In a rare in-depth interview, Binance founder Changpeng Zhao (CZ) shares his pragmatic philosophy on decentralization, explains why he sold his house to buy Bitcoin, and reveals how Binance became the world’s largest crypto exchange by staying in the “middle ground.”
The Man in the Middle
For much of the past year, Changpeng Zhao — better known as CZ — has operated from a room smaller than 100 square feet in Singapore. From this compact space, the Canadian-Chinese entrepreneur has remotely managed Binance, the world’s largest cryptocurrency exchange, valued at over $100 billion.
Before the pandemic, CZ governed Binance while constantly on the move — from Japan to Malta, Uganda to Singapore — navigating countries with relatively open cryptocurrency policies and meeting with local industry players and government officials, including the President of Uganda and the Prime Minister of Malta. After the pandemic grounded him in Singapore, he connected with nearly 3,000 Binance team members distributed across more than 60 countries via video calls, his only major “equipment upgrade” being a green screen for virtual backgrounds bearing the signature yellow Binance logo.
What makes CZ unusual among crypto founders is his lack of a typical persona. He is neither a zealous true believer nor a charismatic evangelist. With his crew cut and medium build, his defining characteristic is, paradoxically, his lack of defining characteristics. In an industry of extremes, CZ walks the middle path.
Selling a House for Bitcoin — and Never Looking Back
CZ first encountered Bitcoin around mid-2013 when he read the whitepaper. Intrigued by the technology, he attended a summit in Las Vegas later that year where he met the industry’s future luminaries, including Ethereum creator Vitalik Buterin. What struck him was the sincerity and dedication of the community — young technologists who were clearly not the drug dealers the media had portrayed.
“At the airport preparing to leave, I decided I would sell my house to buy Bitcoin and quit my job to join the industry 100 percent, no matter what — even if it meant just writing code,” CZ recalled.
In 2014, he sold his apartment in Shanghai and converted the proceeds to Bitcoin, gradually moving 99 percent of his personal wealth into cryptocurrency. He has never purchased real estate since, citing “poor liquidity” as his reason.
The decision was not without pain. Within a year of selling, Shanghai property prices doubled while Bitcoin dropped to a third of its value — a sixfold gap. “There was internal pressure. Was everyone else wrong, or was I the only one who was wrong? Most likely it was just me,” he admitted. “But I couldn’t figure out why I would be wrong, because I believed this was the future.” He later drew parallels to the 2001 dot-com crash, when Amazon, eBay, and Google all fell by 98 percent before their eventual recoveries.
Bitcoin as a Platform, Not Just an Asset
When asked about Bitcoin’s fundamental nature — currency, asset, or something else — CZ offered a perspective that reflects his systems-level thinking.
“I think Bitcoin is a new technology platform, not a specific thing,” he explained. “When the internet first appeared, people thought it was just another communication channel alongside telephones, radio, and television. But the internet was actually a foundational layer — it spawned internet versions of radio, video, social media, and entirely new things that never existed before.”
He views blockchain and Bitcoin similarly: a foundational infrastructure upon which digital versions of currencies, securities, bonds, and entirely novel instruments will be built. “Many people don’t understand how big this is. When a new platform emerges, it creates new versions of everything traditional, plus things that tradition never had.”
On Bitcoin’s market dominance, CZ predicted a long-term decline in Bitcoin’s share of total crypto market capitalization, noting that while Bitcoin benefits from network effects as “the global reserve currency of digital assets,” its innovation pace cannot match newer projects. However, he acknowledged that surpassing Bitcoin in market cap remains extremely difficult because “Bitcoin is the most decentralized — its founder is gone.”
How Binance Became Number One
Binance achieved the top position among crypto exchanges within six months of its founding and has maintained it since. CZ attributes this to an unwavering focus on users — a philosophy that manifests in specific decisions around token listings, product design, and risk management.
The exchange allocates 10 percent of all trading fee revenue to SAFU (Secure Asset Fund for Users), a protection fund for extreme situations. It also implemented what CZ calls a “responsible trading program” — unique in the industry. New users attempting futures or options trading must answer two qualifying questions: What probability do they assign to losing money? (Those answering below 50 percent are blocked.) And whose responsibility is it if they lose? (Those blaming the exchange are redirected to spot trading only.)
Perhaps most remarkably, Binance actively prevents users from trading when losses reach certain thresholds. “We block them from trading for 48 hours. I believe we are the only platform that stops users from trading,” CZ said. “This user will only hurt themselves. After they get hurt, they’ll stop anyway — we just help them stop a day earlier. They lose less money, we lose a few dozen dollars in fees, but we retain a long-term user.”
