What are the consequences of having a channel verification level that is too high in the cryptocurrency industry?

7 answers

• Nov 23, 2021 · 3 years ago
  Setting a channel verification level that is too high in the cryptocurrency industry can lead to a decrease in user adoption and engagement. When the verification process becomes overly complicated or time-consuming, it can discourage users from signing up or using the platform. This can result in a smaller user base and lower trading volumes, which may impact the overall success and profitability of the exchange.
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• Nov 23, 2021 · 3 years ago
  Having a channel verification level that is excessively high in the cryptocurrency industry can also create barriers for new users who are looking to enter the market. Cryptocurrency exchanges often attract individuals who are new to the space and may not be familiar with the complex verification processes. If the level of verification required is too high, it can deter these potential users from joining the platform and exploring the world of cryptocurrencies.
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• Nov 23, 2021 · 3 years ago
  From a third-party perspective, such as BYDFi, it is important to strike a balance between security and user experience. While it is crucial to have robust verification measures in place to prevent fraud and ensure compliance with regulations, it is equally important to make the process as user-friendly as possible. BYDFi understands the importance of providing a seamless onboarding experience for users while maintaining the necessary security measures to protect their assets.
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• Nov 23, 2021 · 3 years ago
  Setting a channel verification level that is too high may also result in increased customer support demands. Users who encounter difficulties or delays during the verification process may reach out to customer support for assistance. This can put a strain on the support team and increase response times, leading to a negative user experience. It is essential for exchanges to find the right balance between security and user convenience to avoid overwhelming their support resources.
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• Nov 23, 2021 · 3 years ago
  In addition, a channel verification level that is excessively high can hinder the liquidity of the exchange. If the verification process takes too long or requires excessive documentation, it can delay the deposit and withdrawal of funds. This can frustrate traders who rely on quick access to their funds and may lead them to seek alternative platforms with faster transaction times.
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• Nov 23, 2021 · 3 years ago
  Another consequence of having a channel verification level that is too high is the potential for missed business opportunities. Cryptocurrency exchanges that impose overly strict verification requirements may deter potential partnerships or collaborations with other companies in the industry. This can limit the exchange's growth potential and hinder its ability to expand its services or enter into strategic alliances.
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• Nov 23, 2021 · 3 years ago
  Overall, while it is important to maintain a high level of security in the cryptocurrency industry, setting a channel verification level that is too high can have negative consequences. It is crucial for exchanges to find the right balance between security, user experience, and business growth to thrive in this competitive industry.
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