{"id":276309,"date":"2018-01-24T19:13:38","date_gmt":"2018-01-25T00:13:38","guid":{"rendered":"https:\/\/www.euvolution.com\/futurist-transhuman-news-blog\/?p=276309"},"modified":"2018-01-24T19:13:38","modified_gmt":"2018-01-25T00:13:38","slug":"worlds-biggest-crypto-exchange-in-just-6-months","status":"publish","type":"post","link":"https:\/\/www.euvolution.com\/futurist-transhuman-news-blog\/cryptocurrency-2\/worlds-biggest-crypto-exchange-in-just-6-months.php","title":{"rendered":"World\u2019s Biggest Crypto Exchange in Just 6 Months"},"content":{"rendered":"
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From Zero to World’s Biggest Crypto Exchange in Just 6 Months<\/h2>

Editor’s Note: A few months ago, Coin Central published a review<\/a> of an “up and coming” cryptocurrency exchange called Binance. Since then, Binance has rapidly grown to become the number one cryptocurrency exchange in the world. With such rapid growth, we’ve updated and expanded our original review in this new article…<\/em><\/p>

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Binance<\/span> is currently the world’s largest cryptocurrency exchange<\/a>, with over <\/span>$6 billion<\/span><\/a> in assets traded in an average 24 hour period. Binance’s rise to the top has been swift. Since its launch six months ago, Binance has grown at a rapid rate. <\/span>Millions of users per week<\/span><\/a> sign up to use the exchange, including 240,000 members last Wednesday alone. Wednesday’s daily record came after Binance lifted a temporary freeze on new member registrations.<\/span><\/p>

Binance is also the name of a cryptocoin (BNB) traded and used on the Binance exchange. Since the ICO six months ago, the value of BNB has risen with the growth of the exchange. BNB is now among the <\/span>top 30 cryptocurrencies<\/span><\/a> in the world by market cap.<\/span><\/p>

What about Binance makes it so compelling? Why are so many people signing up to use this new exchange? In this article, we’ll dive into those questions. 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.<\/span><\/p>

How Exchanges Work: Understanding Binance’s Advantage<\/b><\/h2>

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.<\/span><\/p>

Matching<\/span><\/h3>

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.<\/span><\/p>

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.<\/span><\/p>

Binance’s major innovation is their matching engine, capable of <\/span>1.4 million trades per second<\/span><\/a>. 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.<\/span><\/p>

Liquidity<\/span><\/h3>

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.<\/span><\/p>

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Most-traded asset pairs on Binance in the past 24 hours<\/p><\/div>

Binance has high liquidity in many different assets, not just Bitcoin and other top coins. In fact, as of writing, TRON is the <\/span>most-traded asset<\/a> on Binance<\/span> in the past 24 hours, with other altcoins in the top ten. This altcoin advantage is a virtuous cycle for Binance, and new coins often <\/span>choose to list<\/a> with Binance<\/span> over competing exchanges. This includes many <\/span>coins from Asia<\/span><\/a> that may not be available from Western-based exchanges. The wide array of assets available is another key reason for Binance’s rapid rise.<\/span><\/p>

Using the Binance Exchange<\/b><\/h2>

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.)<\/span><\/p>

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.<\/span><\/p>

User Experience & Interface<\/span><\/h3>

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Binance’s User Interface<\/p><\/div>

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, but also as a mobile app for iOS and Android.<\/span><\/p>

Another factor contributing to Binance’s rapid growth is its availability in eight different languages. The exchange supports users that speak English, Chinese, Japanese, Korean, Russian, Spanish, French, and German.<\/span><\/p>

Low Fees<\/span><\/h3>

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 <\/span>0.1% trading fee<\/span><\/a>. 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. With over $6 billion traded in a 24 hour period, even if Binance only receives 0.05% of that daily volume, that’s $30 million in revenue per day.<\/span><\/p>

Binance also charges <\/span>withdrawal fees<\/span><\/a> 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.<\/span><\/p>

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Examples of Binance withdrawal fees<\/p><\/div>

The Binance Coin (BNB)<\/b><\/h2>

Along with the launch of the exchange, Binance launched an ICO. BNB is an ERC20 token built on Ethereum<\/a>. The total supply is limited to <\/span>200 million BNB<\/span><\/a>, after which no more coins will be created.<\/span><\/p>

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.<\/span><\/p>

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Binance fees over time<\/p><\/div>

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 will also destroy 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.<\/span><\/p>

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.<\/p>