Judging by recent news, it appears that Binance is in talks with Facebook about either listing Libra or joining the Libra Association. Binance’s CSO, Gin Chao, confirmed that the exchange has had discussions with Facebook about a listing process.
Recent news shows that Binance is in the talks with Facebook’s Libra project. Binance CSO Gin Chao commented that “discussions have taken place with Facebook”. The exchange wants to list Libra once the project goes live. However, Gin Chao also said that Libra will be built on a private blockchain, thus it won’t need any external liquidity, but he speculated that Facebook may desire a secondary market as well.
“Currencies benefit from a secondary market, so it would be in their best interest to want to be listed,” he explained.
Gin Chao is a former corporate
development executive for NBA and DELL.
Binance Thinking About Becoming A Libra
In addition, Binance is also thinking about becoming a Libra node. Facebook reportedly has announced the Libra Association in which, at the moment, are 23 high-ranking companies which will all act as a permissioned node which validates transactions. Companies like Uber, Visa, Lyft, and eBay have already committed to that role.
Altogether there will presumably be 100 nodes, hence the 100 companies by the time of launch. Binance has shown interest in becoming one of the nodes. However, to become a node, Facebook charges $10 million per piece.
While the final decision is yet to be made, Gin Chao said that Binance is “definitely considering” to become a node.
“We’re definitely considering it. And so, we would like to throw our hat in the ring. Whether or not we will become one, we’ll see,” said Chao.
Moreover, Gin Chao commented on the
Libra Project as such saying:
“It’s a good thing, for sure. Any time a company with the weight, size, resources, and impact of Facebook gets involved, it validates both blockchain and then, in this particular case, cryptocurrencies specifically. So whether or not Libra becomes incredibly successful, it’s already a good thing,” further adding: “It’s good that it’s taking a global perspective. There’s going to be the US dollar and a basket of other currencies. […] So I think that they have that part philosophically correct, as far as a stable coin goes.”
Binance Coin Price
In the past week, surprisingly, the price of Binance Coin has actually fallen. This might be due to the fast Bitcoin price rally. Basically, all altcoins were falling in terms of Bitcoin price, and only a few were able to break out of the pattern. Binance started the week with almost touching the $40 mark, but failed to reach it. After that, a continuous price decline has happened, and the price of BNB now sits at $34. However, considering the Year To Date time frame, Binance started the year with $5, and look where it is now. All-in-all, one of the best altcoin investments this year.
Recently, Cryptopia, a New Zealand-based cryptocurrency exchange which previously experienced a large security breach, announced that they are going into a liquidation process. They have appointed David Ruscoe and Russell Moore from Grant Thornton New Zealand as the liquidators.
After this, judging by their Twitter communication in mid-March, they entered a “coin securing” phase. Within this phase, they said that they are moving all the assets to new wallets. Afterword, they re-opened trading on their platform, and around mid-April they allowed BTC, LTC and DOGE deposits, but never really opened up withdraw functions.
Later, at the end of April, they stopped communicating for a couple of weeks. Then came out with the recent announcement about the liquidation process.
Users cannot withdraw funds because of an investigation
Cryptopia just published a “Liquidation FAQ” where they state:
“We are now undertaking an extensive process to confirm amounts owing and available to return to customers. This is a complex process and will likely require direction from the New Zealand Courts. Until the investigation has concluded we cannot return any crypto-assets to customers.”
Also, they claim that their first priority is to secure all crypto-assets on the exchange. But the weird thing is that they “need to confirm the amounts owing and available to return to customers”. And this process, as they say, is very complex and they need the direction of New Zealand courts “to make sure a fair legal solution is found”.
Went into liquidation because their debts fell due!
As they describe in their FAQ, Cryptopia’s main reason why they’re entering liquidation process is their situation with debt. Customers and Twitter users are commenting that one of the reasons why Cryptopia cannot answer anything about their customer’s assets is because they are thinking of covering their debts with customers money.
Every FAQ about customers assets ends with the same phrase: “Until the investigation has concluded, we cannot confirm whether individual customers will get all of their crypto-assets returned,” or “We cannot confirm any customer balances until we have completed our investigation,” or “At this stage we cannot confirm what will be returned or whether crypto assets will be returned as crypto-assets or fiat currency.”
Basically, they say that they know nothing about their customer’s assets, and they don’t guarantee that they will even get them back at some point.
