Home Crypto Education Cryptocurrencies Binance Coin: All you need to know

Binance Coin: All you need to know

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Binance coin is a crypto token created by the cryptocurrency exchange platform Binance. The coin is denoted by the symbol BNB. Launched in July 2017, the cryptocurrency initially ran on the Ethereum blockchain until Binance launched its own blockchain – the Binance chain. Binance coin has an overall limit of 200 million tokens.

The Binance Platform

Binance was founded by Changpeng Zhao, also known as CZ by crypto enthusiasts. It’s a global cryptocurrency exchange that’s currently the biggest crypto trading platform, at least by volume.

Users of the platform can use BNB to pay for fees on the Binance platform such as listing fees, exchange fees, trading fees, withdrawing fees, and any other fees. Like any other cryptocurrency, the coin can be traded against other supported cryptocurrencies.

Security Model and Transaction Processing

Binance Chain uses the Tendermint byzantine-fault-tolerant as a consensus protocol. This mechanism uses several types of nodes:

Validator nodes – a selection of the network community who vote to validate transactions

Witness nodes – These nodes witness the consensus mechanism and broadcast transactions to all other nodes  

Accelerator nodes – these nodes speed up the transaction process

Monetary Policy of Binance Coin

BNB’s market cap is at 200 million tokens. At its launch and Initial Coin Offering in 2017, 100 million tokens were released to the public, 80 million to the founding team, and 20 million to angel investors (high-net-worth individuals who provide financing for a startup in exchange for equity in the company).

Binance coin’s first year provided a 50% discount on trades, with the discount reducing by half each following year. The discount will end from the fifth year going forward.

To combat devaluation of the currency, Binance plans to use 20% of its profits to buy back Binance tokens and burn them until only 50% of Binance tokens are remaining in the market. (Coin burning means removing coins from circulation permanently, reducing a coin’s circulation. The burning process is recorded as a transaction on the blockchain, and it’s thus completely transparent)

How is Binance Coin Different from other Cryptocurrencies?

Binance differs from other cryptocurrencies like Bitcoin, Ether, Litecoin, etc. in at least these two ways:

First, It is an integral part and will, in the future, become the native currency of the Binance platform.

And secondly, users of Binance can use the coin to pay for the trading fees of the platform, which is way cheaper than paying the full fees

How to Buy and Store Binance Coin

If you wish to own Binance coins, you can acquire them via a cryptocurrency exchange. Since the Binance platform is a crypto exchange itself, you can get BNB by trading it with over 100 currencies. You can also trade BNB on IDEX, Gate.io, Trade Satoshi, etc. You can also buy it directly from Eidoo, Invest Feed, Kyber Network, etc.

Crypto coins are very soft targets for hackers – so it’s crucial that you safeguard them by securing them in a wallet. Some popular wallets where you could keep your Binance coin are Trust, Trezor, Enjin, Blox, Request, Metal Vault, Jaxx, Ledger, etc.

Uses of Binance Coin

☑️Buying goods and services across various establishments 

Binance coin has enabled various ways of using BNB to pay for products and services in an increasing number of businesses. An example is TravelbyBit, an Australian startup that has unlocked the ability of Binance and many other cryptos to be used by more than 150 establishments.

☑️Paying for trading fees on Binance

Crypto traders can save money by using BNB to cover crypto trading fees in the crypto exchange platform.

☑️Investing in other cryptocurrencies

You can use Binance coins to invest in new and innovative cryptos that are listed on Binance’s token launch program: the Binance Launchpad.

☑️Securing cash when you need it

Binance coins can be used to acquire loans through Nexo – a crypto-based loan platform, or exchange BNB for cash through Dether – a platform that allows people to trade the coin for money.

☑️Paying for certain social media services 

Social media has become an important part of people’s lives all over the world, and BNB is being used for various functions on social networks. For example, the coin can be bought on Investfeed – the crypto social network, or as a gift token on Uplive, a video streaming platform.

☑️Trading as an altcoin

Binance Coin can be traded on several cryptocurrency exchanges, including on the Binance platform. Other exchanges include Komodo, IDEX, kyber.network. 

Should You Invest in Binance Coin?

When deciding whether to buy (and invest) in Binance coin, consider the following facts about the currency:

Binance coin has witnessed unprecedented success and in a short amount of time. In only two years, it has achieved a 2.8 billion market capitalization.

A dedicated and industry-savvy team backs the Binance platform. This team had also enabled the crypto to stave off insecurity issues such as in 2018 when they successfully repelled a malicious attack.

As of October 2019, the price of the coin is $18 – a growth of more than 10,000% since its launch

Its progressive economic model of burning coins should see it continue to increase in demand and token value.

Conclusion

Binance coin has become a force to be reckoned with in the crypto space. Cryptocurrency traders can not only invest in the coin but also use it to duck high fees while trading on the Binance platform. And with the current growth rate of the currency, it is set to increase in value, especially after the launch of its own blockchain. Thus, BNB is a great asset option to add to your portfolio.

 

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