Cryptocurrencies have become one of the most important investments of the 21st century. Investing in cryptocurrencies has never been easier than today. There are several cryptocurrency exchanges that people can have access to and easily trade cryptocurrencies. Perhaps the leading cryptocurrency exchange in today’s market is Binance.
Binance is one of those exchanges that has had dominance in the market as a platform but also as the core of multiple crypto-related projects. In this article, we are going to cover the essentials about Binance as an exchange, how it works, current projects, etc. We are also going to go through the steps of using Binance for trading cryptocurrencies. Once we do that, we can do a comparison of Binance and its competitors and see where it stands with its features.
What is Binance?
Binance is one of the most popular cryptocurrency exchanges in the world. Initiated in China, Binance’s headquarters are now located in Europe (Malta). One of the reasons for this change might be the speculations that Binance was not following regulations in Asia. Furthermore, blockchain-based projects were gaining larger support in nations such as Malta, where even the Prime Minister of Malta at that time gave full support and welcomed Binance to continue to operate with headquarters in that nation. In the Tweet, below Malta’s Prime Minister Joseph Muscat welcomes Binance in Malta.
Welcome to #Malta 🇲🇹 @binance. We aim to be the global trailblazers in the regulation of blockchain-based businesses and the jurisdiction of quality and choice for world class fintech companies -JM @SilvioSchembri https://t.co/3qtAQjOpuQ
— Joseph Muscat (@JosephMuscat_JM) March 23, 2018
Binance began receiving wide attention in 2017, as the trading volumes were beginning to increase. The trading services that Binance offers are some of the best in the market.
A wide variety of cryptocurrencies are supported on Binance. The likes of Bitcoin, Ethereum, Litecoin, and hundreds of others are fully supported and easily accessible by Binance users. But Binance also supports newly launched tokens by providing a platform for initial coin offerings (ICO). This is done through the Binance Launchpad. The Binance Launchpad aims to help developers raise funds for their projects by selling their tokens at a lower price than is usually expected to be launched. Binance is known for its quick implementation of a new cryptocurrency, and it usually does not take long for Binance to support a newly launched cryptocurrency.
Trading in Binance is achieved through the use of BTC, BNB (Binance’s native token), ETH, and most importantly USDT (stable coin).
With that said, it is worth noting that Binance has its own coin, the Binance Coin (BNB). This coin is mainly used for paying fees within Binance, as well as for trading purposes. The success of Binance as an exchange has a huge effect on the price of BNB. As Binance becomes more popular and gains more usage, the price of BNB can increase due to the increase in demand for paying fees within Binance.
Related: Binance Coin Price Prediction 2021 and Beyond – Will the BNB Price Surge Upwards?
Another aspect where Binance excels at is the support that they have from its team. The latter is actively engaged in making Binance better for users, and they also respond to feedback made by Binance users. Each of the members in the Binance supporting staff is technically skilled and professional, giving users the best solutions for every problem that they face while using Binance.
It is worth noting that Binance has also launched its own Decentralized Exchange (DEX). This DEX is responsible for providing services without having to pay additional fees since trades are done in a peer-to-peer manner. However, the Binance Exchange has much more trading volume than the Binance DEX since the latter is less accessible by users.
Even Binance in itself is not fully supported yet, as many countries have prioritized other exchanges or simply do not support cryptocurrencies at all. Nevertheless, Binance is continually working on being implemented in all the continents of the world. In 2019, Binance launched Binance Lite Australia. This initiative was to provide a medium for Australians to easily buy cryptocurrencies. By using Binance Lite, people in Australia can now use Australian Dollars (AUD) for investing in the cryptocurrencies that Binance supports.
Binance Safety
In terms of safety, Binance has made a name for itself among other cryptocurrency exchanges as one of the safest exchanges today. Despite the safety that Binance promotes, there are still various implications that made investors a little worried.
