Category Archives: Changpeng Zhao

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Fiat Pairs Outgunned by Crypto-to-Crypto Trading

A new cryptocurrency exchange review has reported that crypto-to-crypto exchanges out-peaked fiat currency pairs between mid-September to mid-October of this year.

CryptoCompare’s October 2018 Exchange Review records average trading volumes of exchanges offering crypto-to-crypto trades peaked at USD 7 billion a day compared to fiat currency pair volumes only hitting USD 4 billion, showing that pure crypto exchanges have been leading spot trading volumes. BitMEX has been accounting for about 90% of Bitcoin futures trading volume.

In terms of actual numbers, the balance of those exchanges offering fiat pairs and pure crypto-to-crypto trading is fairly equal, currently standing at 63 to 61 but with the spread of trading volume at over 2-1 in favor of pure crypto trading.

Binance CEO Changpeng Zhao suggests that fiat exchanges take longer to set up as some aspects are reliant on exterior forces beyond their control such as banks accounts and fiat gateways. Zhao remarked, “It’s a lot more tricky than pure crypto because, with pure crypto, we control everything; the blockchain does not reject us.”

Elsewhere in the report, it was noted that regulated exchanges such as the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) had returned relatively low Bitcoin futures trading volumes and that BitMEX and BitFlyerFX had averaged just under a quarter of trading volume with BitMEX representing over 90% of the futures market.

South Korean exchange Bithumb has seen a surge in trading volumes after the recent BK Global Consortium takeover. With daily trading volume near USD 400 million, it is the sixth-largest in the world behind Binance, OKEx, Huobi, Bitfinex, and Upbit. A total of 37 different cryptocurrencies are traded on the exchange. The report also indicates that BTC to Korean Won (KRW) trading now represents a tenth of the total Bitcoin trading volume among the top five fiat currencies.

The Intercontinental Exchange (ICE), which operates 6 clearinghouses and 12 stock exchanges including the New York Stock Exchange (NYSE), has announced that physical Bitcoin futures will go live on 12 December 2018 on their first crypto exchange, Bakkt. Physical Bitcoin futures could lead to the long-awaited rally major rally driven by institutional investments.

 

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Binance Off To Flying Start In Uganda With 40,000 Users In First Week

Binance has stepped into Uganda with a flourish as 40,000 new users signed up to the exchange in the hope of bypassing the Ugandan Shilling (UGX).

Many citizens of African countries are unbanked, either by choice or due to complicated prohibitive rules which make it hard to open an account. Uganda is no different, with a recorded 3/4 of the population without any form of conventional banking.

This is Binance’s first fiat-crypto exchange with UGX, the primary fiat currency and comes less than a month after the company acquired an EUR bank account in Malta, with more exchanges to come, according to CEO Changpeng Zhao. Binance’s enigmatic boss clearly realises the potential of Africa as a new investment hub due to the unbanked nature of much of its population:

“Uganda is a really interesting situation, only 11% of the population has bank accounts. It’s both a challenge and an opportunity. So it may be easier to adopt cryptocurrency as a form of currency instead of trying to push for bank adoption”.

Africans have been clever in dealing with financial barriers, and using cryptocurrency is increasingly becoming a go-to way in order to sidestep banking restrictions or weak state currencies. Corruption is also another factor never far from the surface in some African economies often necessitating the need for a clever approach by locals in order to conduct their everyday business.

Recently, neigbouring Kenyan Distributed Ledgers and Artificial Intelligence task force chairman Bitange Ndemo said that that government should consider tokenizing the economy to deal with “increasing” rates of corruption and uncertainties-such is Africa’s increasing faith in crypto ahead of local fiat currencies.

Wei Zhou, Binance’s chief financial officer, suggested that one reason for the exchange’s surge of clientele in the first week is the fact that it is so easy for Uganda’s unbanked to access the system, commenting, “They [users] just have to have money within the mobile payment system. They don’t have to have bank accounts.”

