What's Binance? A Beginner's Guide
by Nancy Lubale
What's Binance? The simple answer is that it is a cryptocurrency exchange.
A crypto exchange is a fundamental part of the crypto ecosystem as it enables the movement of cryptocurrencies, creating the crypto economy. An exchange in the crypto space functions like a stock exchange in traditional finance. It assists crypto investors, traders, and users to sell, buy, and trade their digital assets.
This article focuses on Binance, its key features, and how to get started.
For those investors wondering "what's Binance", it is a centralized exchange established in 2017 by Changpeng Zhao, who currently serves as its CEO, and Yi He in China. Currently, the exchange is set up in the Cayman Islands following China’s cryptocurrency ban.
Binance is the leading crypto exchange by trading volume as well as revenue. The exchange facilitates transactions worth over $1 trillion annually.
## What's Binance good for?
- Trading Assets: Users can buy crypto assets using fiat currency, sell them for fiat currency and trade their digital assets for other digital assets on the Binance exchange.
- Crypto wallet: Binance also provides users with a crypto wallet. Like a physical wallet, users can store their digital coins in the wallet safely and use them when they want to trade.
- Crypto staking: The exchange also offers crypto-staking services to its users. This enables users to deposit and lock their assets for a given period during which they gain interest. For some blockchains, staking assists in building the chain, and users who stake are rewarded in crypto.
- Binance Launchpad: This is a service created for crypto developers to launch their new cryptocurrencies through an Initial Coin Offering (ICO).
- Low Transaction Fee: Similar to other financial institutions, Binance also charges a fee for transactions to generate revenue. However, in the crypto industry, Binance prides itself on having the lowest transaction fees.
- To get even lower transaction fees, users can pay in Binance Coin (BNB), a token native to the Binance ecosystem, which accords them up to a 25% discount on trading fees.
- High Liquidity: Binance also has the highest liquidity among all crypto exchanges. This allows a user to sell all their digital assets and withdraw all their funds.
How to get started
Once we've answered the question "What's Binance", we need to look at getting started. It is a simple process:
Step 1: Registration
To get into Binance, a user is required to register on the website, with their email and a strong password. Users can also reinforce the security of their accounts by setting up a 2-factor authentication (2FA) service.
Step 2: Account Verification
To access full privileges on the exchange, users are required to verify their accounts by providing Know-your-customer (KYC) documents to ascertain their identity. These documents include a government-issued ID, a driver's license, or a passport. Verification helps to secure your account further and ensures compliance with regulations.
### Step 3: Purchase Crypto
Once the account is set up, users can purchase crypto using their fiat currencies. To do this, users can deposit their fiat currency into their exchange wallet, which is automatically created once an account is created. They can then use these funds to buy a cryptocurrency of their choice.
Step 4: Trading
After creating an account and depositing funds, users are now prepared to initiate trades. Binance offers three primary types of trade orders: market order, limit order, and stop-limit order.
A market order is executed instantly, as it involves trading an asset at the prevailing market price.
A limit trade is where an asset is bought or sold at a price the trader sets. This trade takes time because the trader's price must be met.
A stop limit order is a trade that occurs once the price set by the trader for an asset is reached by the market. While the trade is more risk-averse, it is not guaranteed to happen because the asset may never reach the set price.
Nancy is a self-taught crypto, blockchain and tech news author and researcher with more than six years of experience producing news coverage in the cryptocurrency, NFT, the Metaverse, blockchain technology, investing and technology fields. Driven by her passion for technology, she has worked for top crypto companies, including Business2Community, Kraken Learn, InsideBitcoins, Blocknews.com, Vauld Insights, Coingape, Forexcrunch, and Economywatch. Her research interests are in technical analysis of crypto assets, DeFi, NFTs, and on-chain data analysis and of late tech and AI news.