The Ins and Outs of Binance, the Exchange You Should be Using!
Binance stands for binary finance, integrating digital technology with finance. Since launching in July 2017, Binance has consistently ranked among the top-3 crypto exchanges in the world by trading volume. It recently achieved the top spot in the world on Dec 17th, with over $4 Billion (US) equivalent of cryptocurrencies traded in 24 hours.
Binance has distinguished itself with its superior exchange performance, smooth and easy to use interface, and battle-tested security. Binance is also the fastest growing crypto exchange in the world, with over three million users in five months.
Binance does not provide fiat (e.g. US dollars) to cryptocurrency exchange, rather focuses purely on crypto-to-crypto (BTC, ETH, LTC, XRP, etc.).
Binance is a relatively new company, established in 2017. It is headquartered in Shibuya-ku, Tokyo.
The team, headed by Changpeng Zhao, has decades of combined experience building and maintaining large scale financial systems as well as developing crypto applications. The team has worked on and operated a number of exchanges, and have accumulated a large network of partners in this space.
It is interesting to note Changpeng Zhao’s deep background in finance, trading, and blockchain technology. He is also the founder of BijieTech (company behind the underlying execution engine) as well as a co-founder of OKCoin (one of the largest Bitcoin exchanges in the world). The CMO is Yi He, one of the leading cryptocurrency experts in China and also a co-founder of OKCoin. They have a close partnership with the most promising blockchain protocol out of China, NEO smart economy (guide to buying NEO), headed by Da Hongfei (in fact, Binance offers fee-free withdrawal of NEO and GAS).
The Binance technical architecture is engineered from the ground up with security, efficiency, speed and scalability taken into the consideration. Binance claims that their matching engine is capable of sustaining 1,400,000 exchange orders / second, and is one of the fastest exchanges in the market today. This translates into knowing our trades should not get stuck due to the matching engine being overwhelmed.
The platform is designed to house 20 million users. As of 12/28/2017, Binance celebrated its 3,000,000th customer. With that many users, Binance claims its customer service is unparalleled to any other in the industry, offering support in both English and Chinese languages.
Binance Coin (BNB)
Binance has issued its own token coin, called the Binance Coin (BNB). A strict limit of 200MM BNC will be created, never to be increased. You can use BNB to pay for any fees on the platform, including Exchange fees, Listing fees, Withdrawal fees among others. These tokens can easily be stored on outside wallets.
Binance allocates 20% of the profits over each quarter to buy back the BNB tokens at the current market price. This is to continue until half of the BNB, representing 50 million of the total 100 million are totally burned. As a result, BNB should have a stable value and continue to appreciate over time.
In September 2017, Binance burned a total of 986,000 BNB tokens.
Binance’s use case for the token are as follows:
• It is used by the Exchanges’ users as the currency for exchange fees payment. This gives users a 50 percent discount in the first year of use.
• It is also used by participants to make investments in the Launchpad ecosystem of Binance
• Services such as the Binance Info Platform and the advertising that goes on the platform, as well as other features that are yet to come all attract some fees, and BNB is used to pay for all that.
As of 1/1/2018, BNB is $8.13 USD with a market cap of $805,311,556 USD and a volume of $62,846,900 USD. This data provided by coinmarketcap.com.
Binance charges a flat 0.1% fee on each trade and it is one of the lowest trading fees you will find.
As mentioned above, if you pay using their own token (BNB), you receive a 50% discount on the trading fee for the first year of trading , bringing it down to 0.05%. With this discount, Binance easily has the lowest fees in the industry.
When you turn on “ use BNB for fees”, the fees will have a discount. If you turn it off, Binance will charge 100% BNB deductible fees. See the section below, Coin Dust, on how to use BNB.
Binance is natively Chinese. By default, some of the documentation may start in Chinese and suffer from translation differences for other languages like English. We’ve not experienced a problem, however, with using the menus, reading basic help and navigation guides, etc. Although Binance is working hard to provide support in multiple languages, be aware you my stumble upon these translation issues.
Submit Support Tickets through an online form. Binance will respond via email. The official Binance Reddit page states that your ticket will be answered by someone knowledgeable with the system you are using or problem you need to be solved and not just some random support agent.
