I hope everyone is getting along well. February (2020) was a difficult month for crypto, and March has started with an attack on STEEM that seems to be... invoke conspiracy theorist within... a coordinated effort, not indirectly connected to Justin Sun's entry, there were 2 ddos attacks on exchanges last week, a huge foul-up from the leadership at FCoin leaving a few tens of thousands of users furiously fighting for their piece of -$130 Million, and today Robinhood in the U.S. has an unannounced, not-updated system wide outage. 

I've spent the majority of the past 6 months day trading. Second on that list has been the accounting for all of that trading, of which I successfully profited from well over 1100 trades- all manual! The third most time-consuming work I've done? Looking for new exchanges. Yeah; it's ridiculous.

I will be the first to say, that I prefer self-regulation and communities looking out for one another, and hitting the social media aggressively when someone does us wrong... all of this over government regulation, AML/KYC and the sort. 

Attacks, hacks, ransom... it all hits the industry hard. But, there is a great deal of security, and a lot of untapped security measures available to exchange owners that often, they do not factor in as part of their expense.

CZ is the most outward, most connected, recognized, and respected leader in exchanges, heading Binance with a strong presence. Most people trust him and their platform. The haters are mainly people who either do not trust anything big and successful (too much money automatically classifies leaders as the bad guy bankers even if they are on the same side), they lost a lot of money on a crap coin on the platform, or they aren't allowed to trade there. I'm not saying this in Binance's defense; look at the title of the article! In fact, it speaks volumes that the best options tend to be Binance, or one of the over-priced alternatives with 1/2 the volume.

I personally believe that one of the main reasons CZ is succeeding is because he acts like a grown-up. When it comes to crypto, there's a strong younger crowd, and the more time one spends on cryptotwitter, the more they will see the youthfulness. It is fun and refreshing, but also alarming how much of the commoner's money in crypto is from those who are under-educated in finance and economics. Even worse, there are so many young superstars leading coin projects and exchanges who also need to learn about money, while being handed millions of dollars in investments and billions of dollars in client crypto.

It is truly a financial revolution in process, but it does need better leadership, and it seems the self-proclaimed thought leaders mostly understand what they hate about everything that is not crypto. While the central banks are a problem... anyone notice that a lot of popular coin economy has similar issues to printing more money? That's why scarcity is so critically important to good design. But, let's move back to the main topic now that the atmosphere groundwork is set.

Exchanges. This is where we can lock in our buys and sells and decide our tiny piece of the future of crypto.

Most people are at one polar extreme or the other. Either HODL in a private wallet with owned keys, HODL via a DEX using again, one's own wallet(s), or trust a favored exchange.

There are issues with all options, whether hardware or software. Programs are written by coders, and we know very little about most of them. Things seem to mostly work most of the time. The biggest issues are usually maintenance and timing, and when there is a change, fork, or upgrade for a major coin, it usually goes fine. We're all mostly fine, but who knows if there are sleeping time bombs nobody has noticed buried deep within the code? As for the exchanges, the primary coding involved is not vastly different from what any of us could do as a side project using all open source code.

Linking addresses to and from whatever storage, a matching engine based on proper math, zendesk, security from mostly 3rd parties (yeah, a BIG problem for hacks), account software for orders and history... it isn't simple, but it is all easily repeated aka not needing to reinvent the wheel.

Most things needed to launch an exchange can be white labeled, and now most people know this because CZ made their "launch your own exchange" program public last week, and a few others, I think KuCoin being one, launched the same announcements.

People who do not trust centralized exchanges like Binance have a good reason. It flies in the face of the earliest ideals of crypto, that one must not rely on any 3rd party. The reality, is that this ideal truly has no reality. Blockchain refines the issues that cause concern over 3rd party platform control and intervention, but privacy and safety still remain just as big, if not a bigger concern than regular finance. In many cases, a person is in better shape with a truly trustworthy 3rd party, than the risks involved in poorly executed exchanges in DEX and swaps.

All of these things are going to improve with time, if things don't implode. But, let's address a few things in DEX and centralized.

First thing, trust:

If there is a DEX platform, they took the time to spend money and resources to bang together the code that you didn't do yourself. Otherwise, you could find a way to connect to other invisible accounts yourself and agree to trades at certain prices. This hardly works because most of us have no idea how to code and the others don't know the strangers to connect with. Just like social media, we all interact with the internet through portals owned by other companies. DEX is no different, it simply removes the responsibility and liability of controlling the funds for you, leaving you up the creek without a paddle if you screw something up. Bad volume means that many transactions get canceled and you miss market movement. The whole point of an exchange is to improve these things for you.

