Steemit Crypto Academy Contest / S1W2 - Reviewing Centralized Exchanges by @huzaifanaveed1 || Club 100

It's after a long time that I am back to the community where it all started for me. The Steemit Crypto Academy. I have learned a lot from this place. But this time I'm not here for any assignments, instead the Steemit Engagement Challenge which was initiated two weeks ago.

I wasn't able to take part last week, but I couldn't have let go the oppurtunity this week. So today, I'll be writing on:

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REVIEWING CENTRALIZED EXCHANGE

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Before getting down the bottom of Centralized Exchanges, it is important to know what Centralized Exchanges (Cex) actually are. It's important to know the types of exchange we have in the Crypto World, ie, Centralized Exchanges (Cex) and Decentralized Exchanges(Dex) their importance and the differences between them.

Before we differentiate between Dex and Cex we'll need to have an idea of what Cryptocurrency Exchanges actually are?

An exchange is a platform which gives you an option of saving your crypto in a built-in wallet in the exchange application as well as trade your crypto assets in exchange of fiat currency such as; Dollars, PKR, Euro etc. At this moment, there are approximately 400 crypto exchanges available.

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TYPES OF CRYPTO EXCHANGES:

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There are two types of exchanges available in the Crypto Market:

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• Decentralized Exchanges:

Decentralized Exchanges (Dex) are not controlled by a single entity or a company but run by different people so that there could be no chance of centralizing the application. There's not a need of Intermediary on Dex and the exchange could be done directly peer to peer.
Example: Uniswap

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• Centralized Exchanges:

Though the main aim of the Crypto Market was to get rid of the decentralization that we observe on daily basis in banks and corporate sectors, Centralized Exchanges (Cex) are still the most popular all over the world. Centralized Exchanges are owned by a central entity which controls the exchange application. Majority of the crypto exchanges are centralized
Example: Binance

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Now that we have a clear idea of the Crypto Exchanges and its types, lets move on to the requirements of this challenge as asked in the post.

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Centralized Exchanges and its benefits to Crypto users.

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A centralized exchange is a platform in which you can trade your Crypto assets in return of Fiat currency such as Dollars, PKR, etc. Not only that, on CEX, you can also trade between crypto assets in the Market according to the current prices of the assets in the market. There is also a P2P service available on Centralized Exchanges, through which you can buy and sell your assets with the exchange working as a mediator. Through this the exchange earns in commissions.

But, Centralized Exchanges are extremely vulnerable. There have been a lot of cases in the past in which a Centralized exchange was hacked and the users had to face hefty losses. Apart from that, since it is controlled by a single entity, you are not really in charge of your assets. It's like a thought in the back of your mind which messes up with your sleep. But still, if you compare its advantages and disadvantages, you'll be satisfied with the benefits that it brings to you. I'll be discussing some of them below.

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Benefits of Centralized Exchanges

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• Accessibility:

This will always be the first benefit of Cex for me. Centralized Exchanges are very easy to use. You can easily trade in the market, be it spot or futures. You can have P2P transactions easily and save your assets in the wallet.

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• P2P Trading:

Another huge benefit of Cex is their easy P2P trading in which the platform itself works as a facilitator and helps if there's any conflict between the buyers and sellers. Till now, I have always been satisfied with the P2P transactions.

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• Good Security:

Though, nothing in this world is fully protected, still the Centralized Exchanges have robust security mechanisms which helps the users to have their assets safe.

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What do I look for in an Exchange?

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These things differ from user to user. While some prefer good security, some like to have an easy trading market. I'll share my preference.

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• Security and Reliability:

The first and foremost point while choosing an exchange for me would be the security that exchange is providing to its users. I mean, what's the use of having different platforms if you're not sure whether you'll be robbed or not? There's no point in living in constant fear.

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• Trading Market:

I need a good, easy-to-use and an updated trading market which provides the best rate. There should be addition of new assets as soon as they are introduced.

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• Transaction Fee:

Who wouldn't like to have a low transaction fee on their trades and exchanges? For me, it's a key factor while looking for an exchange.

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• P2P Trading:

It's important for an exchange platform to have trusted users on the P2P market, with good ratings. Apart from that the platform should itself meditate if there's any conflict between the buyers and sellers.

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My Favorite Centralized Exchange

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I have used many Cex but I'll review the one I use the most and I like the most:

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BINANCE EXCHANGE

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_Binance

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Running smoothly since the past 5 years, Binance is one of the most widely used CEX in the world. Binance has a lot of features, but before we get into that let me introduce you to binance own currency which goes by the name of BNB and is currently ranked at 5th at Coin Market cap.

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_Cmc

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Features of Binance

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There are a lot of Uniqe features of Binance which makes it extremely easy to use. I'll be listing some of them in this article:

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• The Market

Binance has a huge market in which you can find almost every coin. It has an algorithm in which the top most coins are listed rank-wise. Apart from that, all the newly listed coins are available on Binance as soon as they are released. There are Top Gainers and Top Volume coin category available through which you can contemplate on your trading decisions.

Apart from the crypto assets, there are all types of markets available on the Binace Marketplace which includes:

• Spot Market

• Futures Market

• New Listings

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_binance

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• Trading:

The next best thing on the Binance Platform is the Trade section in which you have a lot of trading options, which include:

• Convert: in which you can convert your asset into another

• Spot Market: in which you have a lot of technical help provided by the platform, such as; indicators

• Margin: in which you can do leverage trading and earn big profits

• P2P: in which you can cash out your assets in fiat currency.

• Swap Market: in which you can swap your assets into BUSD, USDT, BNB, BTC ETH.

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• Secured Wallet:

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To my experience, till now, I am quite satisfied with the security Binance has been able to provide. Furthermore in your spot wallet you also get a daily Profit and loss amount as well.

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Any changes that I'd like to see on Binance?

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Yes, there are a couple of changes that I'd like to see on Binance and they are:

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• Transparency:

Binance is controlled by a single entity and this has raised many questions in the past as well. Apart from that it is also prone to hacking which we have seen a few years back. So this is one of the things that I'd like to be changed.

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• Transaction Fees:

Honestly, it's just demoralizing when you have to make a transaction and a chunk of your money gets cut in the transaction fees. There are many more CEX which charge way lesser than binance.

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• Minimum Exchange Requirements:

Yes. Binance only lets you trade or exchange an assets as long as the minimum value is more than $10 I'd like this feature to be changed as well.

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The Shortcomings of Centralized Exchanges

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• We're Exposed:

I'll explain how. Centralized Exchanges such as Binance ask for your verification to be able to use the platform. The verification consists of our face picture, out address, contact number and basically everything. This troubles me a lot. We all know for a fact that the governments are involved in Centralized Exchanges like this. So it's like you are completely in the open and the agencies can track you and your assets whenever they want to.

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• Prone to hacking:

The only thing that's stopping the hackers from looting your assets are the private keys. Hackers have in past as well breached the security of Centralized Exchanges. So in my opinion this is a huge shortcoming.

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CONCLUSION

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An interesting topic in which we noticed a lot of diversity by different users. Everyone had their own preference in their favorite CEX. Similarly, I reviewed Binance in which I have discussed everything in detail. I hope you had a good read. For this contest I'd like to invite my friends @wajihasheikh @naqshraja1 and @maazmoid123.
Thank you.
Regards
@huzaifanaveed1

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Ps: all pictures have been sourced accordingly.

cc: @reminiscence01

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