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Binance Review 2021 | Buy & Sell Crypto | Fees, Pros, Cons

Oliver
Scott
Updated: 07 Jan, 2021
15 mins read

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About Binance

Founded in China in 2017 by Changpeng Zhao (known by his initials CZ), Binance is the largest crypto assets exchange by volume having by now established itself as one of the more serious and reliable players in the space.

Binance has since moved its operations to the European Isle of Malta due to the regulatory hurdles associated with cryptocurrencies in China and Japan and has also launched a separate dedicated platform for its US customers, registered with FinCEN and fully compliant with US’s regulatory framework (adopting a Digital Asset Risk Assessment Framework according to the criteria of which it selects its listings of traded digital crypto-assets and blockchain projects).

Noteworthy, Binance is also considered one of the handful few cryptocurrency exchanges which do not fake volume or engage in activities such as wash trading (as recently it was revealed that more than 90% of volume as reported by Coinmarketcap had been faked, therefore recommending that one use other more reliable sources for tracking metrics such as Messari).

Binance is still a centralized custodial exchange, meaning that when using the platform one does not have direct custody over his assets. The otherwise decentralized assets are traded in a centralized manner where the back-end is overlaid with regular databases, trading off some of the main benefits of peer-to-peer crypto-assets for the sake of speed and efficiency (making it possible for them to be traded the same way as they would on traditional exchanges).

However, unlike other such exchanges in the past, Binance has proven itself reliable and responsible to its customer base as well as living up to set standards and regulations (and sometimes also setting the standards in the space), which is what has cemented its reputation and standing in legitimizing cryptocurrencies as an asset class.

Binance’s Reputation in the Industry

What makes Binance particularly attractive is its extensive list of supported crypto-assets and their trading pairs which include the industry hallmarks like Bitcoin and Ethereum as well as smaller and micro-cap tokens. Each token must fulfill Binance’s standards and criteria to even be considered for listing (and can also be de-listed for violating the terms).

In 2019 Binance exchange experienced a sophisticated cyberattack (it was hacked). At the time, thieves nabbed $40 million in Bitcoins, but thanks to Binance’s SAFU fund all losses were covered by the exchange and traders got all their money back immediately. This significantly strengthened Binance’s reputation in the cryptocurrency industry.

What is Binance’s SAFU fund? SAFU, the Secure Asset Fund for Users is an emergency insurance fund. On the 3rd of July, 2018, Binance announced the Secure Asset Fund for Users with a goal to protect the investors’ funds on the exchange. Thus, Binance allocates 10% of all trading fees received into SAFU to offer protection to users and their funds in extreme cases. All SAFU funds are stored in a separate cold wallet.

Binance’s Native Token Binance Coin (BNB)

Another aspect of Binance which makes it as appealing is its competitive trading fees (a flat rate of 0.1%) which are also further reduced by holding the platform’s native token, Binance Coin (BNB). The token had been issued and distributed in an ICO with the launch of the exchange (as an Ethereum ERC-20 token, the ICO itself raising ~$15 million at the time).

Binance offers an incentive to pay transaction fees in BNB by offering a 50% discount in the first year of membership which decreases every subsequent year for five years. The token is not just limited to that though, as one can also use it to invest in ICOs which participate in Binance’s Launchpad program, for example.

Please note: You can now buy the most popular DeFi tokens (Chainlink’s LINK, Compound’s COMP, Kyber’s KNC, Aave’s LEND, ZRX’s 0x and MakerDAO’s MKR and other) on Binance exchange as well. Interested in what is DeFi and how does it work? Read our comprehensive guide on how to earn passive income with DeFi here or press the button below.

How to Open and Use an Account on Binance?