This really isn't the "DEX vs. Centralized" article. That's for another day. But, the fact that it requires an interface that is coded by a 3rd party, and largely provides very low liquidity, means DEX does not dramatically move the crypto world closer to mass adoption. We'll get there by the year 2525 at the current rate.

Centralized exchanges prove the FUD with poorly announced issues, hacks, and often faked volume. These things just ain't good. In fact, Binance, largely the most trusted 3rd party in crypto, has had their Zendesk hacked, has had more than 9000 BTC stolen from their own wallet, (no user funds affected), and have had their KYC held for ransom, exposing ALL of those I.D.'s, names, addresses etc to the dark net. Yet, everyone is fine with Binance. THAT is what strong leadership does for people's confidence. They survived these things. Who knows what the real impact of personal data breaches will be? We simply don't know yet.

Here's a few observations I've made:

Every time I search far and wide for better exchange options, I end up on their Twitter and Telegram accounts. Within minutes or hours of considering a sign-up, I find typos in their most important documents. Fees, withdrawal details, contest announcements, upgrade and maintenance announcements always with massive typos, often ones that affect the intended accuracy of information. People seem more interested in locking unknown coins for interest, contests and airdrops, than actually earning by trading crypto. This is not a good direction, folks. The contests and competitions are the kinds of things used by casinos to enhance the user experience, and the thing about trading, is that with acquired skill you can earn, but in gambling the house always wins. If they didn't, would they be spending all of their funds on these programs? ETF's, perpetual contracts, massive leverage, all of these earn the casi... the exchanges massive revenue, and that comes at the price of customer losses. 

Good ole' fashioned, boring (not at all) spot trading is the real meat and potatoes of financial growth, both for the coins and for the exchanges. That is where the real focus needs to be. You can keep people's interest with a million different things every day with spot trading, and it is fascinating. For the most part, in the current climate, there is a huge lack of interest in learning the skills involved in investing, and I do not see that as a good thing. Not so different than my article on which coins will fail, which exchanges will succeed in capturing their audience with the core growth factor of crypto; exchanging funds!?

So, what is wrong with an industry that misspells things like their platform policies?

What is wrong with exchanges that don't care about accuracy in fees?

What is the deal with platforms not noticing whether a pair is even trading... for hours?

What is going on when the accurate totals for the value of a buy and a sell are simply not important?

What exactly IS an exchange supposed to get right?

Here's how I see it; if the expense of making graphics for new contests, and the code to launch these contests exists, then so does the budget for things like proof-reading. Every error on a website points to the priorities of the team. When I start trading somewhere, hoping for good liquidity and a good experience, and I am the only person who notices a single coin pair, or a few pairs, are down, and then I notify tech support, who thinks it is just a tired market, and I have to point out to them the correlations to other coins... this is a problem. They had no problem announcing the winner of 'fill in the blank' contests, but don't even realize the volume tanks on a coin pair for hours? "What exchange is this, so I can avoid it?" you might ask. I won't tell, because it has happened on 3 different exchanges in the past 3 months. 

Low fees are one of the things I look for in an exchange, because I day trade and preferably scalping for very small, very quick, safe profits. By the way, scalping gives legitimate liquidity to your favorite coins, much unlike wash trades that only give the appearance of help. Most recently, I had 2 negative experiences finally working successful strategies with low fees. One announced sudden site maintenance, which turned out to be a failed platform coin (FCoin), leading to a $130 million loss. The other, was a poorly-described discount. It seems that maker fees -.025% via rebate, actually means 0.075% fees minus .025% as a rebate. WHAT? It only took 3 days with tech support to find out 'my misunderstanding'. Oh, so there's Robinhood, thank goodness, a U.S. based, fully regulated exchange with a ridiculously uninformative interface, but great volume and liquidity, and zero trading fees. But, today they announced a system wide outage and people are freaking out.

I have found a great exchange with low fixed rate fees, which is nice not to have to purchase platform coins to reduce fees, when they are already low. Also, their liquidity is awesome because they source it from Binance and Huobi! (Did you know they could do that? Yeah, so there is no reason for a small exchange to fail because of poor liquidity; they can just license shared volume from the big guys). But, when I go to do my accounting, they are missing one tiny little detail; the TOTAL column. Yes, the total for each coin buy and sell... it ain't there!!! Never mind the 3 hours it took for the head of the exchange and their admin assistant to UNDERSTAND what was missing, sharing screen shots to and fro, but it is not a priority because they are more focused on their app. WHAT? Something as basic, so fundamental, as the total column for trade history... and to this day I cannot get them to respond on an ETA. Let me tell you now- it ain't gonna happen.

So, what is wrong with an industry that misspells things like their platform policies?

What is wrong with exchanges that don't care about accuracy in fees?

What is the deal with platforms not noticing whether a pair is even trading... for hours?

