asset. In this way you are adding to the liquidity pool and then you are also making a little earning instead of keeping your asset dormant in the wallet.

e. P2p trading: The binance exchange support the peer to peer trading method where a buyer get a seller who is selling at a price he wants before trading with that person.

Yes there is something I will like to change in the Binance exchange platform. In the platform, I discover that you can not trade some asset with less than 10USDT. This means that if you don't have up to 10USDT as you asset you can not trade those asset on the exchange. To me this is not healthy at all because there are people who don't have up to that amount of USDT and they wish to purchase that asset but due to the restriction, they can not perform the operations. So I will like the platform to be open in such a way that you can purchase any pair with as low as 0.5USDT.

Another change I will like to see in the platform is increasing more tokens in the margins trade. You will notice that it is just but a few pair of currencies that are made available for margin trading which to me is not to healthy. They should provide as many pairs as possible just as it is in the spot trading. Also in the aspect of staking, I want more tokens to be added for staking like hive, steem etc.

Well, there are lots of shortcomings when we talk about the centralized exchange. We know that it is always the target of hackers because they believe if the break through a lot of funds can be stolen. More also, centralized exchange are always under the mercies of the government of the country I.e a ban of the exchange can be pronounced at any point in time and they can not do anything about it. It directly means most of their decision are influenced by the government. Another thing is that customers have limited access to their own token and can be restricted from accessing it at any point in time.

To protect user asset, I recommend that a copy of the private key be given to the customer as well this will be done in such a way that they both provides same information, before any transaction a proper verification should be done before the transaction will be carried out, in that way, users asset will be completely protected.

The importance of exchange in trading can never be overemphasised. They truth is that without an exchange, crypto trading would not be possible. The centralized exchange as I have explained earlier deals with a third party for it's operation to be complete. I have also listed some factors that I believe users should always consider before choosing an exchange to trade on.

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