If you’re passionate about cryptocurrency, then you’ve likely heard of Binance, the fastest growing and the most profitable cryptocurrency exchange in history.
Considered by many to be a “unicorn” company, Binance is a centralized cryptocurrency exchange that provides its users with an impressive set of tools, charts, and security features. The story of Binance began in China in mid-2017 after a very successful ICO.
Meanwhile, the exchange changed its headquarters to Tokyo after the Chinese government banned cryptocurrencies, and it’s recently relocated to Malta.
One of the most impressive facts about Binance is that it managed to achieve its unicorn status in no more than a couple of months, reaching an impressive value of $2 billion in less than half a year. At the time of this writing, Binance sits at the top of CoinMarketCap’s exchanges list with an incredible trading volume of $909,592,995.
What makes Binance different from other crypto exchanges?
Binance’s success cannot be tied to individual facts or stats, but rather how Binance is as a service. For starters, Binance has support for an overwhelming number of cryptocurrencies. According to CoinMarketCap, the exchange currently offers support for 380 coins, including some of the most popular like Bitcoin, Ethereum, EOS, Bitcoin Cash, Ethereum Classic, TRON, Ripple, Stellar, Cardano, IOTA, NEO, Litecoin, VeChain, Zilliqa, Monero, Nano, and the list goes on. The exchange also comes with trading support for all types of ERC-20 tokens.
Binance adds new coins and trading pairs quite frequently. Another factor that has contributed to the phenomenal success of the platform is its marketing strategy. In fact, it’s said that, in the early days, the company dedicated 50% of the funds to branding and marketing purposes. One early promotion that made Binance so popular was the so-called “Free Trade Fee.”
The promotion began on July 25th (2017), right when Binance released its utility token, the Binance Coin (BNB). During a short period, traders enjoyed 0-fee trading. Now, Binance charges 0.1% on all trades. However, if you choose to pay the fees using Binance’s own coin, you get a 50% discount meaning that the trade fee is just 0.05% per trade, one of the lowest in the entire cryptocurrency marketplace.
The promotion ended in September, but the marketing team behind the exchange did not lower their “arms.” Numerous campaigns and giveaways followed which ultimately led to a very good expansion of the community. The Binance name could be heard at coding competitions for developers and other similar events. The social media presence was also quite impressive.
Marketing aside, the platform is also fairly savvy at appealing to users from all across the globe by offering support for languages such as English, Japanese, Chinese, Russian, Spanish, and Korean. To add to that, Binance currently has one of the better rated customer support teams out there; appropriately called Binance Angels.
The exchange also boasts one of the fastest trading engines currently on the market, capable of handling somewhere around 1,400,000 orders/second. The exchange’s user interface has changed a lot over the course of its lifetime, but it remains one of the best you can ever find on a crypto exchange.
The platform boasts a web-based interface that works well with all modern browsers, as well as desktop (Windows and MacOS) and mobile clients (Android and iOS). Since it’s so popular and it has immense trading volumes, the exchange offers high liquidity when compared to most other crypto exchanges out there.
Lastly, one of the reasons why Binance is so successful is due to its in-house cryptocurrency, the BNB token, also known as the Binance Coin.
What is Binance Coin?
For starters, BNB was a very important part of providing funding for Binance via its initial ICO. It provided investors with an easy way of supporting the new exchange.
As of this writing, Binance Coin (BNB) is currently ranked 16th on CoinMarket Cap and is valued at $13.66 per coin. The total market cap is $1,304,824,956 with a total circulating supply of 95,512,523 BNB. When established, the total supply was 200 million BNB tokens.
If you’re wondering why, it’s because Binance uses “BNB burning,” a process through which the exchange buys back the tokens and destroys them. More precisely, Binance uses 20% of all its profits to buy back and then burn BNB. It will continue to do so until the supply of BNB will be 50% of the original amount, namely 100 million BNB.
The burning process is actually a very strategic move of the exchange. By reducing the number of tokens in circulations, the exchange ensures that the value of the existing ones will go up. This, of course, assuming the demand doesn’t take a turn for the worst.
Binance Hack
One of the main advantages of Binance is the overall good security, despite various attacks. At the beginning of March, Binance experienced a phishing attack. According to Binance’s team, the hackers have been accumulating user accounts from January. After hijacking various user profiles, the hackers created API trading bots for each account and waited for the perfect opportunity to arise.
Binance’s security system kicked-in and suspended the withdrawals of any funds. The hackers wanted to artificially inflate the price of Viacoin. Even though the exchange reversed irregular trades executed against the hackers’ accounts, it couldn’t reverse the BTC/VIA trades from the affected accounts. Binance even went as far as to offer a $250,000 bounty for the arrest of the hackers involved in the incident on March 7th.
The SAFU Fund
The Binance exchange also created the “SAFU” Fund, short for Secure Asset Fund for Users, in the aftermath of trading irregularities in July 2018, where one or multiple users purchased one Syscoin (SYS) for the equivalent of $625,000 in Bitcoin. At the time, the coin was worth about $0,26. To make sure that these types of situations won’t happen again, Binance announced the aforementioned fund, which will store 10% of all trading fees to cover losses.
Final words
Taking everything into account, it’s quite easy to see why Binance managed to become the world’s best and most profitable cryptocurrency exchange in such a short amount of time. The exchange has a lot of advantages such as user-friendly interfaces and apps, support for almost 400 cryptocurrencies, in-house BNB token to reduce trading fees, high liquidity, multi-language support and various attractive reward programs.