What is going on when the accurate totals for the value of a buy and a sell are simply not important?

What exactly IS an exchange supposed to get right?

I'm telling you, it is systematic at every single level, from the biggest to the smallest, from the apps to the wallets to the hardware to the DEX.

These are all no-brainer, GOTTA get it right, not an option things, and every single option fails.

Therefore, when people ask me where I trade, I tell them I'm still looking. I want to remain in a single place: here's what that place should look like.

1. The account has a wallet and an exchange balance. I can move any funds I want to and from the wallet. When it is on exchange, it is protected by the exchange's cold storage funds as insurance. When it is in my wallet, it is protected by their cold wallet back-up insurance for wallets. If possible, the wallet can also be attached to my own personal wallet and allow a swap to and from without any fees, or a guarantee of cold storage for the exchange wallet option.

2. 2FA only if I want it. Listen, I trade 99.9% of the time on my own computer that no one else ever sees or uses. I do not click bait, and I do not send any details to fake admins in groups. If I DO trade while I'm out, I do not use a small, clumsy app; I use my laptop. I bring my own tethered wifi so I am never on a public service.

Until there is a decent, single exchange with real volume and smart accessible people there to help me, my funds tend to end up spread between 3-5 testing accounts and I still make profit where I am able. I don't want to have to do KYC every time I earned a few bucks and got misled and want to remove funds. 2FA is already more than we use for our own bank accounts and PayPal, and neither of these have been hacked in my 'x' years on this planet (and trust me, it's probably more years than you). In fact, the only time I ever had funds stolen from my bank account; it was the bank that stole them! An entirely different story. So, if I am spread between multiple accounts on the same desktop and it times out every day, and I have to do username, password, google auth 2-10 times a day, and the only issues I ever run into are on the side of the platform, that is excessive. Handing over all of my personal details to get funds out is insulting, but it is going to get worse, and I imagine every wallet will require it soon enough.

3. Liquidity. I don't care if it is the largest 24 hr volume, I just care that the spread is tight and real people, or real people's bots, are actually trading.

4. Good pairs. If there is anything I have learned from more than 2 years strictly trading crypto, sometimes 18 hrs/day, never less than 12, is that I don't really need more pairs, I just need good ones. The top coins are the hardest to trade, and the slowest to hit profit range, but they are the most likely to remain available and consistently clear positions completely. That's really all I want from the pairs at this point. Ideally, every single top coin should pair with every single other top coin, and this gives incredible instant arbitrage-like opportunities. It is possible, and every exchange should exploit this. But, they don't. They should.

This means you should be able to trade 20 great coins against BTC, TUSD, USDT, LTC, ETH and XRP. The reverse pairs actually make a difference. For instance, on one exchange that favors a range of XRP pairs, there is a TUSD/XRP option (and because I like it, I imagine they will delist it soon, like they removed EOS without realizing it was still down... yeah, I'm the only one who noticed and reported it, and it is still down, and they still have not replied to my question). Why does this matter? Well, when XRP goes up, TUSD acts as if it goes down, meaning that when XRP goes up, I can clear XRP/USDT and simultaneously enter a position to buy TUSD low, when XRP goes back down, I can buy it low at the same time I just made a profit from TUSD selling back to XRP, giving me more XRP to trade with. It isn't redundant, it is twice the # of trades in the same time, watching the same pair. Imagine if that option existed for only the safest top coins, all the time? No volume problems there, thank you very much.

5. Good spread always. With good coins and good volume, this should mean good options are there 24/7 and there should be very little maintenance down time for deposit/withdrawal, because the industry needs the strongest coins to prove the model every day.

6. Low to no fees for maker. There are makers and takers. A maker uses a limit order to buy and sell, which means their position is visible on the order book, and it is providing liquidity to others looking to buy or sell. All of these orders act like a guarantee to the exchange that someone is going to help them fulfill an order. People to do market and special orders in the hundreds of millions of transactions a day, and this does not add liquidity, or visibility to the order book, nor does it signal bots to buy or sell. It makes perfect sense to only charge taker fees, and to make them slightly higher than what is currently charged for maker. Even more logical and awesome; don't charge fees on the buy and sell; place it on the profit! Here is what MY favorite exchange looks like:

I want an option to click to have a pre-determined % or specific value for a linked limit buy/sell pair. Let's say zero commission, I want to buy $100 of 'x' coin. I want to buy it at a price of $100. I place a limit buy for $100 of 'x' at $100. It executes. It immediately (like in microseconds) places the sell order for 0.1% higher than the buy order. If it goes up 0.1%, it is charged a commission only on the 0.1% profit. This removes 100% of the liability on my trade. Why should a MAKER, who is validating profit for the exchange, pay an up front fee for a trade that may or may not lose me money? I still might guess the sell order wrong, and it might sit like it would have whether there was a fee or not.

