Đọc E-magazine phiên bản: Tiếng Việt
By the end of 2018, early 2019, when the market leader Bitcoin disastrously slumped and ICO investment has been consigned to oblivion, all cryptocurrency community shivered with bated breath, wondering what would come next. During such a time, Bakkt, ETF or STO were used as a placebo, providing a false hope that things would soon be right again on its track. However, Feb 3, 2019 witnessed an unexpected change as not a single person, at least for the time being, took any great care to those mentioned above. They began muttering a term consisting of 3 syllables:
(Un)surprisingly, it was Binance who has breathed new life into this.
Cryptocurrency exchanges have always been the backbone of this entire ecosystem as they have always been the starting point for most users and investors in the first steps to digital assets. However, they are often regarded as super-lucrative service providers, churning sizable profits like plain sailing, rather than enterprises having to compete rigorously for survival.
Ever since Bitcoin and other cryptocurrencies gained widespread attention, we have become too familiar with crypto exchanges like Coinbase in the USA, OKEx and Bitfinex in Hong Kong, Huobi in Singapore and the list just goes on. These exchanges, without much saying, have played a significant role in the development and expansion of the cryptocurrency industry as a whole.
Among these, however, there is only Binance – the most famous, most powerful name that wields immense influence on the rules of the market. Such gigantic power of the exchange which possessed only 2 years in operation makes us ponder over the question of what magical force would Binance have, against all the odds, to stand firm in such a volatile cryptocurrency market? How can a move of a rookie make all the old hands in awe?
After raising 15 million US dollars from ICO in July 2017, Binance has quickly become China’s largest crypto trading platform. The re-launch of this trading platform coincided with the dramatic increase of the cryptocurrency market at such an unexpected growth rate, bringing about 200 million USD profit for Binance only in Q2.
In addition, Binance’s services were so far beyond expectations, being able to quench the “thirst” for technology and innovation of Chinese investors in an investment-oriented and economies-of-scale culture. What’s more, the government’s stringent control policies for the capital flow has in turn, turned upper middle class citizens, who have considerable spending powers, into “thirsty gamblers.” This also explains as to why it is understandable that China, Korea, and Japan imposed strict laws to restrict people from casinos and betting activities.
While citizens of these countries were quite quick on the uptake to take on the fever of cryptocurrency, the authorities were much more hesitant and cautious. However, such “negligence” of cryptocurrency of the lawmakers can be completely intelligible, out of the unexpectation of the unorganized outflow of money, just through some codings that not so many people could understand.
By September 2017, Chinese government’s dissatisfaction with cryptocurrency has manifested clearly into specific actions, with the country banning ICOs and all crypto exchanges.
Up to that time, BTCC, OKCoin and Huobi were the top 3 largest crypto exchanges in China.
In such a context, China crypto exchanges, both small and large, were pushed to the brink of closure. While “giants of the industry” like BTCC or OKCoin announced defeat, other smaller exchanges “fled for their lives.” “Hardship creates heroes,” and through such thick and thin, noticing immanent signs, Binance, led by CEO Changpeng Zhao, has made a smart yet at the same time, quite risky decision: blocking all IPs coming from China, with the aim of restricting investors from withdrawing capital and moving their headquarters abroad.
As CZ explained in an interview with CCN a month later, “We have a feeling that the upcoming events will bode ill, and act quickly. It turned out to be the “savior” move that saved all of us. Once again, I learned a hard lesson: Be prepared rather than be apologetic.”
Now Binance is no longer a cryptocurrency trading platform, but a global-scaled financial ecosystem, which can completely impose game rules on the market if desired – an empire reborn thanks to a brave move in the darkest moment, led by a genius mind behind.
Changpeng Zhao (CZ) is the “mastermind” behind Binance; Binance and him are one. Born in Jiangsu, China, but shortly afterwards, he moved with his family to Canada. His parents were featured in a cover on Forbes magazine as intellectual bourgeois, and the move to Canada largely due to concerns about the chaos and riots within the Chinese society in 1989 after the Tiananmen Square event.
CZ was not an amateur, either. He studied computer science at McGill University in Montreal. After graduating, he moved to Tokyo, where he developed a trading system for the Tokyo Stock Exchange and wrote trading software for the Futures Exchange at Bloomberg. At the age of 27, CZ quickly went through the ranks and managed development teams based in Tokyo, New Jersey and London. In 2005, he left his position at Bloomberg and returned to China to start his own company, Fusion Systems. Operated in Shanghai, Fusion Systems quickly established a household reputation for building some of the fastest high-frequency trading systems for brokers.
