The cryptocurrency issued by the Binance exchange trades under the ticker symbol BNB and is known as Binance Coin. With a volume of $7.6 billion as of Q2 2022, Binance Exchange is the biggest cryptocurrency exchange in the world. Users can trade cryptocurrencies on Binance, it’s an online exchange and its coin is BNB. It supports all of the most widely used cryptocurrencies. For traders to store their digital currency, Binance offers a crypto wallet. Additionally, the exchange offers users supporting services so they can earn interest or conduct cryptocurrency transactions.
In this article, we’re going to explain what is Binance and Binance coin, the benefits of Binance coin, the mining and burning of BnB, and what my thoughts are on it.
What is Binance?
The term Binance is a mix of two terms binary and finance. The Binance exchange is one of the most prominent crypto exchanges in the world, in terms of volume it’s the largest crypto exchange in the world. The native cryptocurrency of the Binance exchange is called Binance Coin (BNB).
The Binance exchange is mostly renowned for trading between cryptocurrency pairs which means that it facilitates the trade of different tokens with each other. It offers trading in more than 150 coins including bitcoin, Ethereum, Ripple, Litecoin, Cardano, and many more. The Binance exchange is enormously popular due to its low transaction costs and its high processing output which has the capacity to process 1.4 million orders per second. Binance offers all the services that are necessary for a conventional cryptocurrency exchange. These include the trading, listing, fundraising, and delisting of cryptocurrencies.
Individuals who are eager to develop their own cryptocurrency can simply raise funding for their business through an ICO or initial coin offering. Furthermore, the use of its local currency BNB also provides several perks like discounts and an even further reduction in transaction fees.
What is Binance coin and how does it work?
The cryptocurrency that comes with the Binance exchange is called Binance Coin BNB. The original aim behind BnB was to provide discounts to the users of the Binance exchange however it has now become a prominent player in the crypto markets and its market value at the time of making this video exceeds 36 billion us dollars. BNB can also be swapped for other cryptos such as Bitcoin, Ethereum, Litecoin, etc. AT its ICO in 2017 about 100 million BNBs were offered about 16 million were raised in this ICO and the funds raised were used for the development marketing and branding of the Binance exchange. Initially, it functioned on the Ethereum blockchain with the erc20 token. However, later on, it became the native token of Binance’s own blockchain for example the Binance chain.
Benefits of Binance coin
There are various and rather substantial advantages to BnB. The most obvious advantage is that you’ll obtain considerable savings on trading expenses, secondly, you’ll be enjoying the added functionality of rapid transactions. Using BnB allows you to have access to Binance’s own matching engine which can support 1.4 million orders per second. Although BnB’s functional capabilities on Binance are fairly considerable it’s also a viable digital asset. It can be used to purchase and offer a variety of goods and services.
The travel and hospitality sectors are where Binance currently has agreements with over 100 service providers.
Binance has also garnered a lot of institutional investors which is a tribute to the success of this initiative. The BnB ICO also attracted various financial institutions which raised considerable sums for the growth of Binance. Leading investors in finance include vertex ventures, Plutus 21, black hole capital, fund city capital, sequoia capital, limitless crypto investments, fundamental labs, and many more. It can also be used to trade with approximately 150 cryptocurrencies on Binance’s exchange. As it was noted earlier Binance as a platform can be utilized to launch ICOs of new tokens. The Binance launch pad is the platform that may be used to host sales of new tokens. BnB can be used here to purchase a stake in the new cryptocurrencies before they’re added to the Binance exchange.
Mining and Burning of BNB
All BNB coins are pre-mined and over 200 million b b have been issued. In July of 2017 BnB coins were awarded to various participants, these included the founding team, angel investors, and a public cell. About 40% was awarded to the founding team which amounted to almost 80 million BnB, Angel investors received 10% and received 20 million BnB. Half of the tokens were sold to the public for 15 cents each for a total of 100 million BnB. This allowed Binance to raise roughly 15 million which was utilized to construct and expand its platform.
A unique aspect of BnB which is highlighted in its white paper is that of BnB burning. According to the Binance white paper, Binance will use 20% of its earnings each quarter to buy back and burn BnB. This creates a scarcity in the supply of BnB, therefore, raising its value. Binance will continue to make quarterly burns until the total supply of BnB reaches 100 million.
Where can you buy BnB?
You can purchase BnB using the Okex exchange in the same way that you can any other cryptocurrency you can either place a market buy or a limit buy. With a limit buy, you choose the price you are willing to pay, and when the token price reaches your limit price, your order is filled. You can place a market order, agreeing to pay at the current rate, and almost immediately your order is fulfilled if you want to get your hands on the token sooner. You can purchase Binance coins by going to Okex or Binance if you’re interested.
What are my thoughts one of the primary concerns surrounding BnB is that the tantalizing discounts that can be acquired when using it won’t last very long? The goal was to have a 50% discount in the first year 25% in the second 12.5% in the third 6.25% in the fourth and finally, the discounted trading and transaction costs would terminate in the fifth year. Since BnB was launched in 2017 consequently the reductions will end in 2022. There is also the question of privacy and anonymity. Binance complies with KYC or knows your customer and anti-money laundering or AML requirements.
Basically what this implies is that you’ll have to disclose your personal information to build an account on Binance because you can’t utilize BnB on Binance without having an account. Therefore any digital transaction that you do with BnB can be traced and tracked by Binance. There is also the issue of BnB being limited to the Binance exchange, therefore it becomes almost impossible for it to have a solo flight of its own. The fate of BnB thus becomes inextricably intertwined with that of Binance and any good or bad effect on its reputation will undoubtedly influence BnB.
Related: Why Decentralized Exchanges are the future of crypto trading?
Another problem that BnB has to bear is that it’s now on the Binance chain having initially been established on the Ethereum blockchain. The difficulty with the Binance chain is that it doesn’t have the functionality of smart contracts, therefore BnB cannot currently reap the tremendous potential benefits of Dapps. As usual, I hope you learned a lot from this article. Leave a comment below to let us know what you think about Binance, the most well-known cryptocurrency exchange in the world.