‘Transaction Fee Mining’ Transforms CoinBene, Bit-Z into Top Ranked Crypto Exchanges

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'Transaction Fee Mining' Transforms CoinBene, Bit-Z into Top Ranked Crypto Exchanges

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A new strategy called ‘transaction fee mining’ has propelled Singapore-based CoinBene and Hong Kong-based Bit-Z into the top spots for global cryptocurrency exchange trading volume at USD 2.3 billion and USD 1.4 billion in the past day respectively as of this writing on 26 June 2018. This dethrones Binance which usually holds the top spot, and pushes other major exchanges OKEx and Huobi into lower ranks than usual.

Binance and Huobi only have USD 0.6 billion of trading volume each in the past day, which suggests that CoinBene and Bit-Z are taking business away from them since these numbers are much lower than usual. OKEx is near USD 1 billion of trading volume. It is unusual in general for OKEx to have more volume than Binance. Overall, Bit-Z and CoinBene have caused a major disruption of the typical cryptocurrency exchange ranks.

On CoinBene and Bit-Z users are rewarded an equivalent amount of tokens for the fees they spend trading cryptocurrency. This makes them a more attractive choice than typical cryptocurrency exchanges, since traders end up paying no fees overall and get a stake in the new native cryptocurrencies of CoinBene and Bit-Z which could become more valuable in the future.

This is called transaction fee mining, since trading on CoinBene and Bit-Z is the only way to generate the new cryptocurrencies. It is essentially the same as an initial coin offering (ICO), since customers are ultimately using other cryptocurrencies to buy the new cryptocurrencies, but a unique benefit of this form of ICO is free trading.

The native cryptocurrency of Bit-Z is BZ, which is an ERC-20 token that uses the Ethereum blockchain. Only 600 million BZ will be generated in total, so eventually, the period of transaction fee mining will come to an end, and so will the incentive for traders to use Bit-Z over the typical top cryptocurrency exchanges. The native cryptocurrency of CoinBene is Coni, and the period of transaction fee mining will come to an end by 22 July 2018 when 47.48 million Coni will be distributed.

Essentially, the transaction fee mining offered by Bit-Z and CoinBene is for a limited time only, and traders rushing to seize the opportunity has resulted in those exchanges temporarily taking the top spot over Binance, Huobi, and OKEx. The success of these experiments may result in other exchanges offering transfer fee mining in the future.


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