What are the differences between BlockFi and Binance? Out of the several crypto exchanges available out there, both BlockFi and Binance have carved their distinct niche both among the users as well as in the crypto market space.
The audience of Binance includes both crypto traders and holders and is accessible from nearly two hundred different countries and regions.
On the other hand, the audience of BlockFi typically includes those who want to buy or borrow crypto coins or earn interest on them.
As it is, both BlockFi and Binance are two of the largest crypto exchanges in the world that come with varying features and functionalities.
With the rise in popularity and adoption of cryptocurrencies all over the world, these two platforms have also grown in popularity exponentially.
If you are not sure which one among them will be the best fit according to your crypto trading needs, you have arrived at the right place, eventually.
This article deals with some of the most significant differences between these two platforms.
It includes the fees, the security aspects, the coin support offered, the ease of use factors and several other parameters.
When you go through this article in its entirety you will have a proper knowledge about these two platforms and be able to choose the right one among them to use easily and most conveniently.
8 Differences Between BlockFi and Binance
If you are interested in both Binance and BlockFi but cannot make up your mind which one of the two will be suitable for your crypto needs, the following list of differences between them will help you a lot in doing so.
It is important to have such knowledge because crypto platforms like these will continue to grow in importance and popularity in the future at a rapid pace as well as gain more converts at the same time.
1. The Company Background
Binance is one of the top-class crypto exchanges founded in July 2017. The headquarters of this company is currently located in the Cayman Islands and it was founded by its current Chief Executive Officer, Changpeng Zhao.
Initially, it was launched in China but it moved to Japan later on when cryptocurrencies were banned in China in 2017. In the year 2018, the company was shifted to Taiwan.
This platform is well known for its wide range of cryptocurrencies offered that the users can trade with. The platform is pretty safe and secure to use, now that it has learnt from the few security issues and breaches in the past.
It uses a two-step authentication method which adds an extra layer of protection to the accounts of the users of this platform.
BlockFi, on the other hand, is a cryptocurrency management platform. The company was founded in 2017 by Zan Prince who is also the current CEO of it.
The headquarters of this company is located in New Jersey, USA. This platform allows the users to leverage their crypto assets owned to put to fair usage. The users can borrow cash or take out a loan and also earn interest on their accounts or holdings by using this account.
BlockFi is a platform that allows account holders to transfer funds instantly. In terms of trading, the platform enhances the possibilities to make more profits and also make some earnings by holding the coins in the accounts.
The platform acts more like a decentralized finance bank and offers adequate security to the funds of the investors. The BlockFi Interest Account or BIA is the unique feature of this platform that allows the users to deposit funds and earn interest on them as well.
It also allows the users to borrow Bitcoin. Since the launch of this platform, it has grown enormously to provide varied products and services to the users.
Over the years, some more useful features are expected to be added to the platform to make it more productive, advanced, and profitable to its users.
Binance, on the other hand, offers the users two unique features of its own, namely, the Binance Coin which is represented as BNB and the Binance Smart Chain which is termed as BSC.
While BNB was introduced by the platform in June 2017, BSC was launched in September 2020. The platform allows the users to exchange their crypto assets against fees that they can pay with Binance Coin to reduce them further which is already quite low.
With its products and services, Binance has become one of the most popular crypto exchanges that have crossed millions in market cap since its launch. In the year 2019, the company also launched an independent entity by the name of Binance Jersey.
3. Best for
The unique features of the BlockFi platform are best suited for the users who are massive fans of cryptocurrencies but cannot find enough of them on other crypto platforms.
It is also good for those users who own Bitcoin and have a meticulous understanding of the working process of crypto investments.
This is a sophisticated platform that needs a learning curve and therefore is more suitable for those people who are well-versed with the resources and crypto news.
This will not only allow them to take their investments to the next higher level but also to enjoy experimenting with different crypto assets on this platform.
The features of this platform will allow them to polish their skills and gain more knowledge about the working process of the crypto market on the whole and become a pro in crypto trading.
On the other hand, Binance is best suited for the larger segment of crypto users that come from all walks of life and all possible backgrounds.
