What is the Binance Coin?
According to Binance Coin developers, there are two fundamental types of trading platforms: Platforms which trade in fiat funds and platforms which trade in cryptocurrencies. Binance has established itself as a trading platform for the cryptocurrency market.
So, naturally, it wishes to benefit from the continued growth of this sector. In addition, it has been hypothesized that cryptocurrency trading platforms will experience stronger growth in the future than ‘traditional’ fiat currency trading platforms.
Thus, it is anticipated that cryptocurrency trading entities will dominate the market in the long term. This development of the digital economy is referred to as binary finance – hence the company name, Binance.
In addition to the Binance platform, there is also the Binance coin, which is limited to 200 million tokens. This is an ERC20 token based on the Ethereum token standard. The coin is intended to be used for the payment of trading fees, transaction fees and listing fees. Payment of fees by means of the Binance coin also entitles the user to a discount.
The scale of discounts starts in the first year at a rate of 50% on all fees. In the second year, this drops to 25%, and then to 12.5% in the third year. During the fourth year, the discount is reduced to 6.25%, and there is no discount thereafter.
In addition, there is a buy back program which destroys repurchased tokens, so the value of the remaining tokens increases.
What Problems Does Binance Coin Want to Overcome?
At the present time, many cryptocurrency trading platforms have shortcomings which Binance wants to resolve. Poor technical architecture is one particular issue.
Many file-sharing platforms were simply built too quickly, just to facilitate the trade between the tokens. Often, the most rudimentary approach was chosen just to get the operation up and running.
Doubtless, this seemed a practical solution at the beginning. However, a system must adapt as the number of users increases, otherwise, security, efficiency, speed and scalability will deteriorate.
The team’s expertise will enable Binance to overcome these issues and deliver a better performance than many other cryptocurrency trading platforms. Security also plays an important role, because the risk of hacking is great in cryptocurrency environments.
The most modern encryption methods and security algorithms are employed to combat this risk. Also, to ensure a high level of trading liquidity, the Binance community has a broad user profile.
As a result, supply and demand are particularly high and all tokens can be readily liquidated. Customer service is also a strong focus and all future development will preserve the agreed levels of service. Customer support is available in various languages. Furthermore, customer enquiries always contribute to the positive development of the platform.
What Team is Behind the Development of the Binance Coin?
Binance is developed by a team with a wealth of experience in finance and cryptography. In addition, this team has been involved in several successful start-ups. The role of the CEO is currently handled by Changpeng Zhao, who is also known in the business by the acronym CZ.
Prior to his role at Binance, CZ founded the startup BijieTech, which was responsible for developing cloud-based trading platforms. Meanwhile, the company is represented on more than 30 trading platforms and generates a profit of $5.5 million per year.
The role of the CTO is filled by Roger Wang, a founding member. He has over 10 years’ experience in financial IT and is responsible for the development of system architecture.
James Hofbauer is the Chief Developer of the team and was also involved in founding the platform. He is responsible for the development of matching software. Paul Jankunas is VP of Engineering.
He is responsible for the implementation of the C++ machine engine and develops commercial applications for mobile access. As Product Director, Allan Yan is responsible for product design and is also in charge of trading-platform innovation.
The last member is Sunny Li, who takes care of business operations. The team behind Binance Coin.
An Analysis of the Potential Risks in the Binance Context
According to the developers, there are a number of risks which must be taken into account when operating a trading platform. The team has analyzed the environment and wants to eliminate these risks through the application of leadership, skill and experience.
The security of the trading platform domain is the most important consideration. Many enterprises have failed in the past because of their low safety standards.
The reality is that many attacks on user accounts could have been prevented by adopting a higher level of security. To avoid this pitfall, Binance has defined security as the highest priority.
In practice, this means Binance follows and enforces the strictest finance industry standards. Competition has also been identified as a significant risk.
It must be assumed that many startups can design modern and attractive cryptocurrency trading platforms, and potentially revolutionize the market. However, this is a classic risk all established companies face.
To succeed they must remain resilient, trust in their abilities and persist with their strategies. To secure Binance’s market position and participate in future growth, the founders recommend potential investors acquire the Binance coin.
What is the Current Market Capitalization of the Binance Coin?
The Binance coin trades under the symbol BNB and has been trading officially on the markets since July 25. The initial coin offering included placing 50% of the available tokens on the market.
An introductory price of $0.106476 resulted in an initial market capitalization of $10.65 million. The current market capitalization amounts to $867.7 million, based on a token price of $8.76. This currently generates a daily trading volume that amounts to USD 83.3 million in total.
Alexander Weipprecht is the managing partner of Provimedia GmbH. As a trained IT specialist for application development, he has been advising leading companies on the following topics for more than 10 years: online marketing, SEO and software. Cryptocurrency is becoming increasingly important to businesses and investors. Through Coin Report and Krypto Magazin Germany, Alexander wants to give all people easy access to the subject matter.