To begin with, Binance has had hacking attempts in the past. A notable example would be the hack attempt of March 2018. Using phishing websites, hackers managed to have access to people’s accounts. Once the hackers gathered enough accounts, they converted all the coins in possession into BTC and used them to buy Viacoin. This lead to a pump-and-dump scheme, as the hackers sold their token once Viacoin increased sufficiently.
However, this attempt was interrupted and the hacker was stopped. The repossessed funds are now designated for charitable organizations. Despite the almost successful attempt, Binance achieved a good reputation for managing to stop the hackers at the right time. Furthermore, Binance has promised to give a $250,000 bonus to people who manage to catch the hackers and depict all the schemes involved in this attempt.
Nevertheless, users themselves need to be more aware of the hacking vulnerability that the internet gives. Clicking unsecured links and providing personal information to untrusted sites are more than likely to harm you and your account in Binance.
There was another hack that was unfortunately successful. In May of 2019, a hacker managed to collect information and steal $40 million worth of cryptocurrencies. This caused a bit of uncertainty for Binance users. However, Binance reimbursed all the affected users from the hack. This allowed Binance to maintain a good reputation and show to communities that they care about the users. Nevertheless, this attack was the key example of why users need to store their purchased cryptocurrencies in a cold (hardware) wallet.
Read More: What is a Cryptocurrency Exchange?
How to Use Binance?
Below, we will show you step by step how to use Binance Exchange.
Step 1: Open an Account and Verify it
The first thing that users are required to do once they open a Binance account is to verify their account through a Know Your Customer (KYC) verification. In order to do this, users are initially required to upload an ID document that is legit and issued by the government. This can be a Passport, Driver’s License, or any other ID that can be verified by the authorities. In addition to the ID verification, users also need to upload a document that confirms the residential address that you type when you open your account. Such a document can be a utility bill that showcases your address. This is done to ensure that the person behind the account is real and to maintain safety levels in the exchange.
Each account is also linked to a mobile number. If you change your mobile number later on after verifying your account, you need to go through the KYC verification once again. There is a 2FA that secures your account, but this is entirely optional. However, it is strongly suggested that you set up 2FA because you increase the security levels of your account. The 2FA entails both Google authentication and SMS authentication.
Step 2: Fund Your Account
The next step you need to do once you verify your Binance account is to fund it. The easiest way to fund your account is by transferring funds from a wallet (if you already have one) into the account.
This is done by hovering to the taskbar and clicking on your funds. Once clicking “Funds”, you should click “Deposits”.
Then, you should click the cryptocurrency you want to deposit, preferably USDT since it is a stable coin. After selecting USDT, you are given a deposit address. You should type that address on the wallet that you want to get cryptocurrencies. Once typing the address in your wallet, you can determine the amount of USDT you want to transfer to your Binance account and simply click “Send”. It may take a couple of minutes until the funds are successfully added to your account.
Related: Top 9 Cryptocurrency Wallets in 2021
The other conventional way of funding your Binance account is by depositing fiat currencies through a credit or debit card. This is achieved through Biancne’s partnership with Simplex. After selecting the cryptocurrency you want to purchase by paying with fiat currencies and determining the amount you want to purchase, you then may simply press “Buy” and get your tokens. It might take some minutes until you receive your tokens, so it is better if you buy USDT to avoid slippage. Both Visa and MasterCard are supported.
Step 3: Start Trading
Now that you have funds in your Binance account, it is time to trade cryptocurrencies. At the top-right menu, click the “Exchange” button. There, you can select whether you want the “Basic” or “Advanced” interface. It is better if you select the Basic view if you have not previously traded in Binance.
On the right side, you can select the cryptocurrency you want to trade with along with the trading pair.
On the left side, there is a list of prices that the selected cryptocurrency is trading for among various traders. The top half indicates the selling prices, and the bottom half indicates the buying prices.
