Cryptocurrency 101: Important Things to Know About Binance Coin

Investors, this is what you need to know about this cryptocurrency. 

In the cryptocurrency market, Binance Coin is the fourth biggest cryptocurrency by market cap. Its rise in popularity is because of its utility on Binance exchange, one of the world's largest crypto exchanges, and the development of the Binance smart chain. To evaluate your investment idea, here are a few things you need to know about Binance exchange.

1. The Utility Factors 

With Binance coin, a user can reduce trading fees on Binance exchange and earn interest. It also powers the Binance Smart Chain, the blockchain platform that enables smart contracts. While Ethereum is leading the race of smart contracts, its network has become congested and the transaction fees have become high. Hence, developers are moving to other platforms, giving Binance the preference. 

2. Regulatory Challenges 

Binance is one of the biggest crypto exchanges in the world and it supports a wide range of currencies. However, Binance services were recently banned in the UK, the Japanese authority has warned about its unauthorized usage, and Binance is no longer operating in Ontario, Canada. Officials everywhere are getting tougher on cryptocurrencies, concerned about money laundering and other illegal activities. 

3. Lack of Headquarters 

Binance has offices around the world with more than 2,000 employees, but it has no headquarters. While the company believes that cryptocurrency should be borderless, countries like the USA and UK require a company to be registered for regulatory purposes. 

4. CoinMarketCap ownership 

In 2020, Binance bought the popular cryptocurrency information website, CoinMarketCap. The two companies operate independently but acquiring such an influential site could improve Binance coin's exposure to big-time investors. The company also owns TrustWallet, a decentralized crypto wallet. 

5. Massive Growth Potential 

In the past 2 years, the Binance coin has increased 900%. If you would have spent US$10,000 to buy Binance coins in 2019, your investment would be worth US$100,000 today. This is a growth that attracts many investors. It boasts a clear use case, which is rare for many cryptocurrencies in the market.