The country’s president, Yoweri Museveni, said recently that he welcomed and embraced blockchain technology in Uganda since it provides full transparency, and added that he was aware how businesses were being negatively impacted by what he called “secrets and deceit.”

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Blockchain Charity Takes Center Stage at World Investment Forum 2018

The World Investment Forum 2018 which is staged annually by the UN Conference on Trade and Development (UNCTAD) was dominated by blockchain this year.

This year’s main event was entitled “Blockchains for Sustainable Development” and attracted keynote speakers who discussed the future of the technology. This year’s main speakers included Binance CEO Changpeng Zhao, TRON Founder Justin Sun, European Parliament member Eva Kaili, Bancor co-founder Galia Benartzi and UNICEF Ventures Lead Chris Fabian.

Binance CEO Changpeng Zhao announced that the company was focusing on delivering a more transparent approach to charitable donations, an area which dogged the industry for many years and had driven donors away. He spoke on UN’s sustainable development goals (SDGs) suggesting that blockchain can be the main driver towards changing entrenched practices of charitable companies:

“For the 17 SDGs, there is one underlying problem we’re trying to solve: transparency. Blockchain has many benefits but ‘transparency’ is the one word I want people to remember today. With increased transparency, charity will improve 100 times: 100x more efficient, 100x more donations and 100x more impact!”

Today at #WIF2018, @Binance CEO Changpeng Zhao @cz_binance launched a new platform that uses #blockchain technology to track donations, allowing people to see where their money goes and who benefits. “With better transparency we can achieve 100 times more results,” he said. pic.twitter.com/c3LQPWLDng

— UNCTAD (@UNCTAD) October 24, 2018

CZ, as he is affectionately referred to, has said elsewhere that blockchain predictions, similar to those about cryptocurrency, should be taken with a pinch of salt. He believes specialized ledgers will change the face of crypto space, taking over from large blockchains such as Ethereum.

Zhao argued platforms such as this using DLT is what people want to see in the future; places where donors’ money can be tracked by all parties. The new Binance platform will initially support BTC, BNB and ETH. Tron founder Justin Sun kickstarted Binance’s Charity foundation with a generous donation of USD 3 million, wanting “to donate money for good cause”. The CEO commented:

All of us here have made the decision to be leaders in shaping blockchain technology for social good. Binance Charity Foundation is taking substantial steps in that direction by increasing the transparency of donations so we can see where the goodwill of the donors is going and what impact it has.”

MEP Kaili saw hidden banking fees an area where blockchain can make some meaningful changes, arguing, “USD 130 billion of hidden fees are now the reality for the banking sector and any transaction you do. The potential to reduce that is huge. And blockchain could be one of the solutions.”

 

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Binance Receives Indirect Singapore Government Investment to Aid Launch

Popular cryptocurrency exchange Binance has received an investment from government-owned holding company Temasek Holdings, with the hopes it will enable the launch of a cryptocurrency-to-fiat exchange desk in Singapore.

Vertex Ventures, the venture capital arm of Temasek Holdings, says the joint investment between Vertex Ventures China and Vertex Ventures Southeast Asia & India will also be used to support other similar fiat-to-crypto operations in Southeast Asia, reports Bloomberg.

The total amount of capital that was invested has not been disclosed.

Binance’s CEO Changpeng Zhao, or CZ, addressed this on Twitter, using the defense “more important than how much you raise, is who you raise it from.”

More important than how much you raise, is who you raise it from. Finding a strategic investor who genuinely wants to help you is key. Many thanks to @vertexventures for all the help! https://t.co/qqKrBLblYH

— CZ Binance (@cz_binance) October 23, 2018

Zhao also used Twitter last month to share the first announcement of the company’s beta testing programme in Singapore.

A mixed bag

After launching just over one year ago, Binance has already racked up a number of controversies during its rapid expansion, having faced problems with authorities in Japan, Hong Kong and most recently New York.

