Steemit Crypto Academy Contest / S1W2 – Reviewing Centralized Exchanges by @steemdoctor1

Hello everybody.

I hope that all of you will be good an happy and enjoying your good health with the charming days. Today, I am here to participate in the Weekly Engagement Contest Week 2. Today, my participation is in the SteemitCryptoAcademy and the topic of discussion for this week is Reviewing Centralized Exchanges. So, let's start the task without any waste of time.

_{Image Created By Canva}

As we all know that this is the era of cryptocurrencies. Cryptocurrencies are digital assets that cannot be seen but can be used for various purposes including marketing, payments, shopping, etc. As there are markets in our daily life where we exchange currency with other goods, similarly, there are some platforms where the cryptocurrencies are exchanged with each other. Those marketplaces are actually known as Crypto Exchanges. Users can exchange, store, and trade cryptocurrencies there.

There are actually two types of exchanges, the Centralized and the Decentralized Exchanges. Decentralized Exchanges are those in which the assets or funds are under the control of the users completely, instead of the central authority. While Centralized Exchanges are totally different from Decentralized Exchanges. Now, we will discuss the Centralized Exchanges in detail.

---

Centralized Exchanges

---

As the word 'Centralized Exchanges' shows itself, these are the exchange platforms where there is a proper central unit that controls all the activity of the platform. There is a company or group that owns the centralized exchanges and acts as the central authority to control and manage the transactions (buy or sell) that are happening in the exchange.

Actually, centralized exchanges are less secure and safe than decentralized exchanges. The users have to trust the company that holds their funds and processes the transactions by using the mechanisms that are used by the platform. The transactions are verified and approved by the central authority.

Benefits of Centralized Exchanges

There are many disadvantages of centralized exchanges as compared to decentralized ones. But besides them, there are a lot of benefits of the centralized exchanges that are discussed below.

• The scalability of the centralized exchanges is very high as compared to the decentralized exchanges. This thing helps the users to make efficient and fast transactions.

• The centralized exchanges have high liquidity and thus the transactions that are made in them can be easily and efficiently processed.

• Another benefit of centralized exchanges is that these exchanges have high transaction volumes.

• The most important benefit of the centralized exchanges is that users can buy and sell their cryptocurrencies with fiat money easily.

• The users can contact the company or the management time at the time of any inquiry as the addresses of the team/company are mostly visible and easily available.

• Another benefit of centralized exchanges is that they are very simple and thus very easy to use.

---

Things to look out for when choosing an exchange to trade crypto assets?

---

In the above section, I have mentioned the benefits of centralized exchanges. By keeping in view the above points, I will look out for some features for exchange while selecting it for my trading purposes. These points are discussed below.

• The first and the most important point is the security system of exchange. As we have to put our money in the exchanges, so we should try to choose those exchanges that have high-security systems so that our assets could be safe.

• I try to choose those exchanges that provide trade between the fiat and the cryptocurrencies so that we can easily buy and sell the crypto assets whenever needed.

• Another important point here is that we should choose an exchange that has high liquidity and scalability so that we can make fast and efficient transactions.

• I will warmly try to choose that exchange that has low transaction fees so that I could be able to make cheap transactions.

• Another thing that I will consider while choosing an exchange for trading is that I will try to choose that exchange where there is complete support by our country so that I could claim the management in the time any hurry.

• I will choose that exchange that offers reliable and proper contact between the users and the company/team. In this way, we can contact the team easily if we have made any mistake by chance.

• Another thing that I will consider is that I will choose that exchange where there are more trading pairs for a single cryptocurrency. For example, If I want to trade STEEM then I will try to choose that exchange where more pairs for STEEM are available.

---

My Favourite Centralized Exchange

---

My Favourite Centralized crypto Exchange is Binance because of its golden and unique features among all the other centralized exchanges. Now, we will discuss some important points about the Binance exchange.

• Introduction and History:

_{Image Taken From}

Binance platform is the most successful and the biggest crypto exchange of the time. It is actually a centralized exchange that was developed in April 2018 by Sir. Changpeng Zhao (a Chinese-Canadian Bussiness Executive) in Hong Kong. Thanks to him for developing such an amazing crypto exchange that is now trending among all the other exchanges of the time.