The bottom boxes in the middle are for buying and selling. There, you can simply decide how many tokens you want to purchase with the funds that you already have. After placing an order, it is then listed at the “Open Orders” until it is completed.
Once it is completed, your funds will be available at the “Deposits / Withdrawals” section. There, you can choose what to do next with your traded coins.
In terms of trading fees, Binance is one of the best exchanges in the market. With trading fees averaging as low as 0.1%, which is considerably lower than many other cryptocurrency exchanges, Binance is quite cheap to use.
Furthermore, if users use BNB as a trading pair, they receive a 50% discount for trading. That means that the trading fees by using Binance Coin are as low as 0.05%. Binance Lite users have slightly higher fees because the system is still progressing. The transaction fees for Australian users are 2.5% (50% discount if using BNB). Debit card transactions are higher.
In terms of trading amount, unverified users are not considered as level two users. Because of this, they may have limitations when it comes to the amount of money they can deposit and withdraw in Binance.
What are the Pros and Cons of Binance?
Here are the Pros and Cons of Binance Exchange
Binance Pros
Fees
In terms of fees, Binance is perhaps the best cryptocurrency exchange to exist. With fees as low as 0.1% (and 50% discount if using BNB), Binance has earned quite a reputation. Fees may be higher if using other payment options (up to 5%). However, that is still better than most other cryptocurrency exchanges.
Cryptocurrency support
Binance is known for being one of the best trading options when it comes to cryptocurrency support. Binance supports hundreds of cryptocurrencies today and has a considerable number of trading pairs.
Security
Even though there have been attempts to hack user accounts in Binance, the latter has responded quite well to compensate the affected users. Furthermore, Binance is continually increasing security levels.
Services
The services provided in Binance are what make it unique. Users can trade easily, and they can also benefit from multiple features such as Binance Launchpad, the lottery system, etc.
Binance Cons
Not available everywhere
Despite its incredible services, Binance is not yet supported everywhere. Even in the US, Binance has not gained full support yet. While this may change in the future, it is one of the setbacks that Binance has.
Account verification
There have been cases where account verifications have taken quite a long time or have simply failed. This has permitted users to freely trade in Binance since verification is much required.
Binance Vs. CoinBase
When it comes to competition, CoinBase is the biggest competitor of Binance. There are several areas where the two exchanges differ, and these differences might help you decide on which exchange you should use between the two.
First, Binance is cheaper than CoinBase when it comes to fees. This has given the upper hand to Binance in the market since traders usually favor cheaper services.
However, Binance can be a little complicating at first when compared to CoinBase. The latter’s platform is much more user-friendly, and this has been one of the reasons why many new traders begin their trading experience with CoinBase.
Nevertheless, Binance supports more than 500 cryptocurrencies, which is considerably more than other exchange platforms. CoinBase supports less than a hundred.
Additionally, CoinBase does not provide all the trading options that Binance does. This tempted expert traders to shift to Binance.
When it comes to government support, CoinBase is largely supported in the US. Binance, on the other hand, is not as much as CoinBase. Even the Binance.US exchange is highly limited in the US.
Also Read: Coinbase Review 2021 – What are the Pros and Cons of Coinbase?
Takeaways
- Binance is the world’s leading cryptocurrency exchange.
- Hundreds of cryptocurrencies are supported in Binance.
- Binance provides some of the cheapest trading fees in the market.
- Even though there have been attempts to hack user accounts in Binance, it is generally considered a very safe exchange.
- Users must undergo a KYC verification if they want to use all the features in Binance.
- Funding your Binance account can either be done by transferring tokens from another wallet or buying crypto with fiat currencies.
- While trading in Binance may seem complicated at first, it is actually very simple.
- As many advantages as Binance has, it also has some limitations (i.e. lack of support in the US).
- Binance’s biggest competitor is CoinBase. The latter has bigger support in the US and is more user-friendly, but it is more expensive and offers fewer services than Binance.