The exchange also faced criticism over a lack of transparency regarding the costs of getting tokens listed on the platform. One CEO of a cryptocurrency project claimed that Binance had quoted him BTC 400 to get his token listed. Zhao denied that Binance would ever quote fees to a potential client in an email.

This triggered a change in policy for Binance, which now shares the costs of getting listed and donates this amount to charity.

In an effort to tap into the market in Africa, Binance recently began offering Bitcoin to fiat trading pairs in Uganda, saying it will be investing heavily in crypto infrastructure across the continent that is struggling with an inflation crisis.

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Binance to Share, Donate Crypto Listing Fees

Major cryptocurrency exchange Binance announced on Monday that it will now provide full transparency regarding cryptocurrency listings fees, while also donating these funds to charity. The changes are effective immediately.

Currently, token projects that wish to be listed on the exchange platform propose their own fees for this. In an official company blog post detailing the policy changes, the process for the project team is said to not change, but rather than being dubbed a listing fee it will now be regarded as a charitable donation.

Binance says it will not impose a figure for the token projects to pay, nor a minimum donation.

The exchange’s charity division, the Blockchain Charity Foundation, was launched in July this year with an aim of promoting blockchain solutions for humanitarian projects. Helen Hai chairs the foundation, in addition to her position as a goodwill ambassador for the United Nations Industrial Development Organization.

A large donation does not guarantee or in any way influence the outcome of our listing review process,” Binance’s CEO Changpeng Zhao writes in the post, who has remained throughout Binance’s history adamant that the company will not be influenced by large amounts of capital to list subpar tokens.

The platform has indeed come under scrutiny this year over these particular fees, which until today have remained nearly always undisclosed by both parties.

Just got a new @binance listing quote. 400 BTC

— Christopher Franko 🧐 (@FrankoCurrency) August 8, 2018

When the CEO of a cryptocurrency project Tweeted in August that Binance had supposedly quoted him BTC 400 in order to have his company’s token listed, Zhao denied that Binance would ever quote fees to a potential client in an email. “We don’t list shitcoins even if they pay 400 or 4,000 BTC… Question is not ‘how much does Binance charge to list?’ but ‘is my coin good enough?’” he stated.

Binance is currently the world’s largest cryptocurrency exchange by trading volume.

 

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Binance CEO Predicts 1,000 Times Swell in Crypto Market

As the crypto community discussed the future of the market this week, Binance CEO Changpeng Zhao has disagreed with recent remarks by Vitalik Buterin, suggesting that the Ethereum founder’s comments about a squeeze on cryptocurrency growth are completely wrong.

Buterin has denied that he made exactly those comments, Tweeting, “I never said that there is no room for growth in the crypto ecosystem. I said there is no room for 1000x price increases.” Buterin has claimed that the crypto market has practically reached its ceiling.

Further explaining that a thousand-fold growth would equal to 70% of the world’s entire wealth seems to have done little to halt Zhao’s charge that cryptocurrencies will go mainstream over time, and thereby reach exactly that level of growth and possibly more.

Zhao maintains that Buterin’s mistake is to view such a huge level of growth in terms of the traditional financial market, in which such a market expansion would be totally unrealistic. He feels that cryptocurrency is capable of making such an impact once it becomes fully operational with an accompanying derivatives market in full sway. He argues:

“I will say ‘crypto will absolutely grow 1000x and more’! Just reaching USD market cap will give it close to 1000x, (that’s just one currency with severely restricted use case), and the derivatives market is so much bigger.”

It is the case now that more central banks are on board with, or if not, certainly examining, cryptocurrencies with more than just a passing glance, and as such, the industry is gaining respect. Blockchain technology is now becoming influential in banking and business at the highest level, having gained respect from some of the world’s major players such as IBM and Microsoft. As central banks begin to delve deeper into the space, it is highly likely that smaller banks will also begin to take an active interest.