It was during his stay in Shanghai that CZ first discovered cryptocurrency. Ron Cao, CEO of venture capitalists at Lightspeed Ventures, introduced CZ to Bitcoin during a poker session. CZ also knew Bobby Lee, co-founder of BTCC – China’s first Bitcoin exchange. In 2014, it developed to become the world’s second largest cryptocurrency trading platform by volumes of transactions. CZ quickly embarked on this technology, he told CNN:
“ Everything is clearer now: cryptocurrency is the future.”
In 2013, CZ ended 8 years of operation with Fusion Systems and officially switched to cryptocurrency. In 2014, he sold his home in Shanghai for $ 1.1 million and used the sum to buy Bitcoin.
With $ 1.1 million worth of investment in cryptocurrency in 2014, only 3 years later, CZ could live a high-end life without worrying about anything else, but in his head he was incubating something much bigger.
A question that many people must have ever wondered, well, given that Binance was lucky enough to survive the “economic massacre” in China and they could partly took advantage of the collapsed exchanges, but even so, at the end of 2017, there were many exchanges with higher liquidity, stronger capital, more users, so why Binance could have been unique and made itself stand out as the market leader?
Binance reached the peak thanks to the following factors:
Firstly, thanks to user support with a right mindset to PR and communications. From the very first days, Binance has always tried to maintain credibility with customers by proving that customer ‘s interests were always placed highest. In addition, with the strategy of using the head of the company as KOL, Binance has created a feeling for users that they are always ready to talk and negotiate, whenever in need.
Secondly, robust technological foundation is another strength. With a CEO having a background in technology, Binance has a reliable security system that other platforms could ever dream of. In addition, while most exchanges only target multiple trading pairs and more coins, Binance has envisioned a more sustainable development: transforming itself into a platform for other projects to build on…
Saving the best for last, the most important reason is… money game
It goes without saying that even if performing excellently in both criteria mentioned above, at last, a cat comes back to its skin; a trading platform is still just a trading platform. If ever wished to become the crypto hegemony, an anonymous exchange must have cards that no one has ever had and done things that no one has ever done. And the first card of Binance is:
Binance Coin – BNB
Back in 2017, stemming from the idea of a unique coin used for a particular trading platform is still quite dubious. Intentionally or unintentionally, on the way of their development, BNB became the most important “ace up the sleeve ” for Binance to impose its influence on the entire market. Starting from utilizing BNB pay transaction fees, creating a demand for users, to working with partners to expand the network in conjunction with the process of coin burning, with a view to cutting supply and continuously bettering Binance platform similar to that of Ethereum. When Binance’s opponents in turn succumbed to the pressure of the market, Binance with the unlimited supply of BNB, was still hale and hearty, being able to maintain profits because they can create their own codes, sell to investors and trade for fiat money to develop businesses further.
Difficulties were not over yet. When Binance had already held a large enough amount of money, it then faced a bear market. As if this were the case of your business, what would you do? 3 fiat-crypto trading platforms, 3 market research agencies, a series of upgrades in the system were all the answers of Binance to minimize the impact of the market price slumps on its business model. Then one day, waiting for the right opportunity, Binance will declare its mainnet was ready, the BNB would abandon the Ethereum network to become the foundation for other projects; and we know that Binance’s shield is now invulnerable.
If you have enough knowledge about Binance trading platform, you will tell right away that this platform is nothing short of a “pump machine”; when a coin is listed on Binance, the question will not revolve around if it will increase or not, but more about how many times it will increase.
This can be evidenced in cases of many people, even though already setting up accounts on OKEx, KuCoin platforms – which also list up a lot of tokens, once Binance announces BNB, they will buy coins at all costs and wait for the pump.
In recent months, when ICO is heading for a downturn, Binance immediately introduced the IEO model with Binance Launchpad, essentially an improved coin pump. By just looking at the BitTorrent, Celer or the popularity of the tokens ready to be listed on Launchpad, we can immediately understand the effectiveness of Binance’s performance.
Binance’s story is still people’s favorite topic to gossip about in the future, as long as this platform continues to take smart steps as they have been going. New trading platforms are still constantly boomed and withered every day, as nobody can exactly predict who would be the market leader in the future, but at least, in the present, that person is still single-handedly executing control over the whole market, albeit the lottery mechanism of selling IEO does not make everyone happy. In addition, in recent days, Binance has been constantly hitting the headlines on reports about Binance.US, Binance Margin or Binance DEX, all aiming at an ultimate goal: building a ginormous money game, touching every corner of the earth, shattering any legal wall that has been written down and of course, allowing investors to spend money in their leeway.
If one day, you see Binance tout a financial service – no matter how crazy, bizarre it may sound – remember the money game view of Binance – the game that Binance has already positioned itself as the winner. The remaining question should be whether you will choose to “play” with them or not.
All in all, are you ready to “(ex)change the world” with Binance?
Writer: Hong Phong Designer: Nhu Giang
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