Launched in July 2017, Binance is the largest cryptocurrency exchange right now by trading volume. With lots of decentralized projects going live along with their respective tokens, plenty of crypto exchanges are being launched as well. Binance is hard to miss though because their pull and daily trades are massive.
Changpeng Zhao’s Binance may have a cool name that rhymes with finance, but that’s not why they are a bigger pull compared with other exchanges. Binance offers over five hundred cryptocurrencies to its users that range from the first crypto (Bitcoin) to some of the more recent up and comers (Polkadot). Over five--hundred crypto coins are more than most exchanges are offering and that is a big pull in a market full of budding investors.
How Binance works
Binance, just like other exchanges, is an ecosystem where depositing, withdrawal, fundraising, listing, and delisting of cryptocurrencies happens. The fundraising aspect involves enthusiasts with a common goal of raising money to launch a token through Initial Coin Offerings.
To get started, traders have to create an account. Get all the verifications done by completing the Binance KYC requirements. When the account is ready, users can then buy crypto pairs and add them to their crypto wallets. The platform supports limit orders, where orders are executed at the limit price set by the trader; market orders, where orders are executed immediately at best market prices; and stop-limit orders, where orders trigger when the price reaches a specified level.
Apart from offering a ton of crypto tokens, Binance has some interesting features.
Binance is known for being the hub for trading cryptocurrency pairs. Trading crypto pairs simply means trading one crypto pair for another without the involvement of fiat currency. Here you can swap a bitcoin crypto pair with Ethereum, Litecoin, or other pairs.
Lower transaction fees
Binance charges a flat 0.1 spot trading fee. 0.1 is quite favorable compared to eToro’s 0.75% and Coinbase’s 0.5%. Withdrawal fees differ from crypto to crypto, with Bitcoin withdrawal going at 0.0005% with a minimum withdrawal amount of 0.001 BTC.
Binance has provided a portal that allows for peer-to-peer trading. Here, buyers and sellers get to interact and trade at zero transaction fees. Traders only get set back by the charge in the spread between the buy and sell price.
The Trust Wallet
Binance provides a safe wallet known as the Trust Wallet for all users. Google Play backed and highly rated the wallet. It also has great reviews among users that have held it for a while. Most crypto storing apps don’t get this kind of endorsement.
Binance.US unveiled a mobile app upgrade in December 2020 that included live price tracking. The app also incorporated features like automated recurring trading. The app is great for on-the-go users and it mimics all the usual Binance desktop interface features.
The Binance Blog
Yes, every exchange or company in the industry probably has a blog section, but no one does it quite like Binance. The Binance blog differentiates itself from others by not being stacked with self-promotion material. You get a mixture of news, tutorials, and other educational material.
Binance Pros and Cons
Let’s get to the bad news first before we get to the good stuff.
1. Difficulties in account verification
Several users have reported difficulties in getting their accounts verified. This can be a nightmare for users whose main attraction is Binance, and these kinds of users are many. Some users have used sites like Reddit to communicate their frustration.
2. Not available in the US
Binance is unfortunately not available in the United States, though U.S. users can make use of Binance.US. Binance.US is a useful offshoot of the exchange with matching engine and wallet technologies. Binance.US is limited compared to the main exchange in the number of trading pairs offered.
3. Unclear corporate structure
Binance has a decentralized corporate structure many commentators have termed as ‘opaque. Such a structure puts fear and doubts into investors. The exchange came out in August 2021 and announced that it will break its decentralized structure, a move that will likely put investors and regulators at ease.
4. High withdrawal fees
There is no free withdrawal option on the Binance platform. Withdrawal fees are also relatively high depending on your withdrawal method.
When it comes to Binance, I am convinced the pros far outweigh the cons.
1. Low instant fees
Binance has lower instant and non-instant fees than most of the other exchanges. The standard trading fee when trading crypto assets on Binance is 0.1%. If you have a positive BNB balance, the trading fee is slashed to 0.075%.
2. Extremely large coin selection
Binance has the largest coin selection in the industry. The platform hosts over five hundred coins and there is always a probability of that number being revised up. If you are trying to buy into a project early, Binance is the exchange you want to link up with.
3. Multiple useful extra features
Binance does a good job of making it easy and enjoyable for users to interact with the platform. The interface is great and there are several tools built in to enhance your trading experience. There are multiple order types, an order book, and charting tools.
4. Forum presence
Binance experts interact with users through the platform’s forum presence via third-party sites like Reddit. Binance would do well to look into having its own support forum, though.
Binance is one of the largest exchanges out there. There are tons of coins to choose from and this will help you diversify your portfolio properly. They also offer a sold range of extra services to make your trading experience easier. There is also a well-developed academy section, where you get news and tutorials, all aimed at preparing you for the Binance trading experience.
Binance also has advanced trading platforms with attractive products like staking, spot trading, and a crypto debit card.
Binance’s legal structure is opaque and so is its managerial structure. Under Hong Kong law, the exchange operates outside U.S. markets. The opaqueness makes it difficult for traders who want to know exactly who they are entering into a contractual relationship with when they sign up with Binance.
With the crypto industry still being largely unregulated, any opaqueness is quite uncomfortable for would-be investors. Binance has expressed intentions to be more transparent and that is quite laudable. I would try Binance, especially for the wide product range. The risk with Binance is the same with other exchanges, because they are not overseen by financial regulators.