Binance Coin is a cryptocurrency that’s used on the Binance exchange, the largest cryptocurrency exchange in the world.
This guide will help you understand Binance Coin and how you can invest in 2021.
What is Binance Coin?
Binance Coin (BNB) is a cryptocurrency that’s used to trade and pay fees on Binance. As of 2021, Binance is the largest cryptocurrency exchange in the world with around 1.4 million transactions going through every second. When holding BNB, users will receive a discount for transaction fees on Binance. It can also be used to exchange the most popular cryptocurrencies including Bitcoin, Ethereum and Dogecoin.
BNB was created in 2017 and worked on the Ethereum blockchain with the token ERC-20. However, Binance soon created its own blockchain that now works with the token. It was launched in 2017 with an initial coin offering for investors, the founding team and the public. The founding team distributed 40% of BNB tokens amongst themselves, 10% amongst investors and 50% amongst the public. In total, Binance raised $15 million through their ICO. This $15 million was reinvested into Binance to improve the crypto exchange. 35% was used to upgrade the Binance platform, 50% was used for branding, marketing and investing. The final 15% was held in reserve to prepare for any unforeseen circumstances.
As of August 2021, Binance is one of the most popular cryptocurrencies in the world. It has a market cap of $65,120,145,243 with 168 million tokens in circulation. It’s reached its maximum supply and diluted market cap. One BNB token costs $406.41 and has reached highs of $675 in 2021. Due to the stability of BNB tokens, they remain extremely popular amongst investors and are used for trading several cryptocurrencies including altcoins.
One of the greatest benefits of BNB is its range of applications. It can be traded with every popular cryptocurrency on most exchanges. It can also be used to buy newer coins in the market and therefore is perfect for investors who want to take on greater risk. Alternatively, with the coin being so popular its value will likely increase over the next few years. This means investors can hold it in their wallets and still make a good return.
Another benefit of BNB is the fact investors can get a discount on Binance. As Binance is the world’s number one crypto exchange, this discount is extremely useful. Most investors already use Binance for their investments so this discount can be applied whenever they make a purchase.
The biggest downside of BNB is that Binance is heavily centralized. Binance aims to make money from the crypto market. They’re not a group of developers who want to liberate the world from banks. According to Etherscan, around 80% of all BNB tokens are now owned by Binance, spread across several wallets.
How does Binance Coin work?
Binance Coin is used to trade and as a discount on the Binance exchange. However, unlike many other leading cryptocurrencies, BNB can be used outside of the Binance exchange.
BNB is increasingly used for payment processing. Merchants online can now offer BNB as a means of payment for customers, which creates greater flexibility in payment methods. One such example is in the travel industry. Many leading hotels and flight companies now accept BNB as payment for reservations and travel arrangements. It can also be used to pay for digital gifts and even buy lottery tickets.
BNB has also been adopted in the finance industry. Several platforms now allow investors to purchase stocks, ETFs and other assets using their BNB. To further this, BNB can also be used as collateral for loans on certain platforms. This wide range of applications has made BNB extremely valuable.
To help manage the value of the BNB token, Binance uses 20% of its profits to buy back and burn BNB, destroying the tokens completely. It does this quarterly and plans to do so until 100 million Binance Coins are destroyed- 50% of the initial supply. This makes coins scarce and thus more valuable for individuals that hold onto them.
How to buy Binance Coin online
The most efficient way to buy BNB is directly through Binance. Sign up or log into your account. If this is your first time using the platform, you’ll be required to validate your account.
Make sure your account is funded. You can use fiat money as well as most leading cryptocurrencies (BTC, ETH).
Search for BNB and select the number of tokens you want to buy. Click “Buy” and check your wallet to ensure the transaction has gone through. Once completed, you will own BNB.
How to trade Binance Coinonline
Much like buying Binance Coin, the best place to trade it is directly through Binance. Once you own BNB you can trade it with over 150 cryptocurrencies on Binance.
Search for the coin you wish to trade it for, then select the number of tokens you want to buy. Click “trade” and your transaction will be complete.
To confirm this, go to your wallet and make sure you now own your new chosen currency.