Binance Finance
As many of you will be aware Binance Exchange is one of the main players in the crypto exchange world. Launched in 2017 it has risen rapidly to become the popular place for crypto traders to swap their digital coins and in the process it has become a central pillar of the crypto world, even lending the burgeoning sector some regular business credibility. It's very active and there are a lot of transactions happening even on relatively small currencies. For example $426,246.22 worth of our very own steem has been traded on Binance in the last 24 hours at the time of writing. Steem is ranked #190. For comparison and sheer numbers, Ripple XRP at #004 has almost $120m trade volume in the last 24hrs.
Binance has become synonymous with bitcoin and cryptocurrencies in general. There are many other exchanges offering different interfaces, trading pairs, chatboxes, fee structures and all with different levels of security and KYC but Binance has managed to get ahead of the pack with prodigious publicity and SM mentions, not hindered particularly but perhaps even helped by free mainstream publicity given via a string of high profile, high volume hacks, which it has so far managed to brush off.
img courtesy of coinmarketcap
Just weeks ago a measly $40m dollars worth of bitcoin was stolen and people are still queueing up to lodge their hard earned cryptocurrencies on it's fervent exchange. It's never quiet on Binance and this is part of the attraction. Humans like the fruit machine flashing lights when gambling and Binance can give the impression of a very excited global crowd, practically 24 hours per day, unlike traditional markets which go home to bed. Success has a tendency to breed success and it's no wonder that Binance is top of the charts. It has a major influence on the overall market.. Check this little blip caused by May's minor hack on the overall crypto markets !
Currently Binance has 502 markets
$3.7bn 24hr trading volume and an astonishing $58bn THIS month.. that's up 92%. A competitive and tiny 0.1% trade ensures that Binance is making some serious money and it has one attracting factor above all others; it's own binancecoin a genius idea and one that guarantees to keep it top of the stack, while the coin appreciates handsomely.. and I'll tell you why in a minute.
Minting your own crypto
Most (but not all) blockchain projects are based on a disruptive business function and utilises their own cryptocurrency as liquidity for the system. Binance didn't really need that. It was actually a regular meat and potatoes business which was piggybacking on the crypto markets. Like all exchanges, except the truly de-centralised peer to peer ones, which can charge 'zero fees' Binance just takes a tiny cut of all the action, like a poker house, the mob or taxes, except taxes are bigger and actually pay for things like roads, schools, ambulances (in the UK) but you get the gist. Binance launched it's own coin as a clever way to get a slice of the crypto pie. It was envisioned as it's own liquidity. You could use the token to lower your fees (50% for the first year and halving until year 5) and it can be used to pay for listings . It has a competitive burn ratio to ensure buoyancy. total supply of 200m coins with an eventual burn of 50%. Good for traders, good for Binance, good for it's business. This creates an instant hatching seamonkey market as people trade in a little of whatever coins they have, just to lower the fees. This puts Binance on the market.
Growth Factor
As you can see from the chart above, Binancecoin has had a pretty good run. Starting the year at just over $6 /£5 it has risen to a current stately $37 / £29 feeling every bit like a 2017 runaway moonshot, but what are it's long term chances ? For as long as it's cheaper to pay trading fees in BNB, it will have a value and as trading values (inexorably) rise it should continue to grow. It also has a hidden / not so secret weapon. One which may ensure that it makes and stays top ten or perhaps top five... maybe not quite 3, or 4 behind Libra (it could) within the next couple of years.
Crypto Dust
Every traders nightmare is dust and it's familiar to anyone who has ever exchanged cryptocurrencies. The tiny leftover currency amounts from trades can be difficult to do anything with because there's usually a minimum trade amount, to make it worth the fee charged by the exchange. They know that if they didn't impose a limit, their systems would be inundated cleaning up millions of dust transactions. (well that's my guess anyway). Auto-bot trading generates a lot of dust to sweep up and while wallets can be scrubbed on cloud based trading bots like cryptohopper, if you stop a session without cleaning up, you would be left to manually clean all the wallets on whichever exchange you let your robot work.. and it is a laborious process.
You have to buy the minimum tradeable amount of each currency, so you need to work that out first and then max sell it . If trading is quiet on a particular coin, there's no guarantee this will clean up wallets entirely. There could be many different bits of dust on an exchange account. So Binance came up with a very cunning plan. Once in every 24 hours you can convert all your dust (except delisted coins) into binance coin, with a flick of a built in switch. Binance have no problem with accumulation of all the dust. They also charge a small fee to exchange but more importantly it creates a constant and growing demand for BNB. If a token is just liquidity in a system, this is a great use case for it's existence. It provides a lower cost option for fee payment and can also be used as a universal solvent, digital water or D-h2O
Joining the Peloton
Binancecoin is currently ranked 15 on the crypto leader board so it's up there with the best. It becomes a stable coin and therefore becomes a coin to hodl. Success does tend to be self fulfilling and in this case, BNB has the secret weapon to power it. A use case of low value, mass volume convenience trades for the purpose of cleaning up an account. Traders are by their very nature, generally quite tidy creatures and having countless coins of almost zero amount and (useless) is a distracting, pointless inconvenience. It's this writers guess that BNB will continue in it's quest to become top drawer currency. But where will Libra get to and how will it affect crypto's fortunes ? That's the question on everyone's mind right now and it doesn't seem to have dampened BTC-FOMO this week..
this article is not a promotional item for binance or BNB and the writer intends it for entertainment purposes only. It is not investment advice and I always encourage all potential investors to conduct their own research, conduct their own due diligence and not solely rely on the advice of others. Remember investments can go up as well as down.