The Binance Exchange is a leading cryptocurrency exchange founded in 2017. It features a strong focus on altcoin trading.
Binance offers crypto-to-crypto trading in more than 350 cryptocurrencies and virtual tokens, including bitcoin (BTC), ether (ETH), litecoin (LTC), dogecoin (DOGE), and its own coin, BNB.
- KEY TAKEAWAYS
- Binance is an online exchange where users can trade cryptocurrencies. It supports hundreds of the most commonly traded cryptocurrencies.
- Binance provides a crypto wallet for traders to store their electronic funds.
- The exchange has supporting services for users to earn interest or transact using cryptocurrencies. It also offers programs for miners and helps traders make investment decisions.
- Binance has its own blockchain-based token, BNB.
- Binance has a global presence but is limited in some countries like the U.S. and U.K. due to regulations.
Table of Contents
History of Binance Exchange
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Binance was created in 2017 by Changpeng Zhao, a well-known entrepreneur, investor, and software engineer. He started the exchange in July, and within six months, the exchange grew to become one of the largest crypto exchanges in the world.
Primarily known for crypto-to-crypto trading—trading between two cryptocurrency pairs—the Binance exchange has some of the lowest cryptocurrency transaction fees. It has high liquidity and offers discounts to users who pay in BNB—the exchange’s native cryptocurrency token.
With high standards of safety and security and multi-tier and multi-clustered architecture, Binance delivers high processing throughput.
In 2019, the global Binance exchange was banned in the U.S. due to regulatory concerns. The exchange opened Binance.US, an exchange that meets U.S. regulation,
Trading on Binance Exchange
Like other crypto exchanges, Binance offers services for trading, listing, fundraising, de-listing, and withdrawing cryptocurrencies. Cryptocurrency enthusiasts willing to launch their tokens can use Binance to raise funds through initial coin offerings (ICO). Binance is used by millions of traders for exchanging and investing in various cryptocurrencies.
To start trading, users must complete the necessary know-your-customer (KYC) requirements. Upon successfully creating a trading account, they can add funds to their public wallet address (provided by Binance) to start trading.
The Binance exchange supports four main types of trade orders: limit, market, stop-limit, and one-cancels-the-other (OCO) orders. Limit orders are executed only at the limit price set by the trader. Market orders are executed immediately at the best available market price. Stop-limit orders become valid orders only when the price reaches a specified level. An OCO order is a pair of orders where the executed order cancels the other.
Binance offers seven types of orders for crypto derivatives, specifically futures contracts.
These trade orders include:
- Limit Order
- Market Order
- Stop-Limit Order
- Stop Market order
- Trailing Stop Order
- Post Only Order
- Limit TP/SL Order (Strategy Order)
There is no fee charged for cryptocurrency or fund deposits. However, withdrawals come with a transaction fee that varies depending on the cryptocurrency and transaction amount.
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Pros and Cons
Binance.US is highly regarded by both beginner and advanced crypto investors. But like any exchange, it has drawbacks.
| PROS | CONS |
| Fees are among the most competitive on the market, and bitcoin trades are free on select pairs | Not available in Alaska, American Samoa, Hawaii, Maine, New York, the Northern Mariana Islands, Texas, the U.S. Virgin Islands and Vermont New user onboarding is paused in Connecticut, Florida, Georgia, North Carolina, Ohio, Oregon and Minnesota |
| Wide ranges of cryptocurrencies and features are supported and offered | Regulatory issues are concerning |
| Well-reviewed app for mobile use on Android and Apple devices | The exchange operates in an opaque manner |
Other Binance Services
In addition to exchange-specific services, Binance also offers other tools, platforms, and services. Some of them are as follows:
Earning
Binance Earn is a platform for staking or earning interest by depositing stablecoins with the exchange. Depending on the coin and the tenure, the exchange offers investors multiple options and interest rates for these coins.
Lending
Binance Card is a Visa credit card that allows users to convert their cryptocurrency into fiat currency and spend it on products and services. While the conversion does not incur administrative fees, third-party fees, such as payment network fees, apply.
Binance Crypto Loans allow users to borrow for spot, future, and margin trading. Terms of seven, 14, 30, 90, and 180 days are available, with interest calculated based on the number of hours you’ve borrowed for.
Smart Pool
Binance Smart Pool enables miners to switch between different cryptocurrencies for mining to optimize and multiply their income, while Binance Pay lets you use cryptocurrency to pay for purchases worldwide with zero fees. You can use it on Binance’s Marketplace.
Development
Binance has a blockchain technology incubator called Binance Labs, which focuses on nurturing promising pre-ICO stage projects. It helps deserving cryptocurrency project teams by providing necessary funding for development, advisory resources, and a launchpad for any necessary listing and fundraising exercises.