It is suitable for users having a varying level of expertise who are looking for a reliable crypto exchange that they can use to transact crypto coins and fiat currencies.
The platform will not only facilitate fiat currency payments but will also support making different crypto transactions depending on your choice. It is also a suitable platform for those users who are looking for a secure and dependable P2P platform for trading.
In short, Binance is a one-stop-shop for the users that also partners with Simplex to offer debit and credit cards. Users who are looking for payment options like wire transfers and SEPA transfers will also find Binance to be suitable for them.
4. The Pros and Cons
The most significant benefit of using the Binance platform for crypto trading is its speed of transactions. Typically, with the use of the latest technology, the platform can process as many as 1.4 million orders in just a matter of seconds.
Another significant advantage of using this platform is that it allows the users to trade at low fees of 0.1% which can be further reduced by up to 25% when they use the native token of the platform BNB to pay for the fees.
Apart from that, the platform offers more liquidity and reasonably good customer support. As for its downsides, the security aspect of this platform is a bit tarnished but the good news is that for the past few years it is trying hard to push the limits to ensure optimal security.
Also, residents of New York, Connecticut, Alaska, Alabama, Hawaii, Georgia, Florida, North Carolina, Louisiana, Vermont, Idaho, Texas, and Washington cannot use this platform.
On the other hand, one of the most significant benefits of using the BlockFi platform is its rates. The platform offers some of the best interest rates to the users.
Add to that, the app of this platform is quite handy and allows the users to buy, sell, trade, earn interest, as well as take out a loan, all from a single centralized hub and on the go.
The downside of the platform is that it is not designed for the beginners in the crypto space to use. Also, you will be highly disappointed if you are looking for some assistance and financial advice from the platform.
5. Features and Offers
The BlockFi exchange comes with refined infrastructure to offer its unique non-banking lending services to the users. The infrastructure integrates seamlessly with a large number of blockchain to offer the users with top-class service and support.
It is also planning to extend its services and products to its retail and institutional clients. The other useful features of the platform that makes it a good one for the users to choose include:
- Interest generating accounts
- Unlimited refund in Bitcoin at 1.5% on every purchase
- No foreign transaction fees and
- No annual fees for maintaining an account.
It also offers 3% to 8.6% compound interest on crypto holdings. The amount offered depends on the type of coin and the fluctuations in the market value as well. This interest is credited daily but you can cash out only at the end of the month.
It also offers loans against crypto assets that the users can borrow at a low rate of interest of 4.5% APR. Since the interest is tax deductible and you do not need to sell your crypto assets, this is a lucrative deal because you do not have to report capital gains.
This saves money on taxes though there is a risk of losing the collateral if the prices drop.
As for the Binance exchange, it mingles finances and digital technology and offers access to more than 500 different types of crypto coins available on the market to the users.
It also upholds liquidity and security making it an efficient crypto trading platform that has acquired seven organizations till now with the latest one being Swipe.io. The other features of this platform include:
- Perpetual futures account offered since September 2019
- Leverage up to 125 times the original value of the contracts and
- USD loans backed with crypto as collateral.
The interest rate as well as the LTV or Loan to Value is however not fixed. Instead, these are calculated from the time a loan request is approved.
The company has made as many as 18 investments and has partnered with numerous key players in the market to raise its total funding amount and market cap up to nearly $58 billion as of 2021.
It offers SAFU or Secure Asset Fund for Users and also updates its KYC policies from time to time taking lessons from the security breaches it faced in 2019 when it lost around 40 million dollars.
6. Interests Paid
As of August 21, 2021, in terms of interests paid, on stable coins Binance offers an interest of up to 15% annually on BUSD through their lending program. As for BlockFi, the same is up to 8.6% Annual Percentage Yield for its supported stable coins USDC, GUSD, PAX and USDT.
As for the cryptocurrencies, the rate of interests paid by Binance for its 0 VIP level is as follows:
- For 60 BTC, it is 18.25%
- For 1200 ETH, it is 9.12%
- For 200000 XRP, it is 18.25%
- For 3000 BNB, it is 109.50%
- For 200000 TRX, it is 14.60% and
- For 15000 LINK, it is 9.12%.
