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Beginners using CEXs will be oblivious to normal crypto features and terminology.

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by COINS NEWS 173 Views

CEXs may be “better” for new users that want to easily buy crypto in a way that's familiar to normal transactions. Though, said users will be unaware of anything related to the actual tech of crypto and the real terminologies used.

People who began using CEXs and still are will be only familiar with the “user-friendly” familiar FIAT-like terminologies instead of the crypto ones for the most part.

For example:

  • You just “send” crypto from one account to another instead of having anything to do with actual addresses etc. People using CEXs could fully use it without needing to know what a crypto address is.
  • Normal account creation, and thus never introduced to things like seed phrases.
  • No knowledge of their crypto keys, as they don't even have them.

You might argue this is better for them to more easily understand, but this can cause issues in the long run:

  • Confusion when creating non CEX wallet, for example “What is this seed phrase stuff, why not just a password?”
  • Lack of awareness to the higher need of attention to said seed phrases, as they can not be reset like a CEX password.
  • Lack of knowledge of what keys even are and why one requires them in the first place.
  • confusion when sending to addresses instead of the usual pay ID or username.

This however can somewhat be fixed if the CEXs were to change (which will never happen):

  • Use something that resembles an address for each CEX user, instead of a “pay ID”, this will make people used and knowledgeable to the idea of an address (even if it's technically not a real address).
  • Have an optional seed phrase as one of the types of two-factor authentication. this will make the concept recognizable for the users in the future.
  • very clearly state that cryptos have keys, and cryptos held on CEXs don't give you your keys (by “clearly” I mean guaranteed anyone creating an account will be aware of this).

This however will probably never happen because if anything CEXs want their users to stay oblivious of the normal crypto to scare them off from transition from their exchange to self custody wallet in the future. they want to give users the idea that traditional crypto is an outdated mess, and they should stay in their exchange.

submitted by /u/thespygorillas
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