Binance Cryptocurrency exchange review

Binance is a cryptocurrency exchange that provides traders and investors with an electronic platform to trade up to 500 cryptocurrencies. It offers one of the lowest fees on the market which is sweetened by a further discount when you choose to pay with Binance Coin (BNB).

Established in 2017, Binance is the largest cryptocurrency exchanges in the world in terms of trading volume with a 2 billion average daily volume. Binance was founded by Chinese-Canadian business executive, Changpeng Zhao, and delivers a secure, fast and seamless trading experience which is fueled by its own digital token, Binance Coin (BNB).

What is a cryptocurrency exchange?

A cryptocurrency exchange is a digital marketplace where traders can buy and sell cryptocurrencies using Bitcoin, altcoins or fiat currencies. It’s an online platform that acts as the go-between buyers and sellers in the cryptocurrency market.

How does Binance Exchange work?

Binance works like an online retail brokerage but its focus is on cryptocurrency trading. Traders pay a currency conversion fee when they buy and sell cryptocurrencies in the same way they would trading fiat currency in the forex market.

The same ordering system used by forex brokers is used to buy and sell Bitcoin and altcoins on a cryptocurrency exchange. The taker (buyer) places a market order or a limit order which is then sold when a corresponding cryptocurrency is available from the maker (seller). Basically, Binance’s exchange platform matches buyer with sellers.

When a market order is selected

The trader authorises Binance to trade the digital coins for the best available price in the online marketplace.

When a limit order is set

The trader authorises Binance to trade digital coins for a price below the current ask price or above the current bid price, depending on whether the trader is buying or selling.

What is the Binance ecosystem?

The Binance ecosystem is comprised of:

  • Binance Labs; venture capital arm and incubator
  • Binance DEX; decentralized exchange feature developed on top of its native, community-driven blockchain software system, Binance Chain
  • Binance Launchpad; token sale platform
  • Trust Wallet; official multi-coin wallet and dApps browser
  • Binance Academy; educational portal
  • Binance Research; comprehensive market analysis
  • Binance Charity Foundation; blockchain-powered donation platform and non-profit for aiding in sustainability

How to buy and sell cryptocurrency on Binance

You need to register online with Binance and go through the verification process to authenticate your identity. Once the authorisation is successful, your account is opened and you can transfer funds into your Binance wallet.

Binance is what is known as a decentralised exchange (DEX). These exchanges are operated without a central authority and allow peer-to-peer trading of digital currencies without the need for an exchange authority to facilitate the transactions.

The main difference between an exchange like Binance and an exchange like the New York Stock Exchange or the London Stock exchange is that the backend of a decentralised exchange exists on a blockchain. Basically, no central authority can take custody of your funds and you don’t need to trust the exchange itself to the extent you need to when using a regular stock exchange.

Binance regulation and security

Is Binance regulated?

No, Binance is not regulated by a recognised top-tier authority. However, in 2019, Binance received security accreditation by the International Security of Organisation (ISO).

The certification is audited and certified by DNV, the world’s largest accredited registrar and classification society, and United Kingdom Accreditation Service, the sole national accreditation body recognised by the British government.

To obtain the ISO/IEC 27001 accreditation, Binance passed the examination of 114 criteria across 14 categories, including security policy, asset management, operation security, and information systems acquisition, development and maintenance.

Where is Binance regulated?

In April 2021, the SEC (US-based Securities and Exchange Commission) warned the trading public that Binance is not yet a licensed digital asset operator under the Digital Asset Business Decree BE 2561.

A report published in April 2021 by authors of the LSE Business Review stated; “Binance is operating several exchanges in addition to the central Binance platform, arguably to avoid full regulatory security; brand compliant independently in Singapore and US”.

  • Binance US is regulated by the SEC (US-based Securities and Exchange Commission)
  • Binance Singapore is regulated by the Monetary Authority of Singapore (MAS) and backed by the Singapore Exchange

Is Binance legit?

Yes, Binance is a legitimate company offering cryptocurrency traders a reliable digital platform to buy and sell up to 150 cryptocurrencies.