  1. Create account. Head over to the Binance main web page (for the US citizens here) and proceed to register with an e-mail address and a password. Remember to use common sense when choosing a password, make sure it’s long enough and alphanumeric, including both upper and lower case letters as well as numbers. It is also advisable to set up two-factor authentication (2-FA) as an additional security measure, installing Google Authenticator on one’s phone for the purpose. This makes it so that each time you log in or perform any operation (such as to request withdrawal of funds), you’ll need to enter a unique number sent to you on your phone in order to confirm it is you performing the operation.
  2. Confirm your personal details. Undergoing a simple Know-Your-Customer (KYC) process is also required, which includes providing a full name, home address and country of residence and date of birth upon which one gets redirected to a third-party verification and KYC services provider (NetVerify) where to complete the process one must upload a copy of a government-issued ID (which can be an ID card, a passport or a driver’s license). Know-your-client and anti-money-laundering procedures are a crucial necessity for obtaining regulatory approval in order to launch and operate as a legitimate and trustworthy exchange in most jurisdictions around the world (with a few notable exceptions which provide exactly the opposite of that, tending to be tax evasion havens and/or cybercriminal hubs).
  3. Add funds. Fiat deposits via bank accounts and/or credit/debit cards are supported in a select number of countries, otherwise one ought to first purchase Bitcoin or Ethereum elsewhere (most commonly Coinbase) and then deposit them to his Binance wallet address for that particular asset. Once the deposit has been made (usually confirmed in no more than 20 minutes) one can start trading.
  4. Start trading and investing. Go to the ‘Exchange’ button at the top of the screen and choose between the ‘Basic’ or ‘Advanced’ trading platform interface. If you are just starting out and don’t have any previous experience trading, the first option gives a quick view of the market trading pairs and is recommended before jumping to the more advanced one.

Adding Funds to Your Binance Account

Up until not too long ago Binance had been primarily a crypto-to-crypto exchange with no fiat on and off-ramps, meaning that one had to buy cryptocurrency such as Bitcoin or Ether elsewhere and then deposit it to Binance.

Over the last year though limited support for bank accounts and credit/debit card deposits has been added through third-party payment processors and service provider partner companies (like Simplex in the EU or BAM for their US operations). Both Mastercard and Visa are accepted, although if the native currency is anything other than USD or EUR an additional charge may be incurred. Standard processing fees are 3.5% with a 10$ minimum which is slightly lower than Coinbase’s 3.99%.

Basic and Advanced Dashboards Compared

The Classic (previously named basic) interface is simpler and more understandable for beginners or those who like simplicity. The dashboard still gives you all the needed options to perform a buy/sell trade. It has a simple order book on the left with ‘Buy’ and ‘Sell’ buttons where one specifies the number of tokens to buy/sell or puts a price for which to buy/sell as many tokens.

Classic trading interface on Binance exchange. Recommended for beginners.
Classic trading interface on Binance exchange. Recommended for beginners.

The Advanced interface is more or less identical in functionality to what traditional trading platforms look like, with more sophisticated charting tools and advanced order types (such as stop-loss, stop-limit, etc.)

Advanced trading interface on Binance exchange. Recommended for beginners.
Advanced trading interface on Binance exchange. Recommended for beginners.

On Binance, there’s access to more than 500 trading pairs, and when a trade completes it is visible in one’s Binance account balance. It is generally advisable to keep funds on the exchange only when and if actively trading, otherwise if just holding an asset long-term with no intentions to trade Binance is not meant as a custodian and one is better off transferring his funds on to an external wallet – ideally, for larger amounts, a cold storage one.

Here is how to make the most commonly used “limit order” on Binance:

What is a “limit order”? A limit order is an order with a specific “limit price”, it means that it will only be executed once the market price reaches the price you set or better. Limit orders can be used to trade at lower or higher than the current market price, presuming the market reaches the price you have set.

Binance also offers an API that allows one to connect his account to any programmed trading bot or application and have them trade on one’s behalf in automating strategies and automatically responding to signals and events (taking advantage of arbitrage opportunities across exchanges, etc.).

To learn how to execute all type of trades (Limit, Market, Stop-Limit, OCO, Cross Margin, Isolated Margin) on Binance watch this video:

A tutorial on how to trade on Binance.

Customer Support and Communication

Ticket requests can be submitted via the account portal, but also Binance has a good, active in-account live chat and social media presence in Twitter, Telegram, and Reddit which may often provide quicker responses.

Any important announcements are usually broadcast on the official Binance Twitter account (there also being separate helpdesk one for customer service inquiries at @BinanceHelpdesk) while the Telegram group channels are always quite active and responsive to any questions and inquiries.

Additionally, @BinanceResearch provides current institutional-grade analyses and more in-depth insights for more sophisticated traders and investors.

Margin Trading and Futures

Margin trading has also been introduced and one needs to specifically apply for a margin account in making sure he understands the risks involved. The BNB token is used as the collateral against which funds are borrowed at a margin rate of 3:1 (noteworthy, platforms like BitMex offer up to x100 leverage).

