Binance Exchange Review
Binance has only been in operation a short time compared to other cryptocurrency exchanges, but the platform has gained a strong following. The exchange was founded in China and has managed to withstand the Chinese ban on exchanges by maintaining operations in Hong Kong and Japan. Binance has suffered serious security breaches and attacks in the past, prompting the exchange to offer a $250,000 bounty on hackers that attempt to compromise the platform.
Binance was launched in 2017. It was originally a Chinese business entity based in Hong Kong. When the Chinese government effectively banned cryptocurrency exchanges, Binance relocated to Tokyo. The company still seems to maintain offices off the Chinese mainland in Hong Kong, but it is not permitted to provide services to Chinese citizens. The exchange has also recently declined to accept new traders from the United States.
The exchange was founded in 2017 by Changpeng Zhao, a citizen of China who once sold his home and other possessions to invest in Bitcoin. In July of 2017, Zhao devised an ICO for the BNB token. Originally worth $0.10, the value of the token ultimately rose to $13. Zhao was the primary holder of the asset and made a sizable profit. He used the capital earned from cryptocurrency investments to start Binance. In less than one year, the exchange climbed into the top five of all cryptocurrency exchanges and has six million users.
Some of the attractive features of the exchange include a crypto-to-crypto service model, a large number of ICOs, and extremely fast execution of orders. While the platform is geared toward professional traders, there is also an account offered which is suitable for those with limited trading experience.
Binance has a sophisticated trading engine and offers a vast number of currency pairs for trading. The company also has a low fee structure, but to get the best fees a trader is required to make a massive volume of trades each month. There are many tools available to users of the platform. These include charts and graphs that can help investors make decisions on the cryptocurrencies they wish to invest in.
There are two elements of controversy that have affected Binance since it was founded. One of them is the Chinese government’s decision to ban cryptocurrency exchanges. Some have speculated that the rapid rise of Binance was in some way responsible for the ban. Since the company was headquartered in Hong Kong off the Chinese mainland, it was able to evade some restrictions. Since the ban, the company has now found a home in Tokyo where the government is more accepting of cryptocurrencies.
The other problem encountered by Binance has been serious hacks and attempts to breach the security of the platform. The problem has become so significant that Binance announced in March 2018 that it would be offering a bounty of $250,000 for information leading to the arrest of hackers who attempted to gain access to the platform on March 7, 2018. The attack did not succeed, but Binance has stated that the effort was large-scale and well-planned. The company believes that offering a bounty may be the best way to discourage future hacking attempts, and considers it a proactive way to improve the security of the exchange.
Getting Started With Binance
It is first necessary to create an account with Binance by completing a simple sign up that requires a name and email address. Once this step has been completed, individuals may proceed to setting up the account proper. There are two types of accounts to choose from. The Basic account is more suited for those with limited trading experience. The Advanced account has more tools available to the experienced trader, and the platform looks totally different. Aside from limits, the real difference between the two accounts is the trading platform.
Things are made more complex by the presence of Level 1 and Level 2 account statuses. The Level 1 account does not require verification. Level 2 account holders are required to provide a photo ID and other verification documents. The process of verifying account can take a considerable amount of time, but unverified users can still use their account while the verification process of being completed.
The next step after creating an account is to deposit funds for trading. There is a Deposit and Withdrawal page where users are able to choose from various cryptocurrencies. Wallets for the various currencies can be linked on this page. Most users will find that making deposits with Bitcoin or Ethereum will be the most practical scenario. These two currencies offer the most flexibility when it comes to trading. However, multiple types of digital coins can be deposited and converted to the desired currency. It should be noted that no fiat transfers are permitted by the exchange. Only cryptocurrencies are accepted.
Once the account is funded, users can begin making trades immediately within the limits of their account type. There are many tools available to advanced users, but basic traders will be limited to candlestick charts for technical analysis.
Binance Fees and Limits
The fee schedule at Binance is low but complex. The fees for both Basic and Advanced accounts are basically the same, but there are differences in withdrawal limits for the Level 1 and Level 2 accounts:
- Level 1 Unverified Account—No deposit limit, 2 BTC daily withdrawal limit
- Level 2 Verified Account—No deposit limit, max withdrawal of 100 BTC per day
The company does state that higher limits are available on a case-by-case basis. Individuals will have to contact the exchange and discuss the possibility of higher limits which may require additional verification.
Beyond these basic limits, things begin to get complicated. The average fee for each cryptocurrency trade is 0.1%. It is possible to use the Binance (BNB) token to pay for trades and receive a 50% discount. This makes the trading fees at Binance among the lowest in the industry today. But, the catch is that Binance also charges a small fee for withdrawals. This fee is determined by the cryptocurrency being withdrawn. It can be as low as free for the NEO coin or as high as 50.0 for the USDT. You read that right. The exchange can charge up to 50 Tether to withdraw those tokens. Obviously, traders need to be aware of the fees that they are going to be paying before they make a withdrawal request.
Trading Cryptocurrencies at Binance
Binance makes trading fun, we’ll give them that. They recently offered a trading contest to award a Masarati and Mercedes Benz to the highest volume traders. These things may be beyond the reach of the average trader, but they can be fun for the investment whales.
There are a vast number of coins that can be traded at Binance, but there are only four base units. These are Bitcoin, Ethereum, Tether, and the Binance token. Nevertheless, a large number of pairings can be made. Some 48 coins are represented on the exchange.The trading engine at Binance is very advanced and processes orders with lightning speed. This is very useful for traders who may be involved in the game of day trading.
The trading options at Binance leave something to be desired. At the present time it is only possible for traders to make limit and market orders. This may change in the near future because Binance is a very new exchange. The developers of platform claim that they are investing a minimum of 20% of returns to improving the exchange.
Popular Opinion of Binance
Binance is still very new to the exchange market, so it is somewhat difficult to find online reviews that are credible. In general, the public opinion of Binance seems to be very high. Most of those who like the platform are those who trade in large volumes. But, this is who the platform is really designed for so that comes as no surprise.
The two negatives that pop up in searches on the company really can’t be blamed on the exchange. The first is the concern over the Chinese exchange ban. Some individuals were afraid that their accounts would be frozen and their funds lost. This did not happen, and Binance took the appropriate measures to move their operation before any trouble could take place.
The second is in regards to the hacks which have been directed at the platform. What should be stressed here is that serious hacks have been unsuccessful thus far, and Binance has taken extreme measures which include offering a bounty as a reward for those who provide information that could lead to the arrest of potential hackers.
Platform is intuitive
Committed to security
fiat deposits or withdrawals
Fee schedule is hard to understand
Limited trading options
Our Opinion of Binance
We would welcome the opportunity to revisit this review when Binance has had more time to gain a footing in the exchange industry. In the meantime, the company still gets high marks in areas like ease-of-use and low fees. We’d like to see an explanation of why some withdrawal fees are so much higher than others, but overall it doesn’t cost traders a lot of money to use the platform.
It is also encouraging that the company is taking strong steps to discourage hackers. A $250,000 bounty on anyone that is caught trying to hack the website is a reasonable deterrent. Another downside is that the exchange has limited trading options at the moment. We hope that in the future this will improve.
We award Binance 4 out of 5 stars on our cryptocurrency exchange rating scale