Respectively, many users are really upset to hear this kind of response from Cryptopia. And they rush to conclusions such as Cryptopia is exit-scamming and stealing customers assets. But that seems like a logical response to what Cryptopia had explained. The exchange basically says that they got huge debt, and they won’t allow anyone to access their funds. Also, they don’t say whether customers will get their funds back. Whether or will they get them back at all, and they cannot even provide a reasonable timeframe.
Binance vs Cryptopia
As we recently witnessed, Binance also experienced a security breach. But the quality of communication and transparency that Binance offered cannot even be comparable to Cryptopia. First of all, you cannot even compare the involvement of Changpeng Zhao, the CEO of Binance, and Alan Booth the CEO of Cryptopia. Alan hasn’t tweeted since October 2018, and Cryptopia’s Twitter account isn’t a good example of communication as well. Binance ruled out multiple tweets a day, explaining everything and answering to almost everyone’s questions. But you sure can’t say that about Cryptopia! Since the announcement about liquidation, they have posted 3 tweets including the one with the announcement.
Funny enough, their CEO once in an interview to CoinCentral said:
“So, for us [Cryptopia], the first thing is trust. If people can’t trust your brand, and that means every part of it, you’re not going to succeed.”
It looks like they deliberately chose the path of not succeeding.
Yesterday, May 7, Binance, one of the largest cryptocurrency exchanges by trading volume, experienced a security breach. The exchange got hacked and the hackers got hold of approximately 7,070 BTC.
Hackers Obtain User Data
Binance CEO Changpeng Zhao immediately did a report on Binance’s inside blog explaining that the hackers were able to obtain a large number of user API keys, 2FA codes, and other info. He stresses that hackers possibly used various techniques including phishing and virus attacks. Also, he claims that there might be several other techniques that hackers used in the hack. Moreover, there still might be additional user accounts that are affected.
It looks like the hackers used only one transaction in which they transferred the stolen 7,070 BTC. CZ says that the hackers only impacted their hot wallet storage which accounts for roughly 2% of the whole Binance BTC holdings. All other Binance’s wallets are safe and intact, says CZ.
Well-orchestrated actions and patience
CZ claims that the hackers had the patience to wait and execute “well-orchestrated actions through multiple independent accounts at the most opportune time”.
“The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed. Once executed, the withdrawal triggered various alarms in our system. We stopped all withdrawals immediately after that,” reads the report.
A few tweeters got hung up on the phrase “The transaction is structured in a way that passed our existing security checks…” speculating that this might be an inside job.
Binance will use the SAFU fund to cover losses
On July 3, 2018, Binance announced its Secure Asset Fund for Users (SAFU). Binance developed this in order to offer future protection of interests of all Binance users. Binance allocates 10% of all trading fees to this fund.
However, many industry professionals and projects which are related to Binance have shown support for Binance, by offering to pay the 7,070 BTC to Binance. For example, Justing Sun, the CEO of TRON, offered personally to deposit 7000 BTC on Binance to purchase BTC, BNB, TRX, and BTT. A few tweeters interpreted this as “openly admitting to market manipulation”.
Nevertheless, Binance will lock all deposits and withdrawals for a whole week. The reason being a thorough security review. CZ says that they have to go through their systems and data “which is large”. However, trading will still be live.
Suggestion to “rollback” Bitcoin
In the early hours of this incident, Jeremy Rubin (@JeremyRubin) suggested CZ to rollback Bitcoin, in order to recover the lost funds.
CZ did a livestream explaining everything what had happened and in this livestream he discussed the “rollback” option.
Udi Wertheimer in his Twitter profile conducted a thread where he explains why this is an outright nonsense.
He says that this would cost more than the actual hack and could potentially lead to more huge transactions at risk of being double-spent. Also, many other exchanges might be impacted and this could “hurt” the Bitcoin credibility. Wertheimer explains that a day of mining costs 1,800 BTC. Most importantly he said that “this is no Binance chain with CZ signing all the blocks”. By actually trying to rollback Bitcoin, many miners would be affected and the whole Bitcoin ecosystem in general. However, CZ from Binance dismissed this idea rather quickly.
BitMex Research Twitter profile posted a 2016 Reddit thread where a rollback was discussed when hackers stole around 120,000 BTC from Bitfinex. In this thread users comment on the potential negative consequences.
