You are currently viewing Understanding Cryptocurrency: All You Need To Know About Binance As A Would-be Investor In Nigeria

Understanding Cryptocurrency: All You Need To Know About Binance As A Would-be Investor In Nigeria

What Is the Binance Exchange?

Binance Exchange is one of the popular cryptocurrency exchanges that offers trading in more than 45 virtual coins including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Binance Coin (BNB).

 

Understanding the Binance Exchange

Primarily known for crypto-to-crypto trading—that is, trading between two cryptocurrency pairs—Binance exchange has gained immense popularity because of its low transaction fees, high liquidity, and additional discounts if users pay in the native BNB cryptocurrency tokens.

The name “Binance” is based on a combination of the words binary and finance.

Like a standard exchange, it offers services around the trading, listing, fundraising, and de-listing or withdrawal of cryptocurrencies. Cryptocurrency enthusiasts willing to launch their own tokens can use Binance for raising funds through initial coin offerings (ICOs). Binance is used by a large number of traders and participants for exchanging and investing in various cryptocurrencies.

Binance In Nigeria

In 2020, the Niara became the first African fiat currency supported on Binance P2P platform. This came out of believe that Africa is a blockchain continent and the need to no longer need to bank the unbanked. It set out to empower as many members of the Nigerian population as possible  with cryptocurrency financial services directly. CEO of Binance, Changpeng Zhao, believes Nigeria is a vibrant innovation hub with great passion for cryptocurrencies, Thus, they strive to provide the easiest cryptocurrency access and best trading service for the African community, and P2P trading is a more flexible approach, giving users the freedom to choose their payment methods and counterparty in a trade.

In February 2021 Binance temporarily suspended its deposit services due to the Central Bank of Nigeria’s regulation of the Cryptocurrency space in Nigeria. Although withdrawal services remain normal and can continue to be processed- though it now takes slightly longer time than usual.

How to start trading

To start trading, users have to complete the necessary KYC(Know Your Customer) requirements. Upon successful trading account creation, users can add cryptocurrency funds to their public wallet address provided by Binance to start trading. Binance supports three types of trade orders: limit, market, and stop limit orders. Limit orders are executed only at the limit price set by the trader, market orders are executed immediately at the best available market price, while stop limit orders become valid orders only when the price reaches a specified level.
Binance offers an additional five types of orders for crypto derivatives, specifically on futures contracts. These trade orders include:
  1. Limit order
  2. Market order
  3. Stop limit order
  4. Stop market order
  5. Trailing stop order
  6. Post only order
  7. Limit TP/SL order

There is no fee charged for cryptocurrency/fund deposits, though withdrawals come with a transaction fee that varies depending upon the cryptocurrency.

 

Advantages of Binance: Additional Services

In addition to exchange-specific services, Binance also offers other tools, platforms, and services for supporting the overall blockchain ecosystem. Binance has a blockchain technology incubator called Binance Labs, which focuses on nurturing promising pre-ICO(Initial Coin Offering) stage projects. It helps deserving cryptocurrency project teams by providing necessary funding for development, advisory resources, and a launchpad for any necessary listing and fundraising exercises. Binance also offers a site called LaunchPad for hosting new and emerging blockchain projects and API(Application Programme Interfaces). As of March 2021, 42 projects have been launched.

It launched its own Binance Coin (BNB) cryptocurrency through an ICO in July 2017. BNB has gained popularity and actively trades with a market cap of around $36.4 billion as of March 2021. It is set to become the native currency of the decentralized Binance exchange.

KEY POINTS

  • Binance is an exchange where users can trade cryptocurrencies. They support many of the most commonly traded cryptocurrencies.
  • Binance provides a crypto wallet for its traders, where they can store their electronic funds.
  • Binance has its own token currency, Binance Coin.
  • The exchange also has supporting programs that help traders make investment decisions.