How Binance reach on Top Position even after they started their service from 2017 beating bitfinex.com and hitbtc.com who were launched in 2012 and 2013
Do you know that in just one year Binance holds the rank of World’s biggest cryptocurrency exchange by volume?
Do you know that just one-year-old Binance beat bitfinex.com and hitbtc.com which were launched in 2012 and 2013?
Read this article to know how Binance made its way to the top position.
In the middle of the July’2017, Binance started its operation in China (later moved its HQ to Hong Kong) by raising USD 15 million through initial coin offering (ICO). The ambition of Changpeng Zhao, the founder of Binance is to provide trading services to every individual on the planet. As a newcomer, it was not easy for Binance to catch-up the established exchanges, but it gained huge popularity for its crypto to crypto exchange services. The reasons behind the success of Binance is the superior technology giving 1.4 million transactions per second, an impressive number of Initial Coin Offering listings, low trading fees, professional attitude, friendly CEO and multi-language support to meet the goal. Here we go with the brief discussion.
Inflated Trade Volumes
As reported, there are the cases of inflating trade volume data by some of the cryptocurrency exchanges to boost standings. But Binance is very honest with their volumes. Usually, crypto exchanges report volume twice at the time of purchasing, e.g., when you buy one Bitcoin; other exchanges count it twice as there are two sides –one buy and one sell. But Binance always counted this as 1. So it reports 50% of the volume. There are also other things like wash trading which manipulate the market and give the wrong impression showing the fake volume in the name of market making.
Role of ICO
ICO helped Binance a lot, and Binance considers it as a magnificent tool. It was able to raise money much more easily and quickly using ICO, rather than trying out the traditional venture capital rounds which is extremely slow. ICO helped Binance to gain immense popularity and get an initial user base that is mention worthy. In the ICO phase, Binance had about 25,000 registered users. The people like investors, coin-holders, and users at the same time participated in the ICO of Binance along with the token economies. Binance helped people’s lives by giving them financial freedom either through their ICO or investing some of the coins that they listed. It even promotes more adoption for ICOs.
Less Trading Fee
Binance introduced BNB and its benefits to its newcomers, and the main attraction was to reduce the trading fee to almost half. The USP of BNB is that it is easy to understand and its real-world use feature is easy to determine the source where its value is generating. As a result, the fee on Binance is 0.1% compared to 0.2% on Bitfinex and drops to just 0.05%, less than Hitbtc if you pay it with BNB coins. You may find it insignificant, but it’s a massive deal for a person who is regularly trading.
The high-capacity core matching engine in Binance is indeed faster than any other competitors, and that significantly contributed to its high volume. The engine can handle 1.4 million transactions per second. People got interested because it can sustain high volume. It involves very less time starting from placing an order to its execution. Because of this, at present, Binance is the world’s highest liquidity provider.
Relaxation in withdrawal limits for unverified users
People started using Binance because unverified users enjoy higher withdrawal limits compared to other exchanges. Where the daily limit is just 0.1 BTC or USD 2000 for unverified users in some exchanges, Binance set the limit at 2 BTC per day. On other exchanges, the verification process is also very strict, and without sharing your identity, you can’t even trade. This appealing trading environment attracted foreign users to Binance and helped the exchange to expand globally.
Efficient Customer Support
Binance grew fast from zero to a few million users. Other than the highly efficient matching engine, it has many different departments and especially customer support to help them grow. So there were few million questions, and people needed help. It didn’t have AI support but all human-based system. It hired people real quickly with a lot of initial strain, but now they are counted among the best support provider in the industry. Still, Binance thinks that the support is not good enough and there is a lot of room to improve and grow.
Take on Criticism
Binance takes criticism very sportingly and seriously. It takes negative comments as constructive feedback to reflect them in their way of doing and making improvements. At the same time, competitors who deliberately had spread negative news about Binance helped it to grow. Its primary focus is on creating value by helping people to achieve value.
Binance also takes care of its Non-English speakers, and they are happy that Binance offers multiple-language support in English, Chinese, Korean and Japanese.
Comparison with Bitfinex and Hitbtc
Binance Vs. Bitfinex
Bitfinex was founded in 2012 by Raphael Nicolle and operate in Hong Kong & Taiwan. The exchange volume of Binance is 2 billion, and that of Bitfinex is 492 Million. The trading fee in Binance( 0.1%) is just half than Bitfinex (0.2%), and the security is excellent. There is the loss in the reputation of Bitfinex due to hacking, and its trading volume is also declining. The number of tradeable coins is more in Binance than Bitfinex and Binance also support more languages than Bitfinex. Binance supports more than 100 cryptocurrencies whereas the other supports over 35 cryptocurrencies. Moreover, community trust is excellent in Binance and average in the other case.
Binance Vs. Hitbtc
Hitbtc was founded in 2013 in Hongkong. The exchange volume of Binance is 2 billion, and Bitfinex is 492 Million. Trading fees are high in Hitbtc( 0.1%) and the verification process is also very strict compared to Binance (0.05% – 0.1%). The trading volume is high in Hitbtc, but it has many user complaints. The number of tradeable coins is also less in Hitbtc compared to Binance.
Binance is recently working on launching a decentralized exchange (DEX) on a high priority basis which will overtake its centralized counterpart in future. It is also moving operations to Malta, the crypto-friendly island in Europe and continues to grow in the industry.