What is Binance?

Cryptocurrencies have grown in popularity in recent years, and with that has come an increase in demand for cryptocurrency exchanges. Binance is one such platform that has risen to prominence in the trading world. In this article, we’ll look more closely at Binance, how it works, and why it’s important for new traders.

Binance is such a household name in the crypto world that it is nearly impossible for anyone to be unfamiliar with it. It is regarded as one of the most dependable platforms available, with a long track record of dependability and trust. Furthermore, Binance’s platform is now available in most countries, including the United States.

Table of Contents

Binance is a cryptocurrency trading platform that allows users to buy and sell various cryptocurrencies. It was established in 2017 and quickly grew to become one of the largest platforms in the industry.

Because of their presence, they are even one of the most well-known platforms in the world. Binance allows you to trade a wide variety of cryptocurrencies, including some of the most popular ones, such as Bitcoin (BTC), Ethereum (ETH), and even its own native token, BNB.

What distinguishes Binance is that it is one of the most trusted platforms, has a simple user interface, and supports a wide range of cryptocurrencies. Trading with Binance is as simple as it has always been; all you need to do is register on the platform and confirm your information.

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Binance was founded by Changpeng Zhao, who is still the company’s CEO. He is a well-known entrepreneur who is extremely active on Twitter. He is a seasoned investor and a software engineer who is very interested in cryptocurrency. This is why he is regarded as the best candidate to run such a platform in the first place.

He began the exchange in July of this year, and it quickly grew in popularity. It has now grown and completely changed people’s perceptions of cryptocurrency exchanges. Binance currently sells over 600 different cryptocurrencies and tokens on its trading platform.

Binance has invested heavily in new projects such as stablecoins since its inception and later announced a partnership to facilitate Visa and Mastercard purchases. Simplex’s local bank restrictions govern the purchases, which are limited to Bitcoin, Ethereum, Litecoin, and Ripple’s XRP.

The History of Binance

Binance is considered relatively new in the cryptocurrency industry, but they have a long history. Before founding Binance in 2017, Changpeng Zhao worked on other blockchain projects. In less than a year, the company grew to become the largest cryptocurrency exchange. The company was founded in China, but its headquarters were later relocated outside of the country.

The company only grew in size over time, until they revealed that they had been the victim of a security breach. In 2019, hackers stole approximately $40 million in Bitcoin from a cryptocurrency exchange. They froze further withdrawals until they could resolve their cybersecurity issues.

As time passed, the company expanded into more countries. However, the company’s steady rise was not without controversy. Forbes published a detailed document in 2020 stating that Changpeng Zhao had designed a coordinated strategy to deceive the United States. Furthermore, it was reported in 2021 that Binance was under investigation by both the IRS and the US Department of Justice. Binance US is currently facing a lawsuit filed by the Securities and Exchange Commission (SEC) in 2023.

Changpeng Zhao, founder and CEO of Binance. Source: Reuters

The demise of rival cryptocurrency exchange FTX also contributed to Binance’s rapid growth. They later offered to buy FTX’s non-US operations in order to alleviate the latter’s liquidity crisis. The platform wields considerable power in the DeFi community. As a leading crypto exchange, they have expanded into many areas and now dominate certain continents.

Overall, Binance is still one of the most powerful global cryptocurrency exchanges. They are the driving force of innovation in this field and continue to be dominant today.

Binance’s Native Token

Binance Coin (BNB)

What makes Binance unique is that it has its own native token. Binance Coin (BNB) is the name of the native token. The coin was launched in 2017 and runs on the Binance Smart Chain (BSC). The Binance coin employs a novel technique known as Proof of Staked Authority. In layman’s terms, this method is a hybrid of Proof of Stake (PoS) and Proof of Work (PoW).

The current price graph of Binance Coin (BNB)

The BNB Chain is unique in that it supports smart contracts while also being compatible with other technologies. It can, for example, work with the Ethereum Virtual Machine (EVM). Nonetheless, there have been some known cases of users exploiting the network in the past due to its level of centralization.

Binance USD (BUSD)

Binance also has its own stablecoin, known as Binance USD or simply BUSD. It functions similarly to most other stablecoins and is pegged to the US dollar. Binance and Paxos, a company partnership, created this stablecoin. The BUSD token is created through a complicated process on the Ethereum blockchain.

BUSD has gained traction in the stablecoins community and has risen to become one of the most widely used stablecoins. Its main competitors are other altcoins such as Tether (USDT) and USD Coin (USDC), both of which are widely used in the industry.

The Advantages of Binance

Binance provides some features that other cryptocurrency exchanges do not. This is where Binance distinguishes itself and explains its popularity.

Commissions and Fees

Binance really shines when it comes to commissions. Fees are quite low in comparison to other crypto exchanges, and they continue to fall over time. Binance also provides a lot of discounts, which you should keep an eye on. Fees vary depending on the cryptocurrency, and if you use Binance’s native stablecoin BUSD, you can get even lower fees.

