What exactly is Binance Coin (BNB)?

What exactly is Binance Coin (BNB)?

Binance Coin (BNB) is a cryptocurrency that can be used to trade on the Binance cryptocurrency exchange and pay fees. As of January 2018, the Binance Exchange was the world’s largest cryptocurrency exchange, processing over 1.4 million transactions per second.

As an incentive, Binance Coin users receive a discount on transaction fees on the Binance Exchange. BNB can also be exchanged or traded for other cryptocurrencies like Bitcoin, Ethereum, Litecoin, and others.

 Binance Coin debuted in July 2017 on the Ethereum blockchain as the token ERC-20 before becoming the native currency of Binance’s own blockchain, the Binance Chain.

Binance Coin Applications:

The Binance Coin, like other evolving cryptocurrencies, has several uses outside of the Binance exchange, such as

  • Trading: Depending on the exchange’s restrictions, Binance Coin can be traded for other cryptocurrencies on various exchanges.
  • Binance Exchange transaction fees: BNB can be used to pay for Binance Exchange transactions, and users receive a discount for doing so.
  • Credit card payments: On Binocs, BNB can be used to pay crypto credit card bills.
  • Payment processing: Merchants can accept BNB as payment from customers, giving them more payment options.
  • Booking travel arrangements: On certain websites, BNB can be used to book hotels and flights.
  • Entertainment: BNB serves several functions in the entertainment space, from paying for virtual gifts to purchasing lottery tickets.
  • Investing: Several platforms allow investors to use Binance Coin to invest in stocks, ETFs, and other assets.
  • Loans and transfers: On certain platforms, BNB can be used as collateral for loans. There are also apps that allow users to use Binance Coin to split bills and pay friends and family.

Binance Coin is an Initial Coin Offering (ICO).

Binance Coin debuted in July 2017 with an initial coin offering (ICO). BNB tokens were distributed as part of the ICO to various participants, including angel investors and the Binance founding team. 

Here’s a quick rundown of how BNB tokens were first distributed:

  •     40% of the founding team (80 million BNB)  
  •   10% for angel investors (20 million BNB)
  •    50% for Public Auction (100 million BNB)

During the ICO, all 100 million BNB tokens available for public sale were sold at a price of 15 cents per token. Binance thus raised a total of $15 million in bitcoin and ethereum and now tokens like Poocoin have swapped their way in.

The $15 million raised was divided as follows: 35% was used to upgrade the Binance platform and exchange system; 50% was used for Binance branding, marketing, and education of new innovators; and the remaining 15% was used as a reserve in case of any emergencies or unprecedented circumstances. 

Burning BNB

According to the Binance whitepaper, every quarter, Binance uses 20% of its profits to buy back and burn Binance Coins, completely destroying them. Binance has consistently performed quarterly burns, the most recent of which was on October 17, 2020.

Binance will continue to perform quarterly burns until it buys back and destroys 100 million Binance coins – 50% of the total supply. The practice ensures that Binance Coin’s supply remains limited, making it scarce and valuable.

Binocs is a platform where the value of virtual currencies is entirely determined by supply and demand, as opposed to government-guaranteed money, which can result in large gains or losses for investors like in the case of mexc. Furthermore, when compared to traditional financial instruments such as stocks, bonds, and mutual funds, cryptocurrency investments are far less frequently protected by government oversight.

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