Wertheimer also reminded that previously Binance had stated that holding assets on their exchange is as safe as being in possession of ones own keys. Now we see that this statement is ridiculous and you should never store your assets entirely on an exchange. Even “SAFU” won’t help.
On April 18th, a decentralized social media platform Mithril managed to migrate to the Binance new blockchain, thus becoming the first cryptocurrency to shift to the Binance Chain. Mithril is a social platform which rewards its users who create content with its native cryptocurrency MITH.
MITH moves from ERC-20 to BEP2
Mithril originally was an ERC-20 platform, but now they are migrating to Binance’s BEP2 technical standard. As they describe in their blog post, the migration from ERC20 to BEP2 will begin shortly after the launch of Binance Chain on April 18. While this has already happened, users now can easily withdraw their MITH from Binance to BEP2 wallets and begin trading on the Binance DEX. ERC20 versions of MITH which users store in private ETH wallets or exchanges will not be impacted.
Mithril is a decentralized social media platform that rewards all content creators. Mithril is building a comprehensive ecosystem that revolves around MITH. Users acquire MITH through Mithril mining, manage their assets on VAULT, and spend MITH in various real-life applications.
Recently we reported about the #WeAreAllHodlonaut movement in crypto Twitter. It was caused by Craig Wright, Calvin Ayre (the BSV camp) and a Twitter figure with a nickname @hodlonaut. The BSV camp was threatening hodlonaut of suing him but failed to reach out to him due to his anonymous internet personality. The whole crypto Twitter got up to their feet and showed support for Hodlonaut by changing their profile pictures and nicknames to his. But it all went down when Craig Wright’s lawyers sent legal documents to Peter McCormack, who stepped in the battle and claimed that he is the person behind @Hodlonaut’s Twitter profile. Later, CZ from Binance threatened the BCV camp of delisting their coin, if they will continue this “nonsense”. Now it has played out to reality and Binance among with other high profile exchanges are delisting Bitcoin SV.
Craig Wright’s lawyers send a legal letter to Peter McCormack
Since this is crypto Twitter, everything is being put out in the open. This wasn’t an exception and once Peter received the letter, he immediately posted it on his profile:
The letter comes from a legal firm “SCA ONTIER” which is based in London, UK. As they state in the first sentence, they act for Craig Wright. Basically, they cite all the tweets in which Peter McCormack mentions that BSV along with Craig Wright is a fraud. They call it defamation and states that these actions by Peter are causing serious harm to Craig Wright. At the end of the letter, they have put the requirements that the “client” wants:
“(1)Your assurance that you will preserve all documents, including electronic messages, draft articles, notes, and any other electronic materials, that may be relevant to this matter;
(2)Your undertaking to delete all tweets and other online or other publications in which you alleged that our client had fraudulently claimed to be Satoshi Nakamoto;
(3)Your undertaking not to repeat those allegations, whether on Twitter or in any other form;(4)Your agreement to tweet an apology to our client in the terms below;
(5)Your agreement to join in a statement in open court in which you apologize to our client and acknowledge the falsity of the allegations.”
Also, they included a pre-written text for Peter to tweet out to his followers:
Peter McCormack sends a response
Being a kind of eccentric person on Twitter, Peter of course published his response to Craig’s lawyers. In the letter, he basically copied the content of Wright’s, but changed it into his benefit. He states that he believes that Craig is not Satoshi and repeatedly calls him a fraud. Also, like Craig, he included his six requirements for Dr. Wright:
“(1)He provides evidence which he is Satoshi, not the same nonsense he has published time and time again, if not then see points 2 – 6;
(2)His undertaking to delete all online publications where he fraudulently claims that he is Satoshi Nakamoto;
(3)His undertaking to not repeat these fraudulent claims;
(4)His agreement to write an apology to everyone in Bitcoin
(5)His agreement to join in a statement to an open court in which he apologizes for and acknowledges the falsity of his claims;
(6)His agreement to stop issuing bullying letters to people and to end this pursuit of Hodlonaut, who is a legend.”
Peter also included an apology letter for Craig to publish to everyone involved in Bitcoin:
Binance delists BSV
This tweet came as a cold shower to all the BSV supporters and quite possibly to Calvin and Craig as well. Now they go on and bash Binance of not being an honest broker. Calvin rhetorically asks, what could Craig Wright know that all the BSV bashers would be so afraid of? He calls this market manipulation and a media stunt against “the real Bitcoin”. Also, that the vast majority of crypto Twitter wants to censor Craig Wright.