The fintech company has experienced its fair share of start-up problems, including a major hack in May 2019 . Despite this, Binance has experienced impressive growth in the short time it has been in operation. Binance’s popularity is driven by its low fees, a responsive exchange and world-class developers who are on a mission to “accelerate cryptocurrency adoption and increase the freedom of money”.

Is Binance available to US traders?

Yes, the Binance exchange platform is available to US traders through Binance US, an independent entity that is licensed by the SEC and fully compliant with US-regulations on cryptocurrency trading.

Binance licenses its technology to Binance US and lends its branding support. There are only a few states in the United States that Binance US can’t yet service.

Why is Binance banned in the United States?

Binance’s original move to ban traders in the United States from using its platform came off the back of the US government launching twin legal cases against crypto derivatives exchange BitMEX. The US Department of Justice and the Commodity Futures Trading Commission charged BitMEX and its founders for violating know-your-customer (KYC) and anti-money laundering regulations, among other allegations.

Is Binance available to South African traders?

Yes, traders in South Africa can use Binance to buy Bitcoins and other altcoins peer-to-peer. You can convert your ZAR into BTC in a fast, easy and secure way without paying fees.

Register a free Binance account via computer or download the app. Complete Level 2 identity verification (also known as KYC, Know Your Customer. This will help create a high security level for your investment and protect your account on the market. 

Binance P2P is the best way to buy Bitcoins peer-to-peer in South Africa. You can convert your ZAR into BTC in a fast, easy, and secure way without paying fees. If you want to start making money trading Bitcoin, keep reading this step by step guide.

Is Binance safe to use?

Yes, Binance is safe to use. It is the largest cryptocurrency exchange in the world by trading volume and has a proven track record. The risk lies with keeping your digital assets in an exchange wallet for a long period of time because of the risk of the exchange being hacked, as happened to Binance in May 2019.

According to a report published by cryptonews; since 2011, over $1.65 billion worth of crypto assets have been stolen, and the numbers are getting bigger every year. According to Hackernoon, “that amounts to a jaw-dropping $12.6 billion loss when values are adjusted for inflation”.

Cryptonews states; “There’s no guarantee that you won’t become a victim of another high-profile hack but choosing a reputable and highly secure exchange significantly reduces your chances. The best and most reliable platforms are open about the level of security they provide and give you a plethora of tools to secure your account.”

Security features every reputable cryptocurrency exchange should have

HTTPS certificateHTTPS is an encrypted version of the HTTP protocol. It prevents capturing and changing data you’re sending to a web server.  
Secure passwordGood exchanges don’t allow you to set a weak password. A secure password asks you to use a mix of regular and capital letters, symbols, and numbers, thus ensuring that no one can brute force it.  
Two-factor authentication (2FA)Most exchanges offer multiple 2FA methods including software, SMS, and hardware devices. If there is no option to secure your account with 2FA, then the platform is quite insecure.  
Cold storageCheck if the exchange uses cold storage to store user funds. It is much more difficult to steal funds that are locked offline than those which are held in a hot wallet.  
Ability to Whitelist IP and withdrawal addressesSee if you can whitelist specific IP addresses for connecting to your exchange account. If enabled, it automatically blocks logins from other locations. Alternatively, some exchanges offer an option to whitelist your withdrawal addresses. If you can do so, the exchange will allow your funds to be withdrawn only to the previously approved addresses.  
Funds insuranceCryptocurrencies are still wildly unregulated, so most platforms have no obligation to follow FDIC reporting regulations or securities investor protection procedures. Yet, some exchanges take extra precautions and insure their funds from theft. Although that is a great marketing point, most of these insurance policies do not protect individual accounts and apply only to exchange as a whole.  
Other precautionsExchanges employ many other security tools like multi signatures, suspicious behavior alerts, email encryption, phishing protection, and others. Extra security measures certainly won’t hurt you, and as long as they are well implemented, they make exchanges quite safe temporary storages for your cryptocurrencies.  

