BINANCE COIN: A BRIEF SUMMARY
Binance Coin (BNB) is the native token of Changpeng Zhao’s exchange platform Binance. It was launched through an ICO in 2017. BNB was originally an ERC-20 token operating on the ETH blockchain. BNB’s total supply is capped at 200 million tokens, half of which is destined to be burned through Binance’s quarterly buy back and burns. The ERC-20 BNB tokens were converted 1:1 to BEP-2 BNB in April 2019 with the launch of the Binance Chain mainnet. This means BNB is no longer hosted on ETH’s blockchain. BNB can be used as a means of payment, as a utility token to pay fees on Binance, or to participate in the sale of tokens on Binance Launchpad. BNB also powers Binance DEX.
WHAT IS BINANCE COIN (BNB)?
Binance coin (BNB) is the native utility token of the Binance cryptocurrency exchange. The cryptocurrency is a top five cryptocurrency by market cap. The crypto token reached multiple all-time highs throughout 2021 as it rivalled Ethereum.
Binance coin was originally issued as an ERC-20 token when the cryptocurrency was launched through an initial coin offering (ICO), which was held from 26th June to 3rd July, 2017. The crowdfunding event raised $15 million (~£10.88 million) and 100 million BNB tokens were offered to the public at $0.10 (~£0.07) per token.
The network’s total supply is capped at 200 million tokens. While 100 million tokens were offered to the public, 80 million tokens were distributed to the founding team and 20 million tokens went to angel investors. The Ethereum-based BNB tokens were swapped with BEP2 BNB in April 2019, on a 1:1 basis, with the launch of the Binance Chain mainnet.
In terms of market capitalisation, Binance has been the world’s largest cryptocurrency exchange since 2018 and binance coin has a huge role to play in the ecosystem. To put it into perspective, the exchange facilitates millions of transactions per second. That said, what is binance coin used for?
What is binance coin (BNB) for?
Binance coin serves three main purposes. First and foremost, the cryptocurrency is used to pay transaction fees at Binance. Let’s say you want to trade your Ethereum tokens for Bitcoins. To do so, you will have to pay a transaction fee. If you purchase BNB tokens and use your purchased tokens as a means to pay transaction fees, you will receive a 50% discount.
This is of huge significance when you want to trade large amounts of cryptocurrencies, or if you make several trades on a regular basis. The second use case of BNB is when it comes to offering trading pair flexibility. BNB tokens are very easy to buy and you can easily trade your bought tokens for a variety of other cryptocurrencies through BNB-based trading pairs.
Last but not the least, BNB powers the Binance decentralised exchange (DEX). While you cannot mine BNB tokens, you can earn the cryptocurrency by validating blocks to secure the network. Every three months, Binance uses 20% of its profits to buy back BNB tokens which it then burns, in turn destroying them completely.
Binance will continue to do the same until 50% of the total token supply is burned – 100 million tokens. BNB burning ensures that the supply of the token remains scarce, which renders it more valuable. The cryptocurrency has several other uses in the travel, entertainment and finance industries.
How to buy BNB?
While you can buy BNB tokens at several exchanges like Binance, Crypto.com, FTX, BitForex, HTBC and BitZ, Binance and Crypto.com are the best cryptocurrency exchanges to buy BNB coins.
On Binance, you can directly buy BNB with a credit card or a debit card. You can also buy the cryptocurrency with BTC, ETH, USDT, BUSD or TRY. Once you have found your chosen pairing i.e. BNB/BTC through the Markets tab at the bottom of your app, tap it and then click BUY (assuming that you are making an app purchase).
Here you can choose the price you wish to purchase BNB at and the total amount you wish to spend in the cryptocurrency you have chosen (in this case BTC). All you need to do now is click Buy BNB.
Your order will be submitted. If you choose a market order it will be executed immediately. If you choose a limit order your order will only be executed once the price has been reached.
At Crypto.com, you can buy BNB tokens with a credit card or via a bank transfer. Register at the crypto exchange today to receive a $25 bonus. All you have to do is enter the code TCT50 when you register at Crypto.com.
What is our opinion on binance coin (BNB)?
Binance coin is at the helm of a blockchain-based technological revolution and its intrinsic value lies in powering the world’s largest cryptocurrency exchange. The cryptocurrency has been an investor favourite in 2021, as its value has risen substantially since the start of the year.
As long as Binance is one of the world’s most respected cryptocurrency exchanges, binance coin’s value will hold true. Keep an eye out for the cryptocurrency’s burning periods and platform updates, as that is when its value may shoot up.