These Twitter threads mostly consist of Hodlonaut supporters and a few BSV followers who doesn’t seem quite happy about how this situation has escalated. Many people are saying that if Craig is Satoshi, all he needs to do, is sign a message with the private key of the Genesis block, rather than going into court and proving his position.
But instead of stepping down, Calvin Ayre continues to fight even more. Now he is threatening Binance as a company and calls it “an unregulated criminal organization”.
It looks like this is might go on for a while. To be honest, this event could go down in history as the first legal action between individuals in the crypto community.
After Binance, comes Shapeshift and possibly Kraken
Not long after Binance posted their announcement for delisting BSV, Shapeshift CEO Erik Voorhees posted on his personal Twitter account that Shapeshift will follow, and delist BSV within the next 48 hours.
Shapeshift is a crypto-to-crypto exchange where you can exchange one cryptocurrency to another. However, it is not a traditional crypto brokerage.
In addition to Shapeshift’s claims, Kraken Exchange posted a poll on their Twitter account. The poll asks if Kraken should delist BSV as well. At the time of writing, there are 72% out of 64,442 votes, that say “Yes, it’s toxic”.
Bitcoin SV price
As expected, the price of Bitcoin SV (BSV) plummeted in a matter of days, going from $80 to $56, according to Coin Market Cap. This is the lowest price BSV has seen in this year. The only time BSV saw a similar price was when the coin launched at the beginning of November 2018, and at the end of November 2018, when it reached its all-time low – $37,47. Currently, judging by Coinmarketcap.com, Binance accounts as the second and fourth largest exchange for trading BSV with a combined daily volume of $39 million. Kraken on the other hand is in the 35th, 37th, and 39thposition and accounts for approximately $3,5 million.
Bitcoin SV is the top losing asset in the TOP 100 most popular coins.
One of the most popular crypto-personalities in the cryptocurrency community Anthony Pompliano has suggested all crypto exchanges to simultaneously delist Bitcoin SV on May 1stas a sign of solidarity behind the Bitcoin community. Also, he started a hashtag #DelistBSV.
At the moment cryptocurrencies are mostly used for speculation and trading. As you might already know, there is always a need for third-party interference to conduct trading operations. Exchange or a broker usually does the job as long as it is not an over-the-counter market. It is very important to choose the right exchange due to many scams, fraud, hacks, and poor performance exchanges. This article will explain to you how to choose the right exchange and will give you some of the best examples.
Is the exchange safe?
Before choosing any crypto exchange the most important thing is to understand whether or not the exchange is safe. Your funds can get stolen by hackers or scammed by fraudulent exchange owners. It is fundamentally important to choose a crypto exchange that stores its funds in cold storage so it is close to impossible for hackers to move large amounts out of the exchange. See picture of largest cryptocurrency exchange hacks below. You should also remember that funds stored on a self-owned hardware walletis always safer than storing your funds on an exchange.
What trading instruments is the exchange offering?
If you are willing to trade the mayor cryptocurrency pairs, then by this criteria almost every exchange will be suitable for you. When it comes to mid and low cap altcoins you have to seek for specific exchanges. Also, you must check if the exchange is offering real cryptocurrency trading or derivative trading. Derivative markets usually come with bigger leverage and liquidity but their price usually does not reflect real bitcoin price and often makes different, not synchronized price moves.
Other exchange specifics
A Very important thing to look for is trading volume and liquidity. For every trade you make, you want to be sure that there is another party willing to do the opposite trade. If the exchange does not have any liquidity you might be left with 10000000 dogecoins that you can not liquidate and tell everyone that you are a “Millionaire”. Usually larger the trading volume is the better. The issue that goes hand by hand with trading volume, is trading platform speed. Some platforms are perfect and run without any ease in moments of huge trading volume, some are just slow and clunky and takes you 5 minutes just to confirm a trade. Coughs *Kraken* Coughs. So it is just reasonable to choose the best volume/performance ratio exchange.
List of most popular exchanges
How to start trading in these exchanges?
You can start your crypto journey by registering and depositing funds in one of these exchanges:
BitMEX is a centralized next-generation crypto-coin trading platform, which supports highly leveraged trading via perpetual and fixed-date contracts. To start trading with BitMEX, click HERE.