On the other hand, BlockFi pays its interests in three tiers for BTC and ETH such as:
- For tier 1 where you need to hold 0 to 0.5 BTC, the APY is 5%
- For tier 2 where you need to hold more than 0.5 and up to 20 BTC, the APY is 2% and
- For tier 3 where you need to hold more than 20 BTC, the APY is 0.5%.
As for ETH, it is:
- For tier 1 where you need to hold 0 to 15 ETH coins, the APY is 4.5%
- For tier 2 where you need to hold more than 15 and up to a thousand ETH coins, the APY is 2% and
- For tier 3 where you need to hold more than a thousand ETH coins, the APY is 0.5%.
As for other crypto coins such as LINK, the rate of interest paid by BlockFi is 4.5%.
7. Customer Support
In terms of customer support, you will find some terrible reviews from the users of Binance. However, the platform offers a lot of educational materials on cryptocurrencies and blockchain technology, how-to videos, good tutorials on crypto trading, a useful blog academy, and Binance Info which is considered to be the encyclopedia of crypto.
On the other hand, BlockFi offers good customer support with different sections on its website dedicated to different categories such as BlockFi Interest Account, BlockFi loans, and BlockFi Rewards Bitcoin Credit Card.
Also, if you do not find the required info or help from the website, you can submit a ticket request or contact them via active social media accounts. It will take about a day to get a response from them.
8. Some Other Differences
Finally, here are a few other differences that will also help you a great deal to differentiate between these two platforms.
In terms of trading fees, Binance charges 0.1% for margin trading and spot trading, 0.04% for futures trading for takers and 0.02% for the same for makers.
However, the trading fees are calculated on the basis of the monthly trading volume as well as the daily BNB balance. However, BlockFi does not charge any fee for making transactions apart from withdrawing.
There are also some limits imposed on daily trading based on the size and account activity.
As for the rates charged on borrowed money, BlockFi charges at 4.5% APR for all currencies but the rates of Binance differ on the type of coins used as collateral. For stable coins, an Annualized Interest Rate of 5.3% is applicable for a 7-day period.
In terms of collateral or Loan to Value Ratio of both these platforms, it is 50% on BlockFi, which means that the collateral is twice the loan amount, and on Binance the LTV varies on the type of crypto assets used as collateral.
On BlockFi there are no minimum or maximum deposit requirements but withdrawals are subject to limits imposed according to the type of crypto coins transferred from the wallet.
Binance, on the other hand, does not charge for crypto deposits but fees apply on withdrawals depending on the type of crypto and the limits on deposit and withdrawals vary according to the crypto asset as well as the verification level.
In terms of security and trustworthiness, BlockFi is better since it follows a robust and completely transparent KYC policy. It is also regulated by The New York Department of Financial Services.
The funds of all the customers are managed by Gemini, their primary and licensed custodian which follows SOC Type 2 examination security compliance to protect the data and funds of customers.
Binance has now implemented SAFU, cyber forensics, AI, Universal Second Factor and Two-Factor Authentication for logins and withdrawals, and address whitelist to ensure the security of accounts.
There is no insurance fund offered by BlockFi even though it is licensed by FDIC. Binance, on the other hand, offers a Binance Insurance fund which covers losses when the account balance goes under zero from the collateral of the fees of non-bankrupt clients, of course, under specific terms and conditions.
In terms of availability, the main Binance platform is not available to the US residents who need to use the dedicated Binance.US platform but BlockFi does not have any such restrictions.
As for the native tokens, BlockFi does not offer any to the users but Binance does in the form of BNB. This token when used to pay the fees can reduce it by 25%.
Which is Better – BlockFi or Binance?
When it is all about buying, selling, or holding crypto assets it is imperative that you will need to use a reputable and trusted platform. This is the key to your success.
Ideally, things will seldom go wrong when you choose any of the two crypto platforms BlockFi and Binance. In fact, there are several users who use both these platforms to fulfill their varied needs.
However, when it comes to choosing one among them, you should look at what it offers and what you want the platform to do for you rather than finding out which is better amongst them.
This means that you should tally the features and offers of each with your preferences and needs to make the right choice eventually.
