Opinion: Binance has proved itself to win the title of “Best cryptocurrency exchange in the world”
I had stopped being a fan of cryptocurrency exchanges. One of the exchange (Cryptopia) where I had some funds was hacked and the exchange shut down, while the other not so well known exchange (Coindelta) shut down out of the blue, causing me to hastily withdraw funds.
I started hating exchanges to an extent, that I became critical of them. If someone would email and ask me how do they store their Bitcoins, I would recommend them some wallet. And when Binance was hacked, the first thing in my mind was “Ah I was, right no exchange is safe”.
But one thing I did not consider between all the other cryptocurrency exchanges and Binance, is their commitment towards their business.
A couple of hours after the announcement of the hack, Binance’s CEO Chang Peng Zhao faced the pre-scheduled Twitter AMA. Any other CEO would have canceled it. In fact, no CEO of an exchange updates its users about the situation (look at Cryptopia’s Founder no word from them). But CZ’s response was different. He not only faced the community criticism with an open mind but also assured users that their funds won’t be lost.
CZ faced a lot of criticism regarding the Reorg of Bitcoin blockchain. For those of you who do not know, what chain reorg is, it is a mechanism which allows the chain to be split. In a reorg, the chain would be split before the movement of the 7000 BTC and a new chain would be created. Essentially ensuring the transaction never took place.
#Binance Security Incident Update
— Binance (@binance) May 10, 2019
The Bitcoin community was after CZs life for even thinking about a Reorg. But I ask the critics of the reorg, what would they do if they had just lost 7000 BTCs? In a pressure situation, any human will try to find the best way out. Ultimately, he gave up on the idea whether for the good of the community or whether it was hard to pull? In the end, it doesn’t matter.
There was a lot of uncertainty around Binance after the hack as the exchange had stopped everything. But then CZ took to Twitter and assured that trading will be up within a few hours but Deposits and Withdrawals would remain suspended till a week.
At this point, I still did not trust cryptocurrency exchanges. In my mind, I was thinking that 1 week would become 2 weeks, then a month. This paranoia is based on past experience. But lo behold as promised Binance was back on track, with the deposits and withdrawals working flawlessly.
Binance stores 10% of the trading fee in a special fund called the Secure Asset Fund for Users (aka SAFU Funds). This is a special fund by Binance which can be used to compensate user fund’s in case of an emergency.
And Binance used this fund to compensate the users. In my opinion, (I may be wrong) no other exchange does that.
Binance team, as well as the CEO’s handling of situation, has got my trust back towards cryptocurrency exchanges and I would like to thank the team for the wonderful handling of the situation.
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