HitBTC is centralized and it claims it is the world’s most advanced cryptocurrency exchange. Since 2013, HitBTC has been providing markets for Bitcoin, Ethereum, Litecoin, Dogecoin, Monero, USDT, and more than 300 cryptocurrencies in total. To start trading with HitBTC, click HERE.
Binanceor Binary Finance is currently the world’s second largest cryptocurrency exchange, with around $6 billion in assets traded in an average seven day period. To start trading with Binance, click HERE.
Kraken, a centralized US-based cryptocurrency exchange operating in Canada, the EU, Japan, and the US, and “the world’s largest bitcoin exchange in euro volume and liquidity”. Kraken provides Bitcoin pricing to the Bloomberg Terminal. To start trading with Kraken, click HERE.
Bittrex is a secure, reliable, centralized and advanced digital asset trading platform developed for international customers and built on Bittrex’s cutting-edge technology. To start trading on Bittrex click HERE.
Kucoin is a centralized cryptocurrency exchange located in Hong Kong. It currently has 178 coins and 398 trading pairs. The most active trading pair on KuCoin exchange is META/ETH. KuCoin is live since 2014. To start trading with Kucoin, click HERE.
In today’s crypto market update, we’re going to look at the past top gainers, top asset trend lines, market cap and daily volume of the most popular exchanges. In the past days, the crypto Gods have blessed us with quite notable gains, so let’s look at the most giving assets in the past days. The color green in yet again taking over and a slight smile is forming onto traders faces across the crypto globe. The total crypto market cap has risen in the past days by $13 billion. Bitcoin dominance fell below 52%, now being at 51,6%. The total volume of crypto markets is $36 billion.
Top Gainers in the past days.
The top gainer from the Top 10 coins and tokens in the past 7 days definitely is EOS. EOS experienced +31.1% in the past week, but mainly in the past couple of days. Who said you can’t profit in a bear market? Well, of course, if you’re not the hodler from August 2017.
I couldn’t find a particular reason why exactly EOS is pumping so hard, but lot’s of traders on Twitter are sharing their wit that they knew this ahead of time. Of course, what else they could say. However, today EOS managed to go past the target at 8830 sats, and now is continuing its way up. Also, there are two ways you can look at these charts: the market against Bitcoin or against USD. If you’re willing to sell and accumulate more BTC, then look at the EOS/BTC chart, but if you’re willing to sell immediately to USD, then EOS/USD chart would fit best for you. Although when comparing these two charts, we see a drastic difference:
But an interesting question is sneaking around Twitter:
I’m sure a lot of that money is used in product development, but that is a huge amount. I mean $4 billion… It’s needless to say that EOS has had some troubles explaining this in the past.
Next, surprisingly, comes Ethereum with +22.4% in the past 7 days. ETH went past the 1st resistance mark and now is resting at the edge of the second resistance mark at $146. Of course, the main target is at around $210, so we have a long way to go. Also, the daily volume has set new highs, being the highest ETH has seen in the past four months or so. Although that depends on where you are checking your charts. As you can see coinmarketcap.com compared to Tradingview paints a bit of a difference.
This pump may be because of the near Constantinople update, but, however, it might be postponed again due to security issues. On the other hand, in the past couple of days, many coins are pumping so this could be just a temporary market uptrend.
Bitcoin, on the other hand, is testing new “highs” at $4000, but now still sitting at $3,926. Will we break through the next two target points? The 7 MA (green) moved past the 77 MA (orange) and bravely is continuing its way up. The 231 MA is on an uptrend in the past hours and 77 MA has crossed it upwards. Are we looking towards a bull market?
However, Murad Mahmudov has a different point of view:
Volume in the past 24h
Judging by this measure, we should get an approximate picture of the most popular daily used assets. And as we can see in the picture below, Bitcoin is the number one asset, followed by a stablecoin Tether. Both accumulating around $10 billion. Only after them comes Ethereum with half as much volume at $5 billion, and after Ethereum comes EOS, also with half as much volume as Ethereum – $2 billion. As we can see, Litecoin in the past 24 hours has had more volume than Ripple, so it is safe to say, that Ripple (XRP) is losing its positions. Could it be because of the latest JP Morgan stablecoin? Another interesting position in the top 10 is Qtum, which is accumulating $356 million in the past day, getting ahead of Dash.