Because you can only purchase in whole numbers, after a trade you are often left with decimal fractions of the amount traded. For example, we might sell XRP to BTC. After the sale, there may be 0.00016 left over. You are not able transfer that amount to your wallet and it is too small to convert to another coin. Basically, you are left what “coin dust.” This has frustrated many users of Binance. To rectify, Binance is working on a solution where this dust will be converted to BNB.
Here is an example: Let’s say you want to buy 10 coins of TRON (TRX). Binance will charge a fee of 0.1 TRX, leaving you with a balance purchase of 9.9 TRX. Next, you want to sell that 9.9 TRX but you can only sell 9.0 TRX. Binance will charge another fee of 0.1 TRX. After the sale, you ended up with “coin dust” of 0.8 TRX which can sit in Funds until you put more TRX in there to purchase a whole TRX coin plus the fee.
The Solution is to turn on using BNB for payment of fees. That way, you can buy/sell other Altcoins (like TRX) and the fees will come from BNB. To do so, you simply purchase some BNB with BTC or ETH (remember, fiat exchanges are not allowed. You also must turn on the switch in your Account Setup to enable the Binance fees to be taken from BNB. See below for a screenshot.
Remember to purchase BNB prior to your trade. Because your trading fees are so low, 0.05% using BNB, you can calculate how much BNB you need to keep in your Funds based upon your expected exchange purchases. BNB must be purchased in whole numbers. As of 1/2/2018, the price for one BNB was $8.52 USD.
Ok, so obviously it isn’t good to have your coin wallets filled with dust. The BNB trick works, but you’ve got to do the math in your head and you will still have dust, especially in your BTC wallet. As recently as December 22, 2017, Binance confirmed they are working on a solution to “sweep” the dust into your BNB wallet and therefore put it to good use in paying the trading fees.
Deposit and Withdrawal Fees
Binance is a cryptocurrency exchange and does not allow funding of your account with fiat currency. Cryptocurrency fund deposits are allowed and there’s no limit on the amount that can be deposited, nor are there any fees for deposits.
For Withdrawals, there is a minimum number of cryptocurrencies that are required before you can execute a Withdrawal. The minimum number is different for each cryptocurrency on the Exchange. For example, to withdraw TRX (TRON), 600 TRX are required to be in the account to enable the Withdraw transaction to be executed.
Also, Binance charges a small Withdrawal fee which is bases upon the exact cryptocurrency you are withdrawing out of the Exchange. The table for this fee can be found here. By example, if you were to Withdraw BTC, 0.001 BTC will be charged as a fee. If you are Withdrawing XRP, 0.15 XPR will be charged. The fees are constantly re-evaluated and adjusted, so check the table frequently for the latest charges.
Binance has iOS and Android versions of its app to allow access to trades, deposits, withdrawals, market data as well as account/profile edits. Download the Binance app from the Google App Store.
The iOS app can’t be downloaded from Apple’s App Store, however. To download it, do the following:
Navigate to Binance.com iOS download link using the Safari browser and install the APP on your iPhone. Once downloaded, you will have to navigate to General->Device Management to enable Trust of the app on your phone.
Once in General->Device Management, Trust the application. If successful, you should see the following:
Step 3 — Start Trading
Executing Trades on Binance
Admittedly, when you first connect to the Binance.com site, the “look” of the site is a bit overwhelming. Once you get past the distractions of the numbers and colors, actual trade execution is quite easy and straight forward.
See my Blog, How to Buy Ripple Cryptocurrency, for step-by-step instructions on how to buy Altcoins. Bitcoin, Litecoin and Etherium can be purchased on Coinbase (instructions in the blog). Other currencies will have to be purchased on Binance using the instructions — also in the blog. The example is for the purchase of Ripple (XPR) but you can substitute any other altcoin, like Tron (TRX), for instance.
Binance gets positive feedback from the community despite being relatively young. With its low trading fees, diversity and quantity of available coins and fast trading engine, Binance is certainly a good place for your important trading.
If this blog helped you at all, I welcome your Bitcoin, Ethereum, Ripple and Litecoin tips. My addresses are below and your support is greatly appreciated! :)
Disclaimer — I am not affiliated with Binance. I am only providing information, not investment guidance or advice. Please consult a financial advisor or lawyer.