STEEM user base is ripe for a Centralized Exchange

Developers Must Build a Centralized Exchange

Steemit Market

We have a Steemit Market, but that is only good for small volume trades between Steem and SBD. Have you ever looked at the large transactions? They never use the Steemit Market. They can't use the market. They also can't trade against other currencies. They are forced to take the large sums of STEEM and SBD offsite to a real exchange. Those exchanges are taking fees that profits the exchange. Steemit doesn't benefit from these large trading volumes. I've also seen the Steemit market manipulated by large transaction to affect price which can negatively affect users trying to use the market.

BlockTrades

This is not a solution either due to high fees. BlockTrades is an Over The Counter (OTC) exchange. It will never compete with a real exchange and no one uses it for very large transactions.
Both of these trading options have their place, but there is a massive vacuum where a Steem Exchange should be.

The Fix

I propose that the Someone build and operate an exchange. The Steemit Market can remain just like it is to cover small volume trades between STEEM and SBD. BlockTrades can remain just like it is to handle simple OTC transactions. The Exchange would work on a virtual currency system just like other exchanges use. One can transfer STEEM or SBD to the new exchange before trading takes place. That will fix the transaction speed issue from drowning the Steemit Market and provide another option. The exchange will also need to include other currencies. This would fix the volume issue and add revenue. Let's also give multilingual options. Open this up to the rest of the world. German, Russian, Spanish, French, Chinese, Japanese just to list a few.

This exchange can charge a tiny fee on trades just like any other exchange, then they can generate revenue. Exchanges are highly profitable by doing this. Trades between STEEM and SBD can remain free as there is no cost to transfer STEEM and SBD. STEEM will also be a primary trading pair which will boost STEEM as a popular world currency. By adding other currencies and charging trading fees, they create a source of new revenue.

An exchange will bring in new users to this platform. Other major exchanges have around 10 million users. Binance has exceeded this in less than a year. Steemit is over 2 and half years old and barely broken 1 million users. If Steemit Inc runs an exchange, this will create an avenue for Steem Exchange account users to become Steem account owners. The amount of visibility to this platform would be enormous. Value would be added to Steem platform as the value is expected to follow Metcalfe's Law. This is an exponential value prediction that Facebook closely resembled in which value is expected to increase by 4 times for every time the number of active users doubles. STEEM is expected to follow Metcalfe's Law.

In conclusion:

1. Whoever creates the exchange can profit massively from running an exchange. This would support operations even when the price of STEEM is down.
2. Make STEEM and SBD a common trading pair with everything else. This doesn't exist and would make STEEM a powerful currency like Bitcoin and Ethereum.
3. A STEEM central Exchange will bring in huge numbers of new Steem. users. This would provide STEEM dominance with all the other competition emerging and grow value.

The best part is:

1. The exchange creator will already have a STEEM user base ready to go and start using. There is no need to worry about getting people to adopt the new exchange.

If you ever thought of creating an exchange but worried that it wouldn't get adopted, a STEEM exchange will give you the edge to be successful. You will also have SMT options in the future to trade in your exchange that the other exchanges won't have. This will be an enormous advantage for your exchange.

---------------------------------------

For a breakdown of how Steemit Rewards system works:

https://steemit.com/steemit/@socky/simple-steemit-rewards-breakdown-how-it-works-since-hf20

For a breakdown of Steemit Keys:

https://steemit.com/life/@socky/do-you-understand-your-steemit-keys

For a breakdown of why Steem Power is Important:

https://steemit.com/steemit/@socky/why-is-steem-power-important-beginners-read

How to improve STEEM payment system:

https://steemit.com/steemit/@socky/introducing-the-hand-shake-and-how-it-can-revolutionize-steem-blockchain