When looking at exchanges, this becomes pretty mind-boggling. Coinmarketcap.com and Coingecko.com show a completely different picture. As we can see in the pictures below, the information completely differs from each other. This might be because we are measuring them by USD daily volume. One thing is for sure – Binance is at the top of both websites, but as we all know – Binance is not a regulated exchange, so anything can happen. But when it comes to the second position or any other in the top 10, this is where it gets tricky. Coinmarketcap.com shows that Bit-Z is second with $1,2 billion adjusted volume. However, coingecko.com shows that ZB.com is second with $1,4 billion volume. On the other hand, coinmarketcap.com lists ZB.com at rank 13 with $525 million adjusted volume… What gives? Well, one thing is that these both statistics websites are tracking exchanges by different measures, but I wouldn’t have imagined that the overall picture would be so mind-blowingly different.
I couldn’t stay still with such confusion on crypto exchanges, so I went on https://exchangewar.info to find some clearance. When sorted by top BTC volume I kind of got my answers I was looking for. This might be the main difference between these statistics websites and the USD daily volume. In some of those exchanges Bitcoin is not covering the main daily volume, so that is why the statistics are different.
Today we look at the crypto market update. Top coins and tokens are still experiencing a downtrend movement. Yesterday we experienced a massive plunge by all major top 100 coins. In this massive move, about $5 billion were wiped from the total market cap. A Big move falling from $138 billion to $121,9. Now it recovered and is sitting at $123,5 with an uptrend look-a-like.
As we can see in the below picture, theoretically, Bitcoin dominance looks like is in a continuous downtrend. At the same time, it could be the beginning of the long-awaited recovery from the bear market which started at the start of last year’s March. Ethereum and Ripple are still fighting restlessly for the second most dominant asset position. Also, Litecoin slowly but steadily is gaining its dominance.
Top coins and tokens
As we can see, all the coins are still following the pattern of Bitcoin. In this context, the market still has room to grow, because this is a significant sign of the market is not mature enough. But anyway, Bitcoin is still showing signs of an active bear market. Bitcoin is down by around -3% with XRP following by -4% and Ethereum closes the top 3 with around -5%.
Overall, in the top 100, we can see a lack of significant movement. Mostly all coins are in a downtrend or in a sideways movement. Except for cryptocurrency Verge, which is booming today with +26%. They recently announced the second beta version of their mobile iOS wallet which could be the reason for this move.
Top Gainers and Losers
Despite the lack of movement in the top 100, lower ranking coins are experiencing more significant moves. EncrypGen is up +165% (traded on Cryptopia exchange), CariNet +98% (traded on BCEX) and Timicoin + 91% (traded on IDAX). All these coins daily volume for the past 24h is around $200,000 which is very weak and low conditions for hope to actually gain some profits. However, this means that altcoin markets are still alive and if you make a shot in the dark you might actually get lucky. But anyway, we would not recommend to neither trade within these exchanges, nor invest in these assets are they are with a high-risk factor. Invest only the amount of money you are willing to lose.
When looking at the top 5 exchanges, we see Binance still as the outright leader of all exchanges. However, the exchange is experiencing a -12% loss in their 24h volume. OKEx is coming as the undefeated second place owner with -3% change in their daily volume. Bit-Z with -12% change in volume comes in 3rd, Huobi with a surprising +20% in daily volume comes in 4th place. The top 5 most popular exchanges close with DigiFinex which experiences only a -4% change in their daily volume.
And yet we ask again – Could this be the last stop before take-off?
All the information was taken from CoinMarketCap.com.
Binance is currently the world’s second largest cryptocurrency exchange, with around $6 billion in assets traded in an average seven day period. Binance’s rise to the top has been swift. Since its launch in July of 2017, Binance has grown at a rapid rate. Even in the current bear market users continue to sign up with the exchange. Binance was one of the first exchanges to reactivate user registrations at the peak of the 2017 bull market.
Binance is also the name of a cryptocurrency (BNB) traded and used on the Binance exchange. Since the ICO, the value of BNB has risen with the growth of the exchange. BNB is now among the top 30 cryptocurrencies in the world by market cap.
What about Binance makes it so compelling? Why are so many people signing up to use this exchange? In this article, we’ll dive into those questions and more. The answers are surprisingly simple. The simplicity of Binance’s business model has been the key to its success so far, and it bodes well for future success.
