I’ve been in and out of the blockchain ecosystem for the last three years. I’ve made my first purchase the same month Binance launched. In the meantime, I’ve gained a CoinMarketCap compulsive checking behavior after holding a bag through the last crypto winter.
While doing my daily run on CMC, I noticed that an AMA was about to take place shortly, featuring Binance’s CEO, Changpeng Zhao (CZ). Binance purchased CMC in early April and the AMA session from July 22nd was a way of promoting the platform’s new chat feature.
This got my interest, so I decided to follow the AMA.
I was, and still am challenged by scaling issues, having to run a remote business. Naturally, I asked CZ about Binance scaling. I figured that someone who runs a multi-billion-dollar company with 1000+ employees would have some interesting answers.
CZ believes that technology and customer service have been the two biggest challenges for scaling Binance up to this point.
Technology
In the landscape of tech and blockchain companies, Binance is a rather new player with only three years of activity. It quickly became the world’s biggest cryptocurrency exchange. This growth was largely fueled by a great product since Binance had the fastest matching engine when it launched with 1.4 million orders/second.
The technology side - that you have to prepare a lot in advance. The technology investments need to happen much earlier before the bull market hits you.
On June 28th, Binance released a new matching engine update that took two years to develop. It’s believed to have resulted in a 10X in performance.
We spent two years doing a matching engine upgrade and this version is so much faster than the previous one, and can handle so much more load.
This update made Binance future-proof.
For the technology aspect, you can just invest early and wait for the bull market.
Customer Service
Customer service is a real issue for many exchanges and other businesses dealing with a large user base.
The other aspect is really hard to scale, customer service. When we have tens of thousands [users] registering in one day, quite a lot of them will have questions to ask. For some of the basic questions we now have a very simple bot answering but the experience is not so good. Most people can detect it’s a bot, and prefer to speak to a real person.
Then he followed up:
Real people are very hard to scale. They scale linearly, and we have to hire them, train them and it just takes a very long time.
Binance now has a remarkable team but in the midst of another bull run, they might still experience customer support issues.
Depending on the pace of the next bull run, we might still have customer support issues [if it’s a really fast pace]. That’s just the nature of the business
My Take
CZ seems to have a solid grip on technology and the future of the industry. Binance is constantly purchasing new companies, Swipe.io being the latest acquisition on June 30th. This further diversifies the company and creates a competitive advantage.
As for customer support scaling, all exchanges are dealing with this issue. I don’t see an easy fix in the near future.
You can check out the full AMA on YouTube. This link includes a timestamp that takes you to the beginning of CZ’s answer on scaling.