The more positive the impact that cryptocurrency makes on the financial system, the more that regulation is likely become not only clearer but more accommodating as crypto becomes the normal way to conduct business.

This is more likely to be the scenario that Binance’s head envisages in making such predictions; thinking of the big picture rather than the status quo. A USD 200 trillion market would make cryptocurrency the main source of payment and would certainly make stock markets around the world look very different. Clearly, a scenario that Zhao sees as achievable.

 

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Binance Demos Decentralized Exchange

Changpeng Zhao has published a video showing a demo of the early stages of the Binance decentralized exchange (DEX), which will be hosted on the Binance Chain. Changpeng Zhao says “As you guys saw, that’s a very casual early demo for the Binance Chain, there’s still a ton of work to be done to turn it into a final product. The team is working on it very aggressively. Nevertheless, I think this is a major milestone for Binance chain”.

The video demo shows how a cryptocurrency based off the Binance Chain can easily be created from the command line, and by the time this technology is released perhaps, it will just be a click of a button to create a cryptocurrency. This looks like it’s even easier than creating a cryptocurrency with the Ethereum ERC-20 protocol, and Binance Chain has the potential to be better than Ethereum for creating new cryptocurrencies in the future.

Another major benefit of creating cryptocurrencies with Binance Chain rather than ERC-20 is the tokens can easily be listed on the Binance DEX, as the video demonstrates. Users can launch trading pairs for their newly created cryptocurrencies, or even for other cryptocurrencies. Since the Binance DEX will intrinsically be decentralized, users will have all the power instead of a central organization deciding which coins get listed.

Further, users will have full control of their cryptocurrency at all times, rather than the way it is now where they have to trust Binance and deposit cryptocurrency on the platform to be able to trade. Users can start trades, cancel trades, deposit, and withdraw at will, and there will be no centralized organization to stop them.

There are some decentralized exchanges based on Ethereum, like IDEX and 0x, but Binance DEX has the potential to be far more popular due to Binance’s well-respected and widely used brand, and the fact that it has tremendous amounts of money to make the perfect DEX.

When cryptocurrency and Bitcoin trading was effectively banned in China in September 2017, Binance left the country along with other top crypto exchanges Huobi and OKCoin. This is motivation for becoming decentralized, since once Binance is decentralized it can’t be stopped and will be available everywhere in the world regardless of government regulations.

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Binance CEO Speaks out on Blockchain’s Future and Why Dapps Are on the March

Binance CEO Changpeng Zhao has expressed his feelings regarding the future of blockchain in a recent interview with Fortune, expressing hope for its future.

CZ, as he is affectionally referred to, indicated that blockchain predictions, similar to those about cryptocurrency, should be taken with a pinch of salt. He sees specialized ledgers will change the face of crypto space, taking over from large blockchains such as Ethereum. Somethin already noted by some investors due to its somewhat tardy transaction speed.

Such startups as EOS, DFINITY and Tezos, reportedly described by some in the industry as “Ethereum Killers” are reputed to offer the same functionality but with greater efficiency, somewhat posing a threat to Ethereum’s dominance as a go-to cryptocurrency.

The Binance boss feels that such specialized blockchains could replace Ethereum over time with more specific tailor-made usage. He suggested that decentralized applications (Dapps) are the next big thing and that he enjoyed the opportunity to work with some these new decentralized projects seeing it as very much the future direction of the crypto industry.

Of course, he isn’t the first to have suggested this. According to Zerion founder, Evgeny Yuttaev, cryptocurrencies are still more speculative than used for practical utilitarian purposes, suggesting there is a lack of use cases for digital currencies in 2108.

He suggests that most ICOs seem to be in search of the next Bitcoin or Ethereum in search of massive profits, but what is really needed is projects which can change peoples lives, and for this to happen, Dapps need to become mainstream. Currently, there are 1,565 Dapps built on the Ethereum blockchain alone, unsurprising given Ethereum’s historical place in the development of blockchain solutions.

