Binance, which is headquartered in Hong Kong has been growing rapidly and now boasts of more users than the population of the city-state it is based in. A monthly report issued by the cryptocurrency exchanged indicated that the number of its users has reached 7.9 million. Per the bureau of statistics of the Chinese government, the population of Hong Kong is 7.4 million. Even more interesting is the fact that Binance was started last year in September meaning that most of its users numbering in the millions signed up in a period of fewer than 100 days. Now its launching its new product named Binance?Decentralized Exchange.
This comes in the wake of the digital currency exchange indicating that it will roll out a decentralized exchange which will be open to just about anyone, according to the chief executive officer and founder of Binance, Changpeng Zhao. The current model of Binance involves tight control over the digital assets which are traded on the exchange but the decentralized model will see that grasp loosened. Additionally, Binance will not have a say on the virtual currencies that will be listed on its platform. The conditions for listing on Binance?s centralized exchange will however remain.
?On the Binance decentralized exchange we?ll have less control. More likely anybody can list any coin. That?s the philosophy of the Binance decentralized exchange, it?s freedom of choice, freedom of investments. But with freedom, there will be people who are scammers. That?s not something we can control,? Zhao told Bloomberg in a Skype interview.
Towards this effort Binance is undertaking a development of a public blockchain which will allow the trading and transfer of digital assets. The network will be known as Binance Chain and will offer a decentralized exchange to traders. The handling of transactions by this exchange will be automated and this will make third parties redundant.
Per Zhao the decentralized exchange will be launched this year. It is expected that decentralized exchange will require more computing power since a larger number of computers will be necessary for the verification and recording of trades. Additionally the decentralized exchange is expected to be slower compared to the centralized exchange. Users will also be charged higher fees.
To jumpstart the development efforts of the Binance decentralized exchange,?Binance will be holding a coding competition which is community-driven known as Dexathon. A prize pool has already been organized and it?s valued at Binance Coins (BNB) that are equivalent to $1 milion to act as an incentive. Additionally Binance will offer special grants worth approximately $10,000 to university teams that qualify and which are seeking to build Binance Chain.
Slower but anonymous
Decentralized exchanges are suited for users who place a premium on anonymity at the expense of liquidity and speed. On a daily basis Binance processes volumes totaling $1.5 billion and about 1.4 million transactions a second.
A default wallet for storing funds belonging to users is also being built. This is expected to encourage developers to create competing products as the platform is open-source. Per Zhao users will install the software on their computers and this will remain in their control.
Binance?s efforts to unveil a decentralized exchange comes in the wake of centralized exchanges becoming prime hacker targets since they hold digital assets in one location. This year alone hackers have made away with digital assets valued at around $0.7 billion from venues located in Italy and Japan. Consequently, pressure is piling on regulators and exchanges to do more with a view to protecting investors.
The Hong Kong-based digital coin exchange has also been a target of hackers and recently offered a bounty of $250,000 to anyone who might possess information that might lead to those who perpetrated a phishing attack on its platform. In the attack hackers were able to infiltrate the system and gather information belonging to 31 users of Binance through phishing as well as by creating an API key. The hackers then engaged in a pumping and dumping scheme of the VIA coin which consequently rose to over $10 from $2. Binance has also previously experience denial of service attacks.
At pixel coin the price of Binance Coin was $8.79 having appreciated by 0.68%. This is about a third of the year?s record high of more than $24.
Dippli is an independent media outlet that covers the current events in the crypto space. Got breaking news or a story to share? Then feel free to contact us at email@example.com.