The 2018 bear market proved surprisingly beneficial for Binance. While competitors struggled, CZ focused entirely on upgrading infrastructure and expanding system capacity. “If the market had kept rising in 2018, we couldn’t have handled it. There might not be today’s Binance,” he reflected. The investment paid off: when Bitcoin rose from $20,000 to over $50,000 — a 2.5x increase — active users surged twentyfold, far exceeding even their aggressive expansion estimates.
Wallet Security: “I Couldn’t Steal Coins Even If I Wanted To”
On the critical question of asset custody, CZ described Binance’s multi-signature security architecture. The exchange’s largest wallet requires seven out of fifteen designated signers, who do not know each other’s identities. Only a very small number of people know who all the signers are, and CZ himself is deliberately excluded from the signing list.
“Binance withdrawals have nothing to do with me. I couldn’t steal coins even if I wanted to,” he stated. The signers are selected based on specific criteria: stability, reliability, family ties (“single people feel less stable”), and global geographic distribution to protect against natural disasters and internet outages. The system uses automated tools so that operations managers never know who the wallet custodians are.
BSC vs. Ethereum: “If My Car Is Ten Times Faster, That’s Innovation”
CZ addressed the competitive dynamics between Binance Smart Chain (BSC) and Ethereum with characteristic pragmatism. He insisted the two serve different user bases rather than directly competing: Ethereum appeals to those who value maximal decentralization, while BSC serves users in Southeast Asia, India, and Africa — the “bottom of the pyramid” — who need affordable access to blockchain.
“Ethereum transaction fees require $10 for a simple transfer, hundreds for a complex smart contract. Unless you’re doing million-dollar trades, you can’t afford the fees,” CZ noted. “We provide a cheaper network so more people can use and enter blockchain.”
When critics called BSC an Ethereum clone lacking innovation, CZ pushed back sharply: “You say I copied Mercedes-Benz, but my car goes ten times faster — isn’t that innovation?” BSC achieved this through 21 validator nodes with high-performance machines and architectural optimizations, trading some decentralization for dramatically better throughput.
CZ was candid about BSC’s centralization trade-offs, acknowledging that Binance is BSC’s largest BNB holder. But he argued this alignment of incentives actually drives further decentralization: “BSC becomes more valuable when fully decentralized — the entire BNB market cap grows higher, and the network effect of attracting users becomes stronger. So from a profit motive, we want decentralization.”
Decentralization Is a Spectrum
Perhaps CZ’s most distinctive philosophical contribution is his rejection of binary thinking about decentralization. “Decentralization is a spectrum of gray, not black and white,” he stated. “If you’re extremely decentralized but transaction fees are extremely expensive, that’s not very usable. There are very fine trade-offs involved.”
This pragmatism extends to his views on government regulation. While attracted to cryptocurrency’s freedom, CZ firmly distances himself from crypto anarchists. “I am absolutely not an extreme anarchist. I cannot imagine how society would function without government and police — how would people protect themselves? Hire private security?”
He advocates for a balanced approach: regulation is necessary, but waiting for complete regulatory frameworks before building would be counterproductive. “Regulations require case studies. You can’t tell an industry that doesn’t yet exist what it can and can’t do, and expect it to develop. That’s impossible.”
On central bank digital currencies (CBDCs), CZ observed that most first-generation CBDCs remain relatively centralized — with issuers who can increase supply, control networks, and reject transactions. “You could say it’s blockchain, and you could say it’s not. But I don’t think we need to be so fixated on definitions. Decentralization itself is a matter of degrees.”
The Glue, Not the Spike
CZ’s management style mirrors his philosophical moderation. Binance operates without a headquarters or physical offices, with all 3,000 team members working remotely. Internally, they avoid the word “company,” preferring “organization,” and use “team members” rather than “employees.”
When asked about his evolving role, CZ described a shift toward talent attraction and team cohesion. “My biggest value at Binance now is holding the team together — keeping strong people engaged and bringing outside talent in. So lately I’m just on the phone all day, spending a lot of time talking.”
He traces this collaborative instinct to his youth. After emigrating from Jiangsu, China to Vancouver at age 12, CZ spent four years as his high school volleyball team captain — a role he described not as the star attacker but as the glue. “The captain is usually the setter, responsible for organizing and coordinating the whole court. He’s not necessarily the strongest attacker. Our team had several guys taller, stronger, and who could jump higher and spike harder than me. I’m not the one who spikes the ball.”
That self-assessment — the coordinator rather than the star, the pragmatist rather than the ideologue — may be the key to understanding both CZ and Binance’s remarkable trajectory. In an industry dominated by maximalists and true believers, sometimes the person who walks the middle path goes the furthest.
Originally published in Chinese on BTCover.
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