How Exchanges Work: Understanding Binance’s Advantage
First, it’s worth understanding the basic mechanics of a currency exchange before we go any further. Solving some technical problems with exchange software is among Binance’s key competitive advantages.
A typical exchange works as a market maker for buy and sell orders. It’s important to note that the exchange itself does not buy and sell your currency when you make an exchange. Instead, the exchange matches you with another user who is willing to buy your asset at the price your asking. This matching of buy/sell orders is the key function of an exchange. When an exchange matches buy/sell orders and completes a trade, it charges a transaction fee to both parties for the service of finding a match. That’s how exchanges make money.
This order matching creates a bottleneck for many cryptocurrency exchanges. If you have more trade requests than your matching software can handle, orders will be delayed. With the popularity of Bitcoin and altcoins right now, users are submitting millions of trade requests per minute on the most popular exchanges. Delayed trades might be the difference between capitalizing on an investment opportunity and missing it.
Binance’s major innovation is their matching engine, capable of 1.4 million trades per second. This makes their trading platform one of the fastest available on the market. As such, many crypto investors have flocked to Binance for its processing speed.
The other critical component of an exchange is liquidity. Liquidity is the amount and frequency with which assets move around the exchange. In order to quickly find a match and complete an order at a competitive price, there needs to be a lot of activity on the orderbook. An exchange with a quiet orderbook is not a good place to invest your money. However, Binance has the busiest orderbook in the world, making it a safe, competitive market for transactions.
Binance has high liquidity in many different assets, not just Bitcoin and other top coins. Bitcoin is by far the most-traded asset on Binance but altcoins also feature decent volume. The altcoin advantage is a virtuous cycle for Binance, and new coins often choose to list with Binance over competing exchanges. This includes many coins from Asia that may not be available from Western-based exchanges. The wide array of assets available is another key reason for Binance’s rapid rise.
Using the Binance Exchange
Binance does not support fiat currencies, so you can’t convert dollars, yen, pounds, euros, etc. on the exchange. (The name Binance is actually a combination of “Binary Finance,” suggesting that they only deal in digital assets.)
If you want to use Binance, you’ll need to already own cryptocurrency. Once you do, registration and setup are fairly easy, as is funding your Binance account.
User Experience & Interface
Binance has done a great job building an intuitive user interface without sacrificing the charts, graphs, and other information you need to make informed investment decisions. Trading is easy and only requires a few clicks to select the currency pair you’d like to trade and create the order. The user interface is available online and also as a mobile app for iOS and Android.
Another factor contributing to Binance’s rapid growth is its availability in fourteen different languages. The exchange supports users that speak English, Chinese, Japanese, Korean, Russian, Spanish, French, German, and several other major languages.
The final key to Binance’s success is the competitive trading fees it charges. It’s free to fund your account, and orders are charged a simple 0.1% trading fee. The trading fee means you’ll want to limit how frequently you make trades since you’ll lose 0.1% every time you transact. However, we’ll see in a minute that Binance makes it possible to reduce these transaction fees. If you consider how much Binance makes off its transactions, it’s clearly a profitable business model. Only 0.05% of daily volume still translates into millions in revenue every day.
Binance also charges withdrawal fees for moving assets out of your account into private wallets. The withdrawal fees vary by the coin, but they are flat fees, not percentage-based.
The Binance Coin (BNB)
Along with the launch of the exchange, Binance launched an ICO. BNB is an ERC20 token built on Ethereum. The total supply is limited to 200 million BNB, after which no more coins will be created.
You can use BNB to pay your fees on the Binance exchange. While you can still choose to pay your fees in the cryptocurrency you’re exchanging, Binance offers a rebate as an incentive to pay fees in BNB. In your first year of membership on Binance, fees are discounted 50% when paid in BNB. With every subsequent year of membership, the fee discount decreases. By your fifth year using Binance, there is no longer a fee discount for paying in BNB.
Since the fee rebate decreases every year, the value of the BNB token is also expected to decrease over time. To combat this depreciation, Binance also destroys BNB tokens over time, reducing the total supply of BNB from 200 million to 100 million. Contracting the money supply in this way should counteract the effects of the decreasing discount. The goal being a stable price for BNB coins over time.
