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

It's beautiful that we are already in the week 2 of this contest. I am @camzy and without wasting time, I will dive into the task below.

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There are two types of exchanges - centralized and decentralized. Centralized exchanges allow you to access your trade history and make transfers, while decentralized exchanges depend on the reliability of their peers’ machines.

To help facilitate trade, some exchanges accept digital payment methods or back transfers. They also serve as a middle man for regulating transactions. Exchanges may have in-built wallets for storing cryptocurrencies and depositing and withdrawing to other exchanges.

Likewise there are digital wallet, A digital wallet is a storage space that only holds cryptocurrencies, while an exchange is for trading cryptocurrency or converting them to fiat. Exchanges allow people to buy and trade cryptocurrencies at the same time.

Discuss briefly Centralized exchanges and its Benefits to crypto users.

Centralized exchanges are the only type with safeguards and protections. The exchange's reliability increases with its reputation, but there is always a point of vulnerability. Work behind these crypto marketplaces makes them more appealing to users, and many come with a lot of features that attract newbies and pros alike.

Centralized cryptocurrency exchanges are involved in the market by connecting the buyers and sellers automatically without one party getting to know another. These exchanges use a proprietary order matching engine, which adjusts trading speed to each customer’s trade volume.

Centralized exchanges allow you to deposit cryptocurrency, are protected by the exchange, and require that cryptocurrencies be deposited before being traded. They have total access to their assets and can block suspicious users from accessing their funds. without consultation of any customer as they own the full right

There are a few steps that require completion before a coin is listed on a decentralized exchange. The exchange will use the information gathered to decide if the coin is allowed to be listed in their system or not. You might need to give additional information, like team members and company addresses.

BENEFITS TO CRYPTO USERS

• They are easy to understand and use. for example If you're not too familiar with trading platforms, a centralized exchange like Binance also has tutorial videos to help users navigate the platform.

• If you forget your password, some exchanges will allow you to reset it using your email address and phone number. Withdrawals are typically restricted after a password is reset compared to decentralized exchanges.

• Centralized Exchange offers multiple methods of payment, like credit card, bank transfer, and cryptocurrencies for fiat.

• Due to the margin and futures features, lots of trades happen on centralized exchanges. This combines with an order book to create more insightful designations.

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

There are a few things I look out for added to the fact I dont use so much centralized exchange but before I embark on the follow qualities must be there

• Security:
  I check how secured the exchange is based on past experience and information from users who have used the exchange before. I wouldn't like to be the first to avoid stories that touches the heart.

• P2P METHOD:
  I really love the P2P system because cryptocurrencies has a lot of regulations in my country so I would first ensure that the exchange has this feature because that's the fastest and easiest way to change crypto in my country.

• Liquidity
  I trade on popular exchanges so I can access a large user base of buyers and sellers who make trading more accessible. I also invest in liquid digital assets such as bitcoin to ensure it is easier for me to sell them at a later time. so exchanges that can offer me this will be a great choice.

Review your favorite centralized exchange and explain its unique features

In simple terms my most loved and favorite centralized exchange is the BINANCE and I will be reviewing it and giving some features that I feel is unique

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Binance is a worldwide cryptocurrency exchange that was created in Hong Kong but was then moved to Malta due to China's policy on crypto

Binance helps its users by providing liquidity and by charging low transaction fees for their service. Binance is also a secure, reliable crypto exchange with a DEX for easy trading.

Amazing Featues of Binance

• P2P
  Like I said earlier that due to restrictions in my country, this is what I look out for in any CEX. Users in Nigeria can use this peer-to-peer system to buy and sell coins. Binance escrows the trade, and there's no fraud as long as you follow the rules; that is, only release assets after the payment has been confirmed. Users are to pick the best price that suits them and commence trade with all honesty.

screenshot from binance

• Wallet
  Binance provides a space for storing our cryptocurrency assets. You can store the assets before trading on any of the platforms or you can store them long term. There are different types of wallets that you can use, such as spot wallets and others. here is where we get the deposit address as well as the withdrawal address. You can also transfer funds from the spot to funding, to futures etc.

screenshot from binance

• MARKET PLACE
  Different trading platforms and trading pairs are available on the centralized exchange, Binance. Binance has spot trading which allows users to buy currencies with other assets quickly. This trade is done right away when the buying or selling price of cryptocurrency matches the trading price. This type of trade uses pairs for trading and an example of a trading interface can be seen below. There are many coin pairs in their numbers all listed in binance. every user has to set his limit or buy at the market price.

screenshot from binance

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

So far there isn't really much I would like to change on binance except the fact that there is no STEEM/USDT pair and this has forced me to go through HUOBI-PRO once in a while.

If the STEEM/USDT pair can be added I can't imagine how I would love them less because this is the major traffic of my crypto currency experience.

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

No one is safe from being hacked and the possibility of another attack is always present. Phishing will expose our centralized exchanges to risks, so we need to be mindful to protect our account always. It is advised to enable 2FA for more security on centralized exchanges.

One of the main problems I have with CEX is that they don't provide safe storage for users' data and their performance tracking system isn't very effective.

HOW TO PROTECT USER FUNDS

The security of the user accounts is very important. To ensure the safety of the funds, it is important to have proper storage of the users fund and to provide for additional measures for withdrawal (multiple-factor authentication, etc.). Besides that, it is also crucial to safe guard the security of your account.

CONCLUSION

Centralized exchanges can handle more than one type of coin, unlike decentralized exchanges. Centralized exchanges are easy to use. Some downsides include poor customer service due to delays and pump-and-dump scams