Since both these platforms come with their characteristic pros and cons, it is the differentiating factors of Binance and BlockFi mentioned above that will help you a lot in making the right choice.
However, in case it does not and you find it a bit confusing going through the whole lot of it, here are the most basic things summarized just for you.
As for Binance, it is one of the leading crypto trading platforms that support more than a couple of crypto coins for deposit and withdrawal.
This enables it to cater to the needs of the beginners in the crypto industry as well as the advanced traders alike.
This platform is also one of the most affordable platforms to transact crypto coins at low fees and in more convenient ways.
In the past few years, this platform has enabled a lot of customers all over the world to achieve incredible success while trading with their crypto assets.
Binance is one of the highly trafficked and most respected crypto exchange platforms that you will find in the circuit.
The main platform can be accessed from anywhere in the world while for the US residents there is a dedicated platform, Binance.US.
Though it comes with fewer features than the main platform, it is quite good for the crypto traders and investors in the US.
You will get to use a large number of resources on the Binance exchange that will help in your crypto trading and investing needs.
Apart from its useful features, this platform also offers some very useful self-service tools and indicators that help both the new investors as well as the experienced ones, whether they are individuals or financial institutions.
You will also get to trade with one or many of the hundreds of different cryptocurrencies and trading pairs available on the Binance platform. And, as for the fees, there is nothing to be worried about since it is quite low.
You can expect a fee of 0.1% if you go for spot trading or pay a fee of just 0.5% if you want to buy or sell crypto assets on this platform.
As said earlier, in addition to offering some of the most competitive fees, this platform also offers a discount of up to 25% on the fees if the users pay them in their native token BNB.
The users of Binance are benefited in ways more than one and some of the benefits are:
- Insured assets
- Easy to use and fast interface
- Advanced features.
However, there are several traditional payment methods found missing on this platform and the decentralized options of it seem to disrupt its major functionalities to some extent. Also, the users are not provided with a proper and detailed market analysis.
On the other hand, BlockFi should be your chosen platform to deal with your crypto tokens if you are more interested in taking out crypto-backed loans at some of the most generous interest rates or interested in holding an interest-yielding account.
In fact, you should not consider BlockFi to be just a crypto exchange. It is much more than that.
As for the features of BlockFi, you will get to use a lot of different financial products of institutional grade. These tools will help you to transact your crypto assets on the markets most easily.
This is in keeping with the mission of the company – to provide the users with multiple opportunities such as:
- To earn interest
- To trade your crypto coins
- To borrow cash.
While offering all these opportunities, the platform has earned a lot of reputation and has become one of the most reliable financial service providers you will find in the market.
The features that set BockFi apart from other crypto trading platforms are its finances that are backed by Fidelity, SoFi and other big names in the industry. Its features are at par with those that you will find in some of the large corporate banks.
The security features of this platform are also quite good to the users as well as the platform itself from security breaches and issues. The platform also follows all the financial regulations to operate in the US.
All these features of the BlockFi platform offer the users a complete peace of mind and its relationship with the giant institutions leverages a few specific types of crypto assets to perform at the highest possible levels.
The good thing about this platform is that it does not charge any transaction fees and does not come with any hidden clauses or fees as well but still offers a lot of useful tools and indicators to help the crypto traders and investors who have just stepped into this exciting field.
However, there are some fees that you will need to pay when you make any withdrawals but these are quite low and constant. Therefore, you need not worry much about it.
This platform is also good for those who are more experienced and is also a trusted and easily accessible platform.
If you choose to go with BlockFi, you will be able to buy or sell crypto coins in different forms along with a wide range of USD-based stable coins.
The positives of using BlockFi include:
- More transparent terms and interest rates
- No minimum requirements for withdrawal
- No monthly fees are charged and
- Credit cards include Bitcoin rewards.
However, if you choose to use BlockFi you should also keep its downsides in mind which include only one position to get a loan, the loan terms are only for 12 months and it provides only three collateral options.
As it is, Binance is a suitable platform for the experienced investors but BlockFi will prove to be extremely helpful to those users who are looking for a simplified exchange.
Now that the differences as well as the factors to consider to determine which among BlockFi and Binance are suitable for you to use, this article has surely saved a lot of your time on research.