What is Binance Coin?
Binance Coin is the native token for the Binance Cryptocurrency Exchange that trades under the “BNB” symbol. BNB was created on the Ethereum blockchain and it is an ERC-20 standard that has a maximum supply of 200 million BNB.
Key Features and Takeaways of Binance Coin
The key features and takeaways of Binance and BNB are:
- Binance Coin is one of the top 30 digital assets in the world with a market capitalization of over $56 billion.
- Binance is one of the top-rated exchanges that match buyers as well as sellers. Binance is well-known for its liquidity that ensures that orders are executed fast and at the best possible prices.
- BNB is an ERC-20 token that was developed on the Ethereum network, and it can be used to pay fees while users operate on the Binance exchange.
- When users use BNB to pay their trading fees, the fees are discounted by 50% during the first year of membership, with fee discounts that will progressively decrease as users’ membership continues.
- BNB can also be used to invest in start-ups and Initial Coin Offerings (ICOs) that are listed on the Launchpad programme with Binance.
- BNB has the support of several strategic partnerships that have helped significantly to spread its usability and benefits.
- The Binance exchange features a repurchase plan where 20% of profits can be used to buy back BNB tokens.
- To date, Binance Coin has experienced 7 burns during which the 200 million maximum supply was reduced by 5.8% or 11.7 million BNB.
Binance Coin Mining
Binance Coin was initially started on the Ethereum blockchain as an ERC-20 token which was then launched on the Binance Chain. Binance Coin (BNB) is not a mining-based token because of the Byzantine Fault Tolerance (BFT) consensus method that is used on the Binance blockchain.
The only coins that are minable are those that use a Proof of Work (PoW) consensus mechanism such as Bitcoin. However, users can still participate on the Binance network when they become a validator, which is like the mining process.
BFT is a consensus method that aims to solve several challenges faced by many blockchains that make use of PoW. Binance constructed its blockchain on this unique technology in which transactions are verified, and blocks are added to the blockchain.
There are only a few trusted members of the Binance community that are validators currently. However, there are new and innovative ways being explored to expand on this so that the idea of decentralisation in the chain can be increased.
Once this is achieved, the decentralised governance procedure will be introduced and executed, allowing other qualified organisations and individuals to become validators.
Pros and Cons
|BNB is one of the top cryptos after Bitcoin||Discounts decrease over time|
|BNB uses a unique burn-down policy to destroy coins||Regulations could affect how BNB is held and handled|
|BNB can act as a discount coupon on the Binance platform||BNB is limited for use on the Binance exchange|
|Binance is reputable, safe, and popular amongst traders and investors||Binance is a target for hacking attempts|
|Binance has fast transaction speeds and low transaction fees||Binance’s blockchain does not support smart contracts|
|Type of Fee||Information|
|Withdrawal Fees||0.11 BNB|
Should you buy Binance Coin?
Yes, Binance coin is a very promising investment. However, many investors are dissuaded by the supply, the burning process, and the fact that BNB is only a utility token to the Binance exchange.
Despite these factors, benefits that BNB investment can bring include:
- It is an incentive for Binance users
- Users can have a stake in Binance Chain, the proprietary blockchain technology of a reputable exchange.
- BNB can be a store of value
How to buy Binance Coin (BNB)
Step 1 – Open an account on Binance
Navigate to the official Binance website and select “Register Now”. You will be redirected to a “Create a Free Account” where you can either register with your email address or your mobile number.
You can enter your email address and user-selected password or select the “Mobile” option at the top of the form. Select your country code and enter your mobile number along with your user-selected password.
Once you have completed the necessary fields, you can read and accept the Terms of Service before selecting “Create an Account”.
You may have to complete a Security Verification that will confirm that you are not a robot. Next, there is account verification. During this, a 6-digit verification code is sent to the email address or mobile number that you provided. The code is only valid for 30 minutes and must be entered in the blocks provided on this page.
Once the verification is completed, a welcome page will load, and you will be given the options through which you can either trade or purchase cryptocurrency. If you are new to crypto, you can visit the “Learn More” section at the bottom of the page.
Step 2 – Secure account with two-factor verification
On the trader’s dashboard, select the option to secure your account with two-factor verification. Even though phone verification is a secure option, the most preferred and secured method is to make use of the Google Authenticator.
Once downloaded and installed, either scan the QR code or type in the one-time, unique code provided to add your Binance account credentials onto Google Authenticator.
Once completed, write down the backup key provided to recover your account on Google Authenticator in case you lose or misplace it. In the final step, enter the 6-digit code which you will receive on your registered email address along with the Google verification code.
Step 3 – Deposit funds
Binance allows for the purchase of cryptocurrencies via fiat deposits as well as cryptos. Deposits can be accessed from the following locations:
- The “Welcome to Binance” banner.
- Hovering over “Buy Crypto” at the top of the web page and selecting your preferred method.
- Select “Deposit” on the “balance details” section on your trader’s dashboard.
Once you have selected the option to “Deposit”, you can select whether you wish to deposit cryptocurrencies from another wallet, or whether you want to make a fiat deposit.
For Crypto deposits, follow these steps:
- Select your coin between Bitcoin, Ethereum, TetherUS, BNB, or EOS.
- Select the network to be used between BEP2, BEP20 (BSC), ERC20, or TRC20 and accept the conditions for using the network.
- Copy the address or scan the address QR code from the wallet where you are depositing and follow further prompts. Kindly note that each network has its own set of network confirmations between 1 up to 15 confirmations before the deposit will be done.
For deposits in Fiat currencies, follow these steps:
- Select the deposit currency from the dropdown list. To gain access to more currencies, it is necessary to verify your identity and face.
- Select the payment method to be used, depending on the currency chosen.
- Enter the deposit amount and any other details. Kindly note that the transaction fee will be displayed along with the balance after this is subtracted.
- Continue with the deposit.
Step 4 – Start Trading
Once you have completed your deposit, you can navigate to the “Markets” section at the top of the page to view the available cryptocurrencies. From here, you can buy, sell, and trade currencies at competitive prices.
When was Binance Coin first launched?
Binance coin was created in 2017 by Binance to fund the launch.
Who founded Binance Coin?
Binance itself was founded by Changpeng Zhao who is a developer who previously created high-frequency trading software.
What is an “ICO”?
It is an Initial Coin Offering that, unlike an IPO, does not mean that those who invest in the cryptocurrency will have an ownership stake of the company that they provide funds to.
When was Binance Coin’s ICO and how much did it raise?
Binance Coin’s ICO took place in July 2017 and all 100 million BNBs were sold during the ICO.
Is Binance Coin legit?
Yes, as the native token of the Binance cryptocurrency exchange trading platform, Binance Coin is legit.
What is Binance Coin’s total supply?
There is exactly 200 million BNB created without the possibility of this amount ever increasing.
What is the purpose of Binance Coin?
Binance Coin was created to fuel Binance’s operations and its ecosystem. It supports several utilities on the Binance ecosystem including payment for trading fees, exchange fees, listing fees, and numerous other fees on the Binance Exchange.
On which blockchain is Binance Coin based?
Binance Coin was an ERC20 coin based on the Ethereum blockchain, however, Binance now has its blockchain.
Does Binance Coin work with smart contracts?
No. As a result of the BFT consensus mechanism, the Binance Chain does not support smart contracts.
Does Binance Coin have the potential to become more valuable?
Yes, with supply diminishing, the demand for BNB is set to increase, pushing the value up. Another factor that is increasing its value is the number of Binance users that is increasing rapidly with widespread crypto adoption.