Steemit Crypto Academy Contest / S1W2 – Reviewing Centralized Exchanges by @beniba
It is a pleasure to be part of this week’s contest. The contest basically requires me to give a review of my favorite centralized. In recent years we have seen massive growth in the world of cryptocurrencies. This feet was achieved based on the good roles these exchanges played. I will first start by explaining what an exchange is.
An Exchange is an online platform that allows for the trading of various cryptocurrencies in existence or fiat currency. In other words exchanges serves as a market place where people sell and buy cryptocurrencies. An exchange can either be centralized or Decentralized, for the purpose of this contest I will be dealing with only centralized exchanges.
Centralized exchanges are online platforms where selling and buying of cryptocurrencies and fiat currency occurs and it is owned or managed by a central body or entity. Centralized exchanges are mostly owned and managed by a company.
The exchange operates based on the decisions made by the governing body and all information on the exchange is kept and managed by that governing body. Having said this about centralized exchanges let me know go ahead to highlight some of the benefits of using a centralized exchange.
• Provides crypto users a safe place to keep and safe their assets; every centralized exchange has a digital wallet where one can save his or her assets and can withdraw at his or her convenient time without challenges.
• An avenue to investment; centralized exchanges offers its users the opportunity to invest in crypto currency projects or assets the they feel is promising and worth investing in
• Centralized exchanges are user friendly; almost all centralized exchanges are well designed and structured with a very user friendly interface. This makes them very easy and simple to users even to beginners.
• The speed of transactions on centralized exchanges are miles ahead of decentralized exchanges and hence its one of the benefits of using a centralized exchange.
• SECURITY; I wouldn’t want to trade my asset where I am not 100% sure it well secured. So for the safety of my assets I will check for the security of the exchange.
• LIQUIDITY; liquidity simply refers to the ease at which a crypto currency can be converted to another cryptocurrency. This is key in trading so I will definitely be looking out for the liquidity of the exchange.
• FEES; I will also be looking out on their fees charged for transactions. This will certainly give me the opportunity to choose the exchange with the lowest fees charges.
• AVAILABILITY OF A MOBILE APP; I will personally prefer transacting on a mobile app of an exchange rather than have access on a web browser.
There quite a huge number of exchanges available currently. All of them have their attractive features but I personally choose Binance as my favorite centralized exchange. Below are some of the unique features of Binance.
P2P TRADING FEATURE
For me this is one of the best features on Binance. It is a feature that gives users the opportunity to sell or buy an asset in their local fiat currency. This type of trade occurs between two peers hence the name peer to peer (P2P). The best part of this feature is that there is no fee charge by the exchange for selling or buying. This feature also gives you the opportunity to choose where the money should be paid into, either a local Bank or mobile money services. Anything that happens between the two users except that the asset being sold is been held in escrow till payment is confirmed then the exchange now releases the asset go the buyer.
SPOT TRADING FEATURE.
This is a feature that has over 100 cryptocurrency wallets and trading pairs. With this feature one can buy different assets and keep for investment purposes. You can use an asset say USDT to purchase other assets using the trade pair you want.
BINANCE NFT MARKETPLACE
This is feature of the Binance exchanges that makes it possible for users to buy and sell non fungible tokens (NFTs). This gives the creators of various NFTs the opportunity to exhibit their wok and to sell for financial gains.
LEADERBOARD
It is a connection that exist between social networking and cryptocurrency trading that makes it possible for users to have access to the positions of the best traders on the exchange and hence use as guidance for their personal trade.
CROSS COLLATERAL
This is a special feature on the exchange that allows investors to use their already owned assets as collateral in order to borrow another asset.
I love Binance so I wish it works perfectly without flaws. One aspect which I will like to change on the exchange is the pricing of assets on the P2P market. I will love it if Binance itself will moderate the prices of assets on the P2P market rather than allowing the individuals to solely set their prices. This puts the petty traders in a disadvantaged position because you will have to trade at their rate.
PRIVACY IS NOT GIVEN; in almost all centralized exchanges users are required to go through series of verifications which will enable them have full access to the services of the exchange. This makes it impossible for users to have 100% privacy.
AVAILABILITY OF SERVICES; another shortcoming I have seen is that services are sometimes withdrawn or suspended and users can not have access to these services. Sometimes users have assets that are locked up for time due to maintenance.
SECURITY; Users on centralized exchanges to not have access to their accounts private keys so this for me is a compromise on the accounts of users.
From my personal experience I think the safety of the users funds is a shared responsibility between the Exchange and the user.
On the part of the exchange I will personally advocate that when a withdrawal request is being made a thorough verification to confirm that it is the owner of the account.
On the part of the user he or she should avoiding clicking on links about airdrops from the exchange which do not come from the original website of the exchange. Clicking on some of these links which are phishing sites will give people access to your account.
Binance is known for its low fee cost among all the centralized exchanges you can think off. What I like most about this exchange is the peer-to-peer mode of transaction.
Certainly Binance has the best fees charges
I prefer applications better than websites, I would be happy if eventually Steemit has an app.
Very true, they know the address and identification of every one of their users.
I remember processing the verification procedure with my personal information like my national identity card.
With this feature of Binance I say it's amazing