Trading of futures contracts has been another addition and requires that one uses his regular Binance account to open a Futures account, again, making sure he understands the risks involved and what forward and futures contracts on underlying assets are.

Both long and short leveraged positions are available on Bitcoin and Ethereum as the underlying and as paired with Tether USD (USDT) – meaning that both the required collateral and the products themselves are priced in Tether USD (a stablecoin pegged to the value of the US dollar as a useful fixed-value instrument in these markets).

Staking Services for Proof-of-Stake Systems

Not least of all, the platform also provides staking services for assets that run on a proof-of-stake consensus (such as Tezos, Cardano, and in the near future also Ethereum).

It overall maintains itself up to date in covering all significant industry advances and upgrades, having established itself as the most widely used gateway to the world and markets of digital crypto-currencies and assets. In what follows we’ll provide quick guidance and overview of how to open an account and use the platform.

Binance’s Decentralized Exchange

Binance does also run a decentralized type exchange (DEX) which follows a different operational logic from the centralized counterparts. DEXes are non-custodial (one has direct control over his funds and trades directly from his wallet) and run and execute trades directly on the blockchain.

As such, they are considered more secure, much less vulnerable and susceptible to manipulation, but not as consistent in terms of transaction fees and speed of execution (due to the underlying architecture on which they run). And at present, the kinds of tradeable assets and pairs tend to also be limited to the ecosystem of the chain that the exchange runs on and the limitations of cross-chain interoperability.

In the case of Binance’s DEX, it was launched in March of 2019 on its own dedicated Binance chain, using BNB as its native platform currency which it migrated from its Ethereum ERC-20 token standard to a BEP-2 format on Binance chain.

As mentioned already, there are significant structural and technical differences between centralized and decentralized exchanges, but there are also hybrid constructions which centralize the order book and matching engine, but keep execution of trades and transactions on-chain, that way making them close to the speed and efficiency of centralized ones while maintaining the security guarantees of decentralization.

Pros & Cons

Binance PROS:

✔️ Established industry presence

✔️ Excellent reputation

✔️ Safe & secure

✔️ More than 500 crypto assets and pairs tradeable

✔️ Many useful features

✔️ Numerous payment options available

✔️ Active social channels

✔️ Great customer support

✔️ Has its own exchange token (BNB), which gives you many exclusive rights such as launchpad investing eligibility, lower trading fees, ability to convert low [other] crypto balances into BNB, and more.

Binance CONS:

❌ Perhaps not ideal for complete beginners

❌ Lacking phone customer support

In case you want to start trading cryptocurrencies but don’t have enough time or knowledge – you can try a recognized crypto trading bot TradeSanta. It is a modern and simple to use Binance-compatible crypto trading bot with active community and live support. Find out more in our in-depth TradeSanta review.

Binance milestones & events 2020 retrospective

Binance has achieved significant growth over the course of 2020, listing multiple new assets, capturing assets to new markets, and launching country-specific versions of the Binance platform in order to comply with increasing regulatory oversight of the crypto market.

Binance’s New Year Message, published at the beginning of 2020, focused on providing enhanced security features, dedicated launchpad funding and support for innovative blockchain ventures, and upgrades to Binance’s decentralized exchange platform and Binance chain.

Notably, Binance launched an Australia-specific platform in July 2020, announcing new fiat-to-crypto services that streamline access to crypto trading for Australian traders. Binance’s entrance into the Australian marketplace with a dedicated platform mirrors efforts made by the exchange to provide US-based traders with regulatory compliant functionality, with the ongoing 2020 launch of Binance US set to conclude in 2021.

The launch of geo-specific instances of Binance throughout 2020 reflects the overall goal of Binance to implement Binance Cloud, a cloud-based exchange platform system announced in September 2020. Heralded as a digital asset trading platform that functions as a white-label backend for smaller exchanges, Binance Cloud is designed to maximize scalability and security for new exchange operators.

Mid-Year Controversy Dominated by Launch of Binance Crypto Card

While Binance has captured significant crypto market trade volume over the last year, several major events have driven the exchange into finance industry news. Market participant furor over accusations of market manipulation in early May 2020 saw Binance Shanghai subjected to protest groups, with Binance releasing statements that informational delays were caused by user lag.