Such a view is in contrast with those of Ethereum founder Vitalik Buterin who feels that Dapps which pose a challenge to Ethereum consistently fail, although such a view is hardly surprising given where the network originated from – a smart contract exploit.

 

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Binance Expects Profits Up To USD 1 Billion In 2018

Binance CEO Changpeng Zhao told Bloomberg that Binance has earned USD 300 million so far in 2018, and expects total profits of anywhere between USD 500 million and USD 1 billion by the end of this year. Additionally, he stated that Binance now has 10 million registered users, a statement which also implies that cryptocurrency trading continues to be extremely active and lucrative despite Bitcoin’s steep price decline during 2018.

Binance opened 1 year ago in July 2017, and since then its use has skyrocketed. It is consistently the top-ranked cryptocurrency exchange in the world with an average of USD 1.5 billion of trading volume per day. During the cryptocurrency craze that saw Bitcoin hit record values near USD 20,000, Binance recorded peak daily volume of USD 11 billion.

Binance has experienced quite a bit of legal trouble from governments and was forced to move out of China after the September 2017 cryptocurrency ban. Since then there have been additional legal problems from government authorities in Hong Kong and Japan. This has caused Binance to expand globally so that it can survive. In Malta, Binance received a warm welcome and was able to acquire a bank account, and now Binance is using this bank account to launch fiat to crypto exchanges across the world.

Binance Uganda is already launching and will be trading cryptocurrency for the UGX, and Changpeng Zhao says fiat to crypto exchanges based in Malta and Bermuda are coming soon. Changpeng Zhao thinks that opening more fiat to crypto channels will help increase cryptocurrency prices by providing new routes for fiat money to enter the market.

Ultimately Binance is looking to launch a completely decentralized exchange built on the blockchain, and this will allow for the trading of any cryptocurrency anywhere in the world regardless of government regulations. This is perhaps not surprising since Binance was forced out of its native country of China. Changpeng Zhao foresees that decentralization is the only way to 100% guarantee Binance’s survival. Huobi, which is a major cryptocurrency exchange that was also forced out of China, is also developing a decentralized blockchain-based exchange platform.

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Binance CEO Accuses Crypto Exchanges of Inflating Volume Statistics

In an interview with Cointelegraph, Binance CEO Changpeng Zhao discussed how some cryptocurrency exchanges are engaging in manipulation of their volume statistics to give traders the impression they have more liquidity and are more popular than they really are.

This question was asked to Changpeng Zhao in response to a recent study that found evidence through slippage analysis that OKEx was inflating its volume statistics. Cryptocurrency trader Sylvain Ribes sold USD 50,000 of cryptocurrency on Bitfinex, Kraken, GDAX, and OKEx, and found that the order book became unstable on OKEx even from this relatively small sell. Prices declined on OKEx by over 4%, proving low liquidity and lack of support in the order book.

Zhao says that some cryptocurrency exchanges report volumes twice: if someone buys crypto, an exchange might count that as both a buy and a sell order, effectively doubling the volume of the trade, even though only half the volume was transacted. Binance would only report the transaction value as volume, according to Zhao.

A more fraudulent method of manipulating volume statistics is wash trading. This can be detected when price is moving significantly at low volumes, but stable at high volumes. Essentially, two accounts are set up to buy and sell with each other just to generate volume.

A common reason for wash trading is that some exchanges require a cryptocurrency’s team to guarantee a certain amount of volume to stay listed, so some cryptocurrency teams hire a ‘market maker’ that generates fake volume by trading with themselves. Zhao says Binance does not ask cryptocurrency teams to guarantee trading volume, to avoid wash trading.

According to Zhao, a method to detect if an exchange is being truthful about volume is by comparing the trading volume to website traffic. He says that many of the top 10 cryptocurrency exchanges have similar or higher volume than Binance, but only 10% of website traffic, indicating the possibility of volume manipulation.

 

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