While fee payment is the primary purpose of the BNB token, you can also use it to invest in certain ICOs that participate in Binance’s Launchpad program. Once the ICO is over, these new tokens will automatically list on Binance, creating a seamless marketplace between ICO and exchange.
The Future of the BNB Token
Binance is promoting the adoption of the BNB token in the hopes that it will drive customer loyalty. The rebate, of course, is a nice perk for lowering trading fees. But even after the rebate decreases, users are still likely to own leftover BNB that they might as well continue to use. As a dominant cryptocurrency exchange, we can expect Binance’s coin to continue to circulate widely. The more its adoption grows, the more valuable and useful it becomes.
Right now, BNB’s primary value is within the exchange. This makes BNB unique among most new coins since it already has a practical use case. Most investors will get the highest ROI out of cashing in on the BNB rebate. However, in the future, it’s possible the value of BNB could grow as an asset. For the earliest investors, they’ve already seen a large return on BNB. It’ll be interesting to see if investors continue to take the rebate or hold BNB in hopes that it will appreciate.
If Binance sees continued success on its current level, it will certainly implement more features and programs. These new capabilities and add-ons will all likely use the BNB coin. Their ICO Launchpad is one early example of an added feature using the BNB coin. There are likely to be many more.
Background & Team
Binance is a Chinese company, originally started in Shanghai and now based in Malta. Its founder, Changpeng Zhao, is the former CTO of OKCoin, another prominent Chinese cryptocurrency exchange. Zhao’s company, Beiji Technology, owns and operates Binance.
In August 2017, shortly after launch, Binance announced that Yi He would join the team. Yi He was one of the original co-founders of OKCoin. She’s widely recognized for her ability to grow technology products and gain user adoption. Zhao, He, and the Binance team have grown the company into one of the biggest exchanges in the world in a fairly short period.
Until recently Binance held the number one spot by volume for cryptocurrency exchanges worldwide. It has since been overtaken by the Bitmex exchange which trades almost three times in volume. Bitmex, however, is an unregulated exchange which also allows margin trading. This is in direct opposition to Binance which is regulated and does not allow users to borrow funds and leverage their trades.
Margin trading is a riskier way to trade and many traders blow up accounts in the hope of getting rich quick. Bitmex also allows traders to go short Bitcoin. In other words, traders can borrow Bitcoin in the market, sell them, and then buy dollars in the hope of buying BTC back at a lower price, therefore, making a profit. This may be the reason why Bitmex is generating more business in the current bear market.
Binance Coin Trading History
Altcoins have really suffered in the 2018 bear market. Fortunately, Binance has a good business model which incentivizes traders to continue using BNB to pay for their trading fees. This has largely kept the price up as traders hold BNB instead of dollars. BNB initially traded around $0.10 before rapidly shooting up to $2.80 in 2017.
At the height of the mania in 2017, it traded as high as $24. It currently trades around $4.60 which highlights the depreciation of the overall altcoin market. Nevertheless, if you had bought when it was first launched you would still be in pretty good shape.
Where to Buy BNB
Several exchanges other than Binance list BNB though the liquidity is low and there is little point in buying it anywhere else. Most users hold it to cut their trading costs and any coin supported on Binance is available as a trading pair with BNB.
How to Store BNB
If you’re interested in holding BNB as an investment, you should move it off the exchange into a wallet. As an ERC20 token, your BNB can be stored in any Ethereum address via MyEtherWallet. For improved security, you can also use a hardware wallet like the Trezor or Ledger Nano S.
There’s a reason why Binance has seen such massive growth and success over the past year and a half. It’s fast, reasonably priced, and available worldwide. If you already have an exchange that you use and like (that charges similar fees), then there’s no need to switch to Binance. In particular, if you often need to convert to fiat currency, Binance won’t be useful for you at all. However, if you’re unhappy with your current exchange, need lower fees, or are looking for the fastest processing times available, then a move to Binance could be right for you.
Additional Binance Coin Resources
Stay up top date with the latest developments at Binance on the following channels:
Recently in a blockchain event which happened in Singapore, Binance CEO, Zhao Changpeng, accidentally announced that a new exchange in Singapore will soon be rolling out. The fiat-to-crypto exchange beta testing ended yesterday, judging from the information given. But the real beta version of the exchange will only be available for a small group of people for testing.
Further details on the upcoming exchange were not given.
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