Despite controversy in Shanghai, Binance retained strong growth over the course of 2020, with a major peer-to-peer project launched in India allowing users to earn significant rewards by referring Rupee merchants to the exchange’s trading platform in order to drive greater fiat Rupee liquidity.

One of the largest milestones achieved by Binance throughout the course of 2020 was the launch of Binance’s new Binance Visa Card at the end of Q3. The new Visa, made available to users across the European Economic Area, allows users to spend digital assets from linked Binance accounts at over 60 million locations around the world.

Notably, the Binance Visa Card provides users with up to 7 percent cash back, significantly higher than entry level options provided by competitors such as the MCO Visa card.

The performance of Binance’s dedicated BNB coin remained solid throughout the course of 2020, driven by staking rewards provided to platform users in return for discounts on trading fees and various crypto-backed loan programs. A $25 million market dump in early Q4 saw market caps slashed across the crypto ecosystem, with the exception of BNB and select other altcoins capturing double-digit pumps from investor speculation.

Binance Remains Biggest Exchange Worldwide

Increased market activity in the EU, USA, and Australia saw Binance gain traction in all three markets compared to major competitors such as Coinbase and OKEx, but regulatory action against Binance from the Russian telecom sector resulted in a prohibited website ban on the exchange throughout Russia — an event predicted by Finbold analysts several months earlier.

The launch of Binance US has seen the exchange secure a strong hold on the US trading ecosystem, with strong efforts from Binance’s regulatory compliance team driving allowing the platform to establish a 6-month roadmap to Binance US availability throughout all US states.

2020 has seen Binance retain its position as the largest and most popular exchange in the world by volume, boasting an average 24-hour volume of over $5 billion throughout the year. The increasing availability of Binance’s crypto-backed loans and DeFi product suite has allowed the platform capitalize on the rapid surge of interest in decentralized finance, driving Binance towards further dominance as the world’s number one crypto trading platform into 2021.

Conclusion and Additional Resources

All in all, Binance is one of the most widely used crypto exchanges worldwide, operating with the least friction and being one of the most predictably reliable crypto-currency trading platforms by far.

It also never stops developing and expanding its provision of services, adding to the arsenal of technical possibilities and configurations of kinds of market exposure available, keeping up with the latest industry developments and trends.

Binance Academy is a web site of educational materials, tutorials and how-to guides provided by Binance itself.

The Binance official Medium for the latest news, updates, and announcements.

ℹ️ Not sure how to start cryptocurrency trading? Read our in-depth “Crypto Trading for Beginners” guide and make informed decisions. Good luck!

FAQ about Binance exchange

What is Binance?

Binance is a large ecosystem that comprises of many segments. Its Binance exchange is the biggest crypto exchange by volume and ranks among the most-recognized globally. Trust Wallet is the official wallet of Binance where users can send, receive, and store their digital assets in a secure and decentralized manner. Other segments of the ecosystem include Binance Chain, Binance Academy, Launchpad, Binance Labs, Binance Research, and Binance Charity.

Is Binance exchange a good fit for beginners?

Binance exchange is a good fit for complete beginners. The platform is user-friendly. The sign-up and registration process is straightforward enabling beginners to sign up and deposit funds quickly and easily. Moreover, it has up-to-date information and academic centers where users can refer to whenever they encounter challenges while using their platform. It also has many useful features and great 24/7 customer support.

Can US citizens trade on Binance?

Americans can trade on Binance since the crypto exchange launched its Binance.US arm. Launched on September 23, 2019, Binance.US enables American users to deposit Bitcoin, Ether, XRP, Bitcoin Cash, Binance Coin, Litecoin, USDT, USD into the exchange. Almost all of the features available on the global platform are available on the US version. However, they are customized to ideally serve the US market.

Is Binance exchange safe and secure?

Binance exchange claims high standards of safety and security. It is designed in a multi-tier and multi-clustered architecture that offers high processing throughput with the ability to process almost 1.4 million orders per second. Also, when users log in for the first time, a pop-up appears urging them to enable the 2FA (two-factor authentication) that helps in increasing account security.

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Oliver Scott
Author

Oliver is a revolutionist in the sense that he embraces change as it comes. He is passionate about blockchain, digital assets, the Internet of Things, Artificial Intelligence, and all evolving technologies. At Finbold.com Oliver covers data-driven stories and researches that reveal meaningful insights for the reader.

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