Source: cryptonews

How to sign up for a Binance account

  1. Open the Binance homepage; available on web browser or the Binance app (iOS and Android)
  2. Click on Register in the top right corner
  3. Input your email address and choose a secure password; use the referral code from a friend if you have one
  4. Follow the simple instructions for verifying your account; input the code sent to your email address or mobile phone
  5. Once your information has been verified, your Binance account is open

Binance limits

Binance has a very simple limit structure, there are only withdrawal limits:

  • Level 1 verified accounts can withdraw up to 2 BTC every 24 hours
  • Level 2 verified accounts can withdraw 100 BTC every 24 hours

Verification requires filling out a basic Know-Your-Customer (KYC) form and providing proof of identity among other documents.

Types of transactions supported

Binance offers a massive selection of transaction types, including:

  • limit order
  • market order
  • stop-limit order
  • trailing stop order
  • post only order
  • peer-to-peer trading
  • margin trading
  • one-cancels-the-other order

What digital coins does Binance support?

Binance is famous for supporting a massive list of altcoins as well as Bitcoin. Non-US traders have the choice of more than 500 coins on the central platform, including Binance Coin which is the native coin of the Binance exchange that fuels the decentralised trading platform. Binance US exchange supports 52 coins.

What is Binance Coin (BNB)?

Binance Coin (BNB) is the native coin of the Binance cryptocurrency exchange. It has been built on the Ethereum blockchain using the ERC20 token standard. BNB empowers the cryptocurrency platform and fuel its operations to establish a sustainable ecosystem.

Binance’s native coin can be used for a multitude of purposes including paying the listing fee, exchange fee, trading fee or any other charges that a user may incur on the exchange.

Launched in 2017, the funds raised by selling BNB tokens were used to develop the exchange, branding and marketing. A percentage of the investment was also spent on adding necessary upgrades to the Binance cryptocurrency exchange.

You can’t mine tokens as they have been pre-mined and distributed through ICO. Binance will issue a maximum of 200 million BNB tokens.

When you purchase Binance Coin tokens or make any other trade on the Binance exchange, you’ll pay 0.1% of the trading amount. Currently, if you pay for your trades with BNB, you will get a 50% discount. Binance offered a 50% trade discount on fees when trading with BNB. This was reduced every next year with the discount ending in mid-2022.

Binance deposits and withdrawals

Binance allows you to deposit funds into your account using bank wires, direct bank transfers, credit or debit cards, bank drafts and money orders. You can also use digital payment methods, including PayPal, Western Union, Yandex Money, Sberbank, Payeer, M-Pesa Kenya, Monobank, BBVA and BancolombiaS.

You can withdraw money from your Binance account using the same options but money withdrawn must be returned to its source.

How to deposit BNB from your Trust Wallet on Binance

  1. Log in to your Binance account; move your mouse over Wallet and select Fiat and Spot.
  2. Click on Deposit
  3. Select the Crypto tab
  4. Choose the cryptocurrency you would like to deposit
  5. Select which one you’d like to make your deposit on if the cryptocurrency is issued on multiple networks
  6. Copy and paste your deposit address and a MEMO in the appropriate fields in the wallet
  7. Tap on BNB in your Trust Wallet
  8. Tap on Send
  9. Paste the deposit address and MEMO from the deposit page on Binance; you can also use your phone camera to scan the QR code
  10. Confirm the transaction; once you’ve deposited cryptocurrency from your Trust Wallet, check its status in a block explorer by search for the transaction ID
  11. Confirm your incoming deposit under your Transaction history on Binance

How to buy cryptocurrency with fiat currency on Binance

  1. Log in to your Binance account; move your mouse to Wallet and click on Fait and Spot
  2. Click on Deposit
  3. Select the Fiat tab
  4. Complete the identity verification by clicking Verify Now and follow the simple instructions
  5. Select the fiat currency you’d like to purchase cryptocurrency with and the payment method; credit or debit card, bank transfer or buy with a cash balance
  6. Enter the required information and follow the simple instructions

How to trade cryptocurrencies on Binance

Use the Convert feature on the Binance trading platform if you are a beginner trader and not used to the traditional trading interface. You can access this by hovering your cursor over Trade and selecting Convert from the Binance homepage.

