Binance Coin (BNB) 101 - Complete Guide
Binance Coin (BNB) is the cryptocurrency for the Binance cryptocurrency exchange platform. The coin was developed by the founder of Binance, Changpen Zhao, as a decentralised digital asset to power the ecosystem of the exchange. Binance is now the world’s largest cryptocurrency exchange, and its native coin has a market capitalisation of $4.26 billion.
This article will look at everything you should know about Binance Coin and its future in the cryptocurrency market. Once you have read the article, you should understand what BNB is and how you can start using it.
What Is Binance Coin and Why Was BNB Created?
The BNB coin powers the Binance ecosystem and is the native cryptocurrency of the Binance chain. Founder Changpeng Zhao launched the Binance cryptocurrency in 2017 after an initial coin offering (ICO). The ICO brought in over $15 million and funded the start-up expenses.
In the cryptocurrency circles, the Binance platform is considered the best exchange globally in terms of trading volume and provides a trading platform for over 150 cryptocurrencies. The exchange launched its cryptocurrency to work in tandem, and the BNB coin price for one token started at $0.1 and has since risen tremendously in price.
The coin was created with the intent of operating a native cryptocurrency. The BNB coin was also designed to offer traders and investors an alternative way to pay fees that the exchange charges. This digital currency has a maximum supply of $200 million, which means that it will eventually surpass Bitcoin in terms of supply.
Unsurprisingly, BNB has many use cases on the Binance blockchain. One such capability is that it can be used to pay an assortment of fees on the Binance exchange. Some of the expenses you can use the Binance Coin for include trading fees, exchange fees, and listing fees.
Besides paying fees, investors and traders can use the BNB digital currency to invest in specific ICO offerings recognised by the Binance exchange and participate in initial exchange offerings (IEO) on the Binance Launchpad.
How Does Binance Coin Work?
Out of the 200 million BNB coins that were initially mined, 100 million of them were distributed during the ICO, 80 million of them funded the Binance project, and 20 million were attributed to angel investors. BNB coins themselves were previously ERC20 coins until Binance recently upgraded the originally released token to its own mainnet blockchain.
The Binance chain and smart chain allows users to build their own decentralised apps dApps and digital assets on one blockchain. They can do this while also taking advantage of the fast trading performance that Binance offers on their Decentralized exchange (DEX).
Binance then gradually buys BNB coins and carries out token burning to remove more and more of the coins from circulation to increase its value continually. Half of the BNB coin will eventually be destroyed this way. The Binance chain uses the Tendermint Byzantine fault-tolerant consensus mechanism, which involves several nodes for validating, witnessing, broadcasting, and accelerating processes to speed up transaction validations.
BNB coins support the entire Binance DEX, allowing digital assets to be issued and exchanged without centralisation. Binance has also announced that it will be introducing staking for its native coin.
Key 3 Selling Points of Binance Coin BNB
The most significant advantage that Binance has over competitors is its substantial savings concerning trading fees. VIP BNB users have incredible discounts and perks when trading on the Binance exchange. When paying your trading fees, you can use BNB coins instead of the assets you are trading in. Users who decide to use the BNB digital currency to pay transaction fees get an added discount of 25% on the applicable trading fees.
Increased Online Usability
The BNB coin has multiple use cases that make the digital currency increasingly attractive to potential traders and investors. Binance’s coin can be used to pay travel expenses at select retailers in Australia, buying virtual gifts on a live video streaming platform, and you can even settle your crypto.com credit card bill with BNB coins. Many retail establishments using the XPOS device are now accepting this cryptocurrency as a form of payment.
One of the most trusted cryptocurrency coins
In terms of safety, the Binance digital coin is one of the most trusted digital currencies available on the cryptocurrency market. This is in part because of its ease of operation and high withdrawal limit of $30,000. Many investors and traders alike are also gaining more confidence in the BNB coin because of the minimal security issues the Binance blockchain presents.
Is Binance Coin Worth the Investment?
The immense popularity of the Binance exchange platform is lending some of its success to its BNB coin. The world is quickly becoming digitalised, and online transitions are becoming more and more evident across all industries.
Many people recognise the true potential of cryptocurrencies, and investing in Binance Coin is no exception. As the Binance platform grows, so does the BNB currency. This is further solidified by the fact that its infrastructure is just as robust as other cryptocurrency protocols.
According to expert technical analysis, the BNB Coin is pointing towards steady growth and, as such, could be an excellent long-term investment option. The digital currency is expected to rise in value with long term predictions placing the coin at a potentially profitable position for investors.
It did not get to the prominent position it is now overnight. This cryptocurrency is displaying favourable trading and tremendous potential future growth. In terms of volatility, the BNB coin is one of the less volatile coins to trade in, and although this is positive for traders, it can be difficult to find key entry and exit points.
Cryptocurrencies are notoriously volatile, and for those who don’t know what they are doing, trading in Binance Coin could be risky. There isn’t anyone who can tell you with absolute certainty if an asset is a good investment. The best advice is to thoroughly examine the cryptocurrency that you are interested in before making any decisions.
Frequently Asked Questions
The purpose of the Binance blockchain is to create an alternative online marketplace where digital assets can be issued and exchanged in a decentralised manner.
Yes, Binance aims to continually adapt its blockchain to make the circulation and value of assets more accessible.
The native coin on the Binance chain is the BNB coin.
On the Binance chain, you can send and receive BNB, propose trading pairs between two different coins and issue new tokens to digitalise assets. You can also use the Binance chain as an underlying exchange or transfer network for assets, to name a few of the options available to you.
Yes, the BNB coin is a legitimate currency and can be used for many purposes, such as making payments and buying goods.
Yes, smart contracts are now supported on the Binance chain through their new mainnet.