Binance is not only the world’s largest cryptocurrency exchange, but it’s also a blockchain that competes with Ethereum, Solana, and Cardano for dominance of smart contracts.
What is Binance?
Binance is a cryptocurrency trading exchange founded by Changpeng Zhao, known in the crypto community as “CZ”. A cryptocurrency exchange is similar to that of the JSE or the NYSE but for crypto related products.
Over the past 4 years, Binance has grown into a superstar. Binance offers a wide variety of cryptocurrencies and trading features to its clients, much like the Amazon of crypto exchanges. Binance primarily focuses on traders – those looking to buy and withdraw cryptocurrency over a shorter period of time than longer-term investors.
The platform has features that attract trading including high risk leverage and complex investment products like futures and options.
For this reason, Binance has become a ‘must-see’ exchange for many crypto enthusiasts and traders, with a 2020 crypto trading volume of around $ 2,000 billion.
Believe it or not, this trading volume continues to grow. In 2021, the total trading volume rebounded to between $ 60 billion and $ 90 billion per day. This means Binance could be on track to reach over $ 20 trillion in trading volume this year.
From the chart above, you can see the extent of Binance’s dominance in trading volume relative to its competitors. To put this in perspective, the second largest exchange is only about one-fifth of Binance’s volume.
But is Binance just an exchange?
No, it’s a lot more. Besides being an exchange for trading cryptos, Binance also has its own blockchain – the Binance Smart Chain (BSC).
The BSC offers similar functionality to Ethereum, Solana and Cardano, with this it seeks to develop an ecosystem of Decentralized Finance (DeFi) products and services by facilitating these financial transactions using smart contracts.
DeFi is a subsector of the cryptocurrency industry challenging traditional financial institutions, including banks, insurance companies, and stock brokers, where entrepreneurs build trading and trading systems. semi-automated lending on blockchain networks.
Like Solana, BSC offers faster transaction times, lower fees, and programming capability that makes it easy for developers to create complex smart contracts.
But what did they give up to get that speed?
While the BSC can offer much faster transactions and lower costs, it compromises to get it.
The reason Ethereum is “slower” is that it is much more decentralized – in an order of magnitude 20 times more decentralized – and that a decentralized network runs on thousands of nodes (or computers) across the world, and so it takes time for this network to come to a consensus ”and add the next block of verified transactions to its blockchain.
Don’t worry about the word “consensus”. It’s just a fancy way of saying the network “agrees”.
The reason the Binance network can operate at a much faster transaction speed is because it only uses 21 validators. Therefore, just like Solana, it would appear that the BSC is forgoing some decentralization to speed up transactions.
What is the purpose of Binance coin (BNB)?
Binance coin (BNB) is the native cryptocurrency of the Binance network. Binance coin was originally created as an ERC-20 token on the Ethereum network, but has since moved away from it and developed its own blockchain network, The Binance Smart Chain (BSC).
BNB has multiple uses, and this is where the potential of this network becomes exciting. BNB is …
- A utility token for the Binance exchange,
- ‘Gas’ for the BSC,
- It is used to pay for travel expenses (such as hotel and flight reservations).
A utility token is a token that cannot be viewed as money but rather gives users access to products and services on that specific platform.
For example, Binance allows users to participate in several features such as trading, interest, lending, borrowing, and more. For all of these features, Binance will charge a fee.
When trading – users would pay lower fees if they paid in BNB (i.e. they would receive utility to own the token – hence the name “utility token”. In addition, the more BNB you hold, the more you can benefit from a discount on these trading fees.
“Gas” refers to the costs it costs a network to run a successful operation. Likewise, a car needs gas to get from point A to point B, a blockchain network requires a certain amount of gas to get a point-to-point transaction or operation.
As part of using the BSC – just like using Ethereum to pay fees when interacting with Ethereum protocols, users will need to use BNB to interact with the BSC and all applications built on it.
Why should I invest in Binance Coin?
Binance charges a fee for every transaction made on its network. With a daily transaction volume of $ 60 billion to $ 90 billion per day, this creates substantial revenue for the company. This income is directly generated by the highly leveraged traders who hold large amounts of BNB to reduce their trading costs. The more trading volumes increase on Binance, the more BNB is demanded by traders.
Remember that when you buy BNB – the cryptocurrency – you are not directly buying shares of Binance – the exchange. You only buy the cryptocurrency that gets some of its value from Binance’s success.
2. Low fees and scalability
Binance’s smart chain solves the high fee issues that many blockchains (like Ethereum) face today. Binance’s fees are almost negligible at $ 0.01 per trade. Binance also handles around 100 transactions per second, while Bitcoin and Ethereum process 5 and 15 transactions per second, respectively.
3. Growth of smart contracts
Based on total locked-in value (TVL) in smart contract platforms, Binance Smart Chain is the second largest behind Ethereum, with 13% of all locked-in smart contract value.
Total Locked-In Value (TVL) is calculated as the value of assets currently held on smart contract platforms. So TVL shows exactly which smart contract platforms attract the most money and therefore the most adoption.
4. Centralized foreign exchange exposure
Binance is the world’s largest centralized cryptocurrency exchange, with a daily trading volume 5 times that of its closest competitor.
Where to buy Binance Coin?
Cape Town based crypto investment platform Revix (www.revix.com), which is backed by listed company JSE Sabvest, will be one of the first platforms in South Africa to offer Binance coin as a standalone cryptocurrency investment option.
Revix will be offering BNB Binance Coin starting September 24 with a tempting promotion at no cost.
- Revix offer no purchase costs on Binance Coin purchases when using ZAR for one week (September 24-30, 2021).
- Revix will also offer a refer a friend promotion: if you refer one or more friends using your referral code, you receive double the Revix rewards to the value of R600 per referral while the person you invite receives R200 directly to their Revix account. (This promotion is valid from September 17 to 30, 2021).
Revix Also offers several standalone cryptocurrencies, such as Bitcoin, Ethereum, Solana, Uniswap, Polkadot and many more.
Through Revix, you can also access their ready-made “Crypto packages”. Their bundles allow you to effortlessly own an even-weighted basket of the world’s largest and, by default, the best performing cryptocurrencies, without having to create and manage a cryptocurrency wallet yourself. They are like the JSE Top 40 or the S&P 500 but for crypto.
Revix brings simplicity, confidence and excellent customer service when investing in cryptocurrencies. Its easy to use online platform allows anyone to securely own the world’s best cryptocurrencies with just a few clicks.
Revix guides new customers through the sign-up process until their first deposit and their first investment. Once configured, most customers manage their own portfolio but can access support from the Revix team at any time.
Remember that cryptocurrencies are high risk investments. You should not invest more than what you can afford to lose, and before investing, please consider your level of experience, your investment goals and seek independent financial advice if necessary.
This article is intended for informational purposes only. Opinions expressed are opinions and not facts and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell a cryptocurrency.
To learn more, visit www.revix.com