Steemit Crypto Academy Contest / S1W2 - Reviewing Centralized Exchanges by @chairulrizalx
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Hello Everyone
I'm @chairulrizalx, and this is my first post following the Steemit Crypto Academy in Season 1 Week 2, in the previous week I couldn't follow the homework given because I didn't read the deadline, and this time I will complete the task given in this second week by following the rules set by the Steemit team.
Discuss briefly Centralized Exhchange and its Benefits to crypto users.
Centralized exchange is a type of digital exchange that is popular among traders and investors who have been in the world of cryptocurrencies and digital stocks for a long time. A centralized exchange is a platform for buying and selling cryptocurrencies and digital assets set up by a central organizational company to provide a meeting place for traders, investors, and owners of digital coins or crypto tokens who wish to sell or buy them.
Centralized Exchange or CEX most often provides cryptocurrency trading facilities between users by managing purchases and sales in the Order Book made by each user who transacts with this centralized Exchange. This platform uses a system where every order from a seller or a buyer is matched according to what is in the current market, if the trade made matches the conditions in the market, the transaction will be executed.
Centralized Exchange (CEX) is also often used by users who want to buy crypto assets using fiat currency because almost all centralized exchanges provide fiat currency deposit features, such as Indodax, one of the Centralized Exchange from Indonesia that provides deposits in IDR fiat currency. This is what makes the adoption of CEX more widespread to the general public compared to the use of Decentralized Exchange, although it has advantages due to its popularity, often CEX also has disadvantages that DEX does not experience.
Advantages of Centralized exchange (CEX):
1). Have higher trading volume compared to Decentralized Exchange.
CEX is the easiest choice for beginners who are new to the cryptocurrency exchange market if its features in it are easy to understand.
2). Have high liquidity.
With many users, the liquidity is even higher, which makes CEX more capable of fulfilling its obligations.
3). More popular than Decentralized Exchange (DEX).
CEX is easier to recognize because it is owned by a centralized company, where they promote on social media and others to introduce it to the public massively, in contrast to DEX which is only promoted on certain media such as Dappradar.
4). Become a trading place for Fiat currencies and cryptocurrencies.
CEX makes it easy for users who want to make transactions in the cryptocurrency market by providing an exchange feature using fiat currency.
5). Has high functionality.
Functionally sometimes CEX has many features in it that DEX does not have, such as Orders, Stop Loss, Stop Limits, and others.
What do you look when choosing an exchange to trade your crypto assets
There are several things that we have to pay attention to when choosing an exchange platform to trade, I think what we look for in a cryptocurrency exchange is high network security, features that suit traders, high liquidity, and also high functionality to meet the needs traders.
1). High network security
It the importance for every exchange platform to have a high-security system to provide a sense of security to its users, by prioritizing security will make traders not afraid of losing or having their assets stolen by cybercriminals when using the exchange platform.
2). High liquidity
The exchange platform must have high liquidity because it is needed by cryptocurrency exchange users, with high liquidity our transactions will be faster to execute, and it is very necessary to avoid the high volatility of cryptocurrencies.
3). High functionality
With high functionality, users will feel that their needs are met by the exchange platform, such as exchanging with fiat currency in certain countries will make it easier for users who want to cash out their assets with fiat currency according to their country of origin.
Review your favorite Centralized Exchange and explain its unique features
I still haven't had too many cryptocurrency exchanges because I'm looking for one that fits my needs, here I chose Indodax as my favorite exchange platform because, in terms of functionality, I think it can meet the criteria I'm looking for from a cryptocurrency exchange platform.
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sourceI chose this platform because it is ISO verified and already has a registration certificate from BAPPEBTI (Commodity Futures Trading Regulatory Agency) from Indonesia and is also supervised by OJK (Financial Services Authority) from Indonesia.
Indodax provides a cryptocurrency market with IDR pairs that makes it very easy for me to make transactions using fiat currency because not many exchange platforms provide the IDR fiat currency exchange feature. For novice users like this, it is very profitable because the profit we get from the results trading in the cryptocurrency market can be exchanged directly for fiat currency IDR.
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Is There anything about your favorite exchange you will like to be changed? Discuss
In my opinion, Indodax with all the features in it is very proportional to be used by beginner and professional traders, some things that can be changed maybe in terms of the user interface on the website that is still very common and less attractive to new users to use it, when compared to the platform other exchanges whose user interface is more attractive to new users.
The feature that I want to change from Indodax is a cheaper withdrawal fee, for traders with limited capital like me, it will be more efficient if the withdrawal fee charged is even cheaper, with users who have so far reached millions, in my opinion, the fee charged is still expensive, and it is clear that the exchange takes large profits from every withdrawal made by traders.
Reducing withdrawal fees will lure users with small capital to use Indodax, and more users will register to become members, because most Indodax users or traders in Indonesia come from traders with small capital and beginners who are still just learning to trade.
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 key?
Shortcoming on a centralized exchange, in my opinion, the most commonly felt by users is that user data is not fully controlled, because it is managed by a centralized company specifically by the owner of the exchange platform, things like that give users doubt when compared to using an open Decentralized Exchange in general.
Even though on a centralized exchange the user does not have a private wallet key, but the security system provided by the centralized exchange company in my opinion is considered safe to protect our funds from cyber theft, they have told us how to keep user accounts secure and indicate unsafe accounts.
On the exchange platform that I use called Indodax, every transaction made will ask for confirmation of the user's email and 2FA to confirm the transaction. In my opinion, this is considered safe because we can control transactions that are not carried out.
Make sure when logging in using the official website of the exchange platform it is not from a phishing website link, create a password with a combination of numbers, lowercase letters, symbols, and uppercase letters, then Install 2FA (Two-factor Authentication) to be more safety.
Conclusion
Centralized Exchange is commonly used by traders who want to buy crypto assets using fiat currency because almost all centralized exchanges provide fiat currency deposit features, this is what makes the adoption of Centralized Exchange more widespread to the general public compared to the use of Decentralized Exchange, although it has advantages due to its popularity, often Centralized Exchange also has disadvantages such as expensive withdrawal fees.
I am interested in reading your post @chairulrizalx, because it is very useful and easy to understand by all people, I also use the centralized exchange that you discussed for trading👍🙏
well, thank you for appreciation to my post.
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