Here's what you want to understand; other exchanges that do not charge a fee, of which there are very very few, tend to earn on the spread. They source values from numerous exchanges so there is always room in the spread for them to execute millions of micro-orders on the spread, make a profit, return your value and sell. It is happening constantly. So, zero fee just means you didn't pay on top, but they still earn like your positions are gazillions of tiny (or not so tiny, I don't know you!) investments.

Most likely, when an exchange implements my model, more people will earn more crypto faster, because I have tested the buy/sell pairing in my own bot I made for my own trades; it works. More importantly for the exchange, they don't have to wonder where there funds come from; they are incentivized to give the very best volume and the fastest lightning fast response to enter positions. Otherwise, they have no reason to count on earning only on your profit. Let's say I don't want to give up 10-20% of my profit, even though it didn't cost me to take out the position above the value, then I can simply say 0.11% if the commission is 10% of profit. If commission is 20% of profit, I can make my sell order for 0.12%. This is a huge win-win for crypto, volume, liquidity, the exchange, and the customer/trader/investor.

Hey, if you want to get in quick on market movement and think it is going to go up 1-5% and you want to market buy or sell, you can still do so. In fact, people are doing it constantly. Hidden order? Sure. Spot limit, loss, Fill or Kill? Sure! The exchange should profit more from these than they currently ask. Just remove the fee from the maker and charge 0.25%, 0.4%, 0.5% on market/takers and literally no one is affected negatively.

7. For all the technical glitches, terrible spread, fake volume, one thing that keeps me in-confidence? Good support.

I want 24/7 support. If I can give money to the exchange 24/7 by trading, I deserve back 24/7 support when something goes wrong. Support needs to be nice, well-trained, and actually... you know... aware of what happens on an exchange. Let me tell you, some of the smaller exchanges, despite their issues, have had the most remarkable support. And, when I say smaller, I mean $300M 24 hour volume and 300,000 real customers, as opposed to $1B volume and 3 million customers. It ain't like the support is good only because there is no one other than me to serve. If they can do it, so can the big folks.

8. More attention to trading currency, less attention to stupid mindless contests and glitter.

Yeah, I am in the minority apparently. Watch the Telegram chatter and everyone is asking, when is that airdrop, why didn't I get my free coins, when can I withdraw my contest coins? No one notices, for months apparently, when there is no way to see your totals for your trades; not the customer, and not the exchange! But, everyone wants to gamble whether they can guess if BTC goes up or down in the next 60 seconds. I have 2-3 month trends where I do hundreds of trades and zero losses. I know how to read the market and never guess wrong, in a world where volatility is king and it is impossible to be right all the time. I played a perpetual digital binary option with a few dollars in platform coins. I lost it all. It is impossible to guess the mere second Bitcoin is going to go up or down by a matter of pennies from when a 60 second timer starts. So, why do these stupid programs? Because everyone is having a blast losing all their crypto to this crap. But, for me, just give me better, faster, smarter spot trading, and when I am a billionaire, people will start to listen to me about how to trade and earn.

9. Save settings.

Seriously, pretty much every exchange other than Binance uses the same tradingview chart layout, and only one exchange I have found let's you save your indicators. What gives? And again, it is not a top-10 sized exchange, so it is possible! I hate having to re-load, refresh, and then set my indicators over and over and over again. It isn't like there is another option, because they log me out at least every 24 hours anyway. Is it really that tough to do? Apparently, if one exchange does it, the same one that didn't notice EOS is still missing from the line-up, others can do it too. But, even that exchange charges too much in fees, and I have to buy their coin to reduce those fees. Seriously; there's no correct option for an exchange, but if someone made the right choices, everyone would want it immediately. 

10. There are SO many other things I can add, but I'll just stick with one last thing; strategy alerts. It is really, really easy to make an easy-to-use interface for DIY API calls, and if a person can do their own strategy alerts based on anything available in the engine, why not let everyone make more money, by making the platform more money, by getting in more trades, and earning more on those trades? I want a truly synergy-driven  relationship with my funds and my favorite exchange.

The best exchanges are yet to come. There are a few hundred other reasons why.

Until then, I want something reliable, safe, and as smart as the blockchain that got us here. Will 2020 be year? Thus far, hindsight is NOT 2020. But, it should be, and in less than 1 month it could be.

Likely, many exchanges large and small, DEX and centralized, are going to miss the mark while one of the most important halving events (and 3 other smaller halvings) takes place, and a lot of people are going to be annoyed at the missed opportunities in fast spot trading. LISTEN TO ME INDUSTRY! It doesn't have to be this way.

Nuff said.

Gordon Freeman Out.