Binance also offers a site called LaunchPad for hosting new and emerging blockchain projects and API interfaces. As of July 2023, over 70 projects have been launched.
User experience
The Binance.US desktop interface is attractive, fast and smooth to operate. The only criticism is that certain features may take some time to find at first. But this reflects the fact that there are so many niches and offerings within the product suite.
The app is equally smooth if you prefer a mobile experience. It’s highly rated in the Apple and Google app stores, with 4.8 and 4.7 out of 5 stars, respectively.
Binance Coin (BNB)
Binance Coin (BNB) is used to facilitate crypto trading on the Binance exchange. The coin was launched during an initial coin offering in July 2017. Binance offered 20 million BNB tokens to angel investors, 80 million tokens to the founding team, and the remaining 100 million tokens to the various participants through the ICO process.
Almost half the funds raised during the ICO process were intended for Binance branding and marketing, while about one-third were used to build the Binance platform and perform necessary upgrades to the Binance ecosystem.
Binance Coin initially ran on the Ethereum blockchain with the ERC 20 standard.
However, in 2019, Binance Coin became the native coin of the BNB Chain.
As of July 2023, BNB is worth around $250. It is the fourth most valuable blockchain-based token by market cap, at roughly $39 billion.
Can I Trust Binance?
Binance is used by millions that trust the exchange as a medium for cryptocurrency transactions. However, as with all third parties involved in blockchain and crypto, it is vulnerable to hacking, as seen when hackers stole $570 million BNB in 2022.
Binance is considered one of the most secure cryptocurrency exchanges, but there are still some things to consider:
Security Features:
- Binance employs a variety of security measures to protect user accounts, including cold storage for the majority of user funds, 2-factor authentication (2FA), and address whitelisting for withdrawals.
- They also have a $1 billion Secure Asset Fund for Users (SAFU) to reimburse users in case of a security breach.
Potential Risks:
- No exchange is completely foolproof. Hacks and security breaches can still happen.
- Binance has faced regulatory issues in some countries, and its availability can vary depending on your location.
- Keeping large amounts of cryptocurrency on any exchange for a long time is generally not recommended. It’s safer to transfer it to a private hardware wallet for long-term storage.
Here are some resources to help you decide:
- Binance’s security information
- Coin Bureau analysis of Binance security:
- Security.org’s take on Binance safety
Ultimately, the decision of whether or not to trust Binance is up to you. By carefully considering the security features and potential risks, you can make an informed choice.
Can U.S. Citizens Use Binance?
U.S. citizens can use Binance.US and be protected by U.S. laws. Accessing Binance (global) from the U.S.—or other restricted countries—using alternate connection methods like a virtual private network is against Binance’s Terms of Use.
U.S. citizens can use cryptocurrency exchange services, but with some limitations:
- Binance.US: There’s a separate platform, Binance.US, compliant with U.S. regulations. This is the recommended option for U.S. residents.
- Main Binance: Accessing the main Binance exchange (global) from the U.S. is against their terms of service. Using methods like VPNs to bypass restrictions is not recommended.
Here’s a breakdown:
- Binance.US:
- Limited selection of cryptocurrencies compared to the global Binance.
- Doesn’t allow USD trading directly, but you can deposit crypto bought elsewhere.
- Main Binance:
- Wider variety of cryptocurrencies and features.
- Not officially available to U.S. users.
Important Note: Some U.S. states have additional restrictions on Binance.US or cryptocurrency exchanges in general. It’s always best to check your state’s regulations before using any crypto exchange.
Commissions and fees
The exchange offers free bitcoin trading on select pairs. Other pairs are charged a maker/taker fee for trades. For instance, there’s a maker fee of 0.40% and a taker fee of 0.60% for Tier I pairs, assuming you trade $10,000 or less over a 30-day period.
Fees drop in a stepwise fashion as your trading volume increases. And if you use BNB to pay for fees, you’ll get 5% off.
If you want to stake coins for yield, note that Binance.US deducts a service fee of 25% to 35% from earned staking rewards. This fee is built into the estimated rewards rate for each staking asset.
There are no fees to deposit crypto. But withdrawal fees may apply. Remember that USD withdrawals have been suspended, meaning ACH transfers aren’t allowed. Fee calculations vary based on the asset, payment method, network conditions, etc.
Is Binance Better Than Coinbase?
One is not necessarily better than the other. However, Coinbase is slightly more beginner-friendly, while Binance is a little less easy to use—in the end, it comes down to preference.
The Bottom Line
Binance is a cryptocurrency exchange that lists more than 350 cryptocurrencies globally. In addition to cryptocurrency trading, it offers several services that enhance the experience for users and blockchain developers.
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