The fees are determined by the tier of the cryptocurrency you wish to trade in. For example, there are three main tiers, with Ethereum and Bitcoin on Tier 0 and offering zero fees if moving from USD. Tier 1 includes some popular cryptocurrencies with low transaction fees, such as Dogecoin and Solana. Tier 2 follows Tier 1 and includes all other cryptocurrencies not mentioned in the previous tiers.

Large Range of Cryptocurrencies

Binance provides a wide range of cryptocurrency options. It is undeniably more than what financial platforms like Robinhood provide. It includes some of the most well-known names, ranging from Bitcoin and Ethereum to new and recently issued tokens. Other cryptocurrency exchanges can only come close to what Binance provides. Keep in mind that the platform only offers cryptocurrency and not other types of securities.

Staking Rewards

Binance’s staking program is quite interesting. Binance allows customers to stake their own cryptocurrencies in order to receive additional rewards. Coinbase, a major competitor of Binance, is another popular exchange that provides this service. Any user can get started and earn rewards by staking a few cryptocurrencies. You earn rewards on a daily basis, but they are distributed on a weekly basis.

Binance US

Binance has historically had issues with US regulations since attempting to expand in the country. The original cryptocurrency exchange was banned in 2019 due to regulatory issues. Binance decided to open another cryptocurrency exchange, Binance US, in response to the ban.

The US only platform is a straightforward extension of Binance that fully complies with US regulations. Before implementing the platforms, they ensured that they complied with all federal US laws. It quickly became a popular cryptocurrency exchange in the United States.

🚨 Investor withdrawals surge high as SEC charges the crypto exchange #Binance! 💰

— Walletor (@walletorapp) June 6, 2023

Nonetheless, the platform continues to face challenges and is currently banned in six states. Furthermore, they are subject to regulatory scrutiny by the Securities and Exchange Commission (SEC). The recent allegations leveled against Binance US have shaken the crypto community to its core. The platform has been accused of everything from money laundering to evading US law.

Trading on Binance

Trading on Binance is essentially one of the simplest things you can do. Binance, like other platforms, provides a variety of crypto-related services that are easily accessible to any user. Furthermore, crypto developers can create their own unique tokens on the platform. This is possible with Binance Smart Chain (BSC), and as of today, a large number of tokens have been created. However, new tokens must be approved by the platform before they can launch their initial coin offering (ICO).

All you need to get started trading on the platform is a digital wallet and an account on their platform. However, before you can begin using the platform fully, you must first complete the verification process. This is accomplished using the know-your-customer (KYC) method.

The Homepage of Binance

After your account has been checked and approved, you will have full access to all of the platform’s features. You can begin buying any cryptocurrency you want. Binance Wallet is the platform’s own integrated digital wallet where you can store any cryptocurrency you purchase. If you are completely new to the crypto world, we recommend that you first watch a few videos on how to use the platform before you start.

Securing your Binance Account

For new traders, securing their trading accounts is critical. It is best to adhere to the security protocols that Binance has established for users.

Step 1: Create a Strong Password

Before you register, one of the first things you must do is create a strong and unique password. This is critical and should be done not only on Binance but also on all other websites. Many people stick to easy-to-remember passwords that they use across multiple platforms. If bad actors obtain your password, they will have easy access to all of your accounts.

By creating a strong password that is distinct from your other passwords, you can protect yourself from a variety of unwanted risks. If someone obtains one of your passwords, they will not be able to access everything. Make use of capitalization, symbols, numbers, and as many as 12 characters. Passwords that are easy to guess ought to be prevented. This is due to the ease with which brute-force password-cracking tools can decipher them.

Step 2: Utilize Two-Factor Authentication (2FA)

Binance provides two-factor authentication to all of its users in order to further secure their accounts. This is an extremely important step in securing your account. When you enable it, you have several options for confirmation, including SMS messages, Google Authenticator, and other methods.

This step is critical because it allows users to confirm their identity every time they log into their account or make important decisions. For example, if someone tries to log into your account, they will be unable to do so until they receive the special code that is only sent to you. Once this is done, your account will generate a random code every time someone attempts to log in.

Because there is a well-known way for hackers to swim swap your special code via SMS, we recommend that you use other methods to secure it. However, any method you choose will be far more secure than not having it enabled at all. You can also use YubiKey to require a USB every time you want to access your account. This is a hardware solution that validates your account using Near-Field Communication (NFC) technology.

Step 3: Limit Withdrawal Addresses

Binance provides another solution that allows users to withdraw funds only through specific accounts. This feature is known as Adress Management. Before withdrawing funds, you must specify which wallets are permitted to do so.

This adds another layer of security to your account. This way, if a hacker gains access to your account, he will be unable to withdraw funds using his own wallet. However, for some people, this may be a hassle, so only do it if absolutely necessary. Even with these security credentials, you should only keep the cryptocurrency that you trade on an exchange.

Conclusion

Overall, Binance is an excellent platform for pretty much any type of user. It is a user-friendly exchange that allows both new and experienced investors to easily trade their valuable cryptocurrency. On top of that, it has a slew of features that make the platform an excellent choice and a market leader.