Question: why do people keep coins in exchange wallets when you could just keep them in personal wallets and not have to worry about losing them? What's the appeal?
If you traded for USD to BTC to USD under normal circumstances, you've got:
1. Alice wants to buy something from Bob.
2. Alice buys BTC for USD, incurring one TX fee.
3. Alice pays BTC / mining costs to transfer BTC to Bob, a 2nd TX Fee.
4. Bob transfers BTC to an exchange for USD, a 3rd Tx fee.
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Now lets say everything were centralized.
1. Alice opens an account at FTX. She buys "virtual BTC" (just an account at FTX, not a real wallet transaction).
2. Alice transfers money to Bob, possibly through FTX.
3. Bob sells this "virtual BTC" back for dollars.
4. Note that unlike the first example, this transaction is instantaneous. The first example requires waiting for confirmation at each transaction. Confirmations nominally happen every 10 minutes, but there have been times when the wait has been days (remember when Steam adopted BTC and the network couldn't handle the load? I remember)
FTX can charge a transaction fee at #1 and #3, and still the whole process will be cheaper than the 3x transaction fees incurred over decentralized methodologies. Of course, when FTX collapses, everybody's money is gone.
I think you found the point right there.
People don't like "market rates" for transactions that change day by day, hour by hour. People also don't like their transactions getting stuck in the queue for days-and-days on end, possibly causing commerce issues.
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Or as people used to say about a year or two ago. BTC is no longer about transactions, its now about store of value.
Except now we've lost the store of value story, since BTC declined by 60%+ (on top of inflation). So BTC ain't that either.
No need to wait for a block and for the CEX to verify your coins.