  1. Pick the cryptocurrency pair you want to trade; fiat currencies are also available if you want to cash out and buy crypto with fiat
  2. Select the digital coin you are exchanging in the top field and input the amount
  3. Use the bottom field to select your desired cryptocurrency or fiat currency
  4. After confirming your selection, the trade will take place on the market place; trading fees are applicable and taken automatically

How to secure your Binance account

  1. Use a strong password and change it regularly

Your password should always contain uppercase and lowercase characters mixed with symbols and letters. Keep it safe and do not share it with anyone.

  • Enable Binance two-factor authentication (2FA)

2FA creates an extra layer of security, meaning that even if hackers compromise your password, they will need access to your physical 2FA device to log in.

  • Enable the Binance anti-phishing code

When you add an anti-phishing code to your Binance account, every email you get from Binance will have this code displayed at the top. This way, you can be sure that the message you are receiving is actually from Binance and not from a fake email address. In other words, it helps you prevent phishing attacks.

Binance fees and commissions

Binance is well-know for its low fees; starting at 0.02% / 0.04% for makers and takers, respectively.

  • 0.02% to 0.10% purchase and trading fees
  • 3% to 4.5% for debit card purchases
  • free Single Euro Payments Area (SEPA) transfer or $15 per US wire transfer

Binance has undercut its fees; other cryptocurrency exchanges charge upward of 0.2%.

The native coin, Binance Coin (BNB) also provides an additional discount on this trade fee of up to 50%.

Deposits are free; however, you will incur a blockchain fee that is always paid by the sender.

Withdrawal fees do apply; they generally correlate with the blockchain transaction fees.

Binance fees versus other cryptocurrency exchanges

Binance0.10%
Coinbase Pro0.25%
Bittrex0.20%
Bitfinex0.10%
Kraken0.26%

How does Binance make money?

Binance makes money on a fixed per-trade fee.

Pros and cons of Binance

Pros  One of the cheapest crypto currency platforms to use Over 500 cryptocurrencies for trade Discount fee for trading with Binance Coin (BNB), Binance’s native digital coin Large selection of transaction types Advanced charting with hundreds of indicators and overlays Option to use Trust Wallet, a third-party digital wallet FDIC-insured USD balances Rewards center offering challenges and giveaways as a way to earn cryptocurrencies  
Cons  Binance not available to US traders; can use Binance US but platform is limited compared to central platform   No built-in digital wallet

Who is the CEO of Binance?

Changpeng Zhao (赵长鹏) aka “CZ” is the founder and CEO of Binance. Zhao was born in Jiangsu province, China. In the late 1980s, he moved with his family to Vancouver, British Columbia, Canada. His father was a professor in China before he was branded “pro-bourgeois intellect” and exiled from his country.

Zhao attended McGill University in Montreal, Canada, where he majored in computer science. After college, Zhao began working for the Tokyo Stock Exchange, developing software for matching trade orders. He also worked at Bloomberg Tradebook where he was a developer of futures trading software.

In 2005, he moved to Shanghai where he founded Fusion Systems, known for “some of the fastest high-frequency trading systems for brokers.” Beginning in 2013, Zhao worked for various cryptocurrency projects including Blockchain.info and also served as Chief Technology Officer of OKCoin.

In 2017, Zhao left OKCoin to start a cryptocurrency exchange called Binance. He launched the company in July 2017, following a $15 million funding raised during an initial coin offering. In less than eight months, Zhao grew Binance into the world’s largest cryptocurrency exchange by trading volume, as of April 2018.

In February 2018, Forbes Magazine placed the 44-year old cryptocurrency guru third on their list of “The Richest People In Cryptocurrency”. As of 2021, his net worth is estimated at $1.9 billion. Zhao has revealed that nearly all of his net worth is invested in cryptocurrency.

Forex Trading Africa Disclaimer

Trading cryptocurrencies carries a high level of risk and may not be suitable for all investors. Before deciding to trade cryptocurrency you should carefully consider your investment objectives, level of experience and appetite for risk. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money in cryptocurrency trading that you cannot afford to lose.

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