Mainly, the Binance exchange supports the altcoins including the world's largest cryptocurrencies BTC, ETH, TRX, ADA, DOGE, etc. The Binance Exchange has also its own coin that is known as BNB (Binance Coin). The BNB coin is also present among the top 10 cryptocurrencies of the time because of its relation with the Binance exchange. The Initial Coin Offering of the BNB coin was held in July 2017. Since that time, the BNB had many times touched the high peaks.

• Ranking and CoinMarketCap Info:

On exploring the Exchange menu of the CoinMarketCap, I found the below information on the Binance exchange.

_{Binance CoinMarketCap}

The gained information can also be expressed in the form of tabular data as follow.

Exchange Name	Binance
Rank	01
Score	9.9/10
24h Volume	$18,510,772,992
Average Liquidity	851
Weekly Visits	21,908,745
Markets	1680
Coins	393

From the above data, we can see that the Binance exchange is the most successful and the biggest crypto exchange of the time.

Unique Features of Binance

There are some unique features that distinguish the Binance exchange from all other centralized exchanges of the time. These features are discussed below.

• For Security Purposes:

To ensure the security and safety of the users' assets, the Binance platform uses the 2FA verification by authenticating from the set mobile number, and e-mail address as well. In this way, the users can make their assets private and secure.

• Referral Program:

Another unique feature of the Binance exchange is that we can refer our friends and earn up to 40% of any of the trade executed by the referred friends.

_{Binance Reffral Program}

• Staking Rewards:

Another very unique feature of Binance is the staking system of the Binance exchange. Now, users can stake their coins or tokens in the liquidity pools of different tokens and earn very good rewards in return. Users can choose the pool of their interest according to the APY%.

_{Binance Locked Staking}

Users can also stake their crypto assets in the liquidity pools in the form of crypto pairs. The rewards of this staking is also extraordinary.

_{Liquid Swap Staking}

• Leverage and Margin:

Another interesting and beneficial feature of the Binance exchange is that users can enjoy up to 125X leverage in future trades. This is so much impressive and beneficial for the traders as they can manage to get good profit by executing trades with higher leverages.

_{Leverages and Margin}

---

Other Amazing Features of Binance

---

• The Binance exchange is now offering the NFTs marketplace where the users can sell and purchase the NFT collections.

• The P2P feature of Binance exchange is so much helpful for the traders as it supports almost all the fiat currencies. Thus, users can easily purchase and sell different cryptos there.

• Almost all of the successful and the most rated cryptocurrency coins and tokens are available on Binance with a number of useful and powerful pairs.

• The layout and all the features of the Binance platform are very simple and easy to use for the new users.

---

Things that I would like to be Changes in Binance

---

There are some things that I would like to change in the Binance exchange. These are as follows.

• At Binance, users can execute any Spot trade of a minimum of 10$. I think the minimum limit should be reduced so that more and more traders can enjoy trading with their small funds as well.

• While creating an account on Binance, some users face issues while verifying. Some fail while verifying their identity while others are also facing issues with facial verification. Moreover, the verification time is also so huge and it needs reduction.

• Sometimes, the withdrawal and the deposits of various tokens and coins from outside resources got suspended and this thing causes many difficulties for the users. This thing also needs improvement.

---

Shortcoming of Centralized Exchanges

---

Now we will discuss the drawbacks of centralized exchanges. So, have a look at the below points.

• The main problem with the centralized exchanges is understood well, it is security issues. The users do not own the private key of their wallet that's why they have to trust the company in order to put their money in the exchanges for storing, trading, exchanging, etc.

• Just like the Binance exchange, all of the centralized exchanges have to adopt the 2FA verification system while logging in or transferring the funds.

• The private keys of all the accounts are stored in the central controlling unit so there are more chances of hacking or stealing.

• In short, we can say that the centralized exchanges could perform extraordinary if they have a high and unbreakable security system.

---

---

Conclusions

---

Centralized exchanges are those crypto exchanges that have a particular central controlling unit. The users of the centralized exchanges do not have complete access to their funds that's why they have complete trust in the company of the centralized exchanges.

High Scalability, High Liquidity for transactions, High speed of processing transactions, P2P Trading, and Contact of the team or the company are some major benefits of the centralized exchanges while the main and I think the only problem with the centralized exchanges is the issues of protection and security.

---

I would like to invite my friends @malikusman1, @alihussain07, @msquaretwins, @msquaretk, and @badmus-official here to participate in this amazing and superb contest.

---

Participant: @steemdoctor1

---