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Binance Coin (BNB)
Binance is one of the world’s largest cryptocurrency trading platforms. Yet, despite its immense popularity, most people need to learn more about its in-house digital currency, known as Binance Coin (BNB).
BNB is a utility token originally created to pay transaction fees on the BNB platform. However, it has since gone beyond that and has become a valuable asset in its own right.
In this article, we’ll look in-depth at BNB: how it works, what sets it apart from other cryptocurrencies, and why you should consider adding it to your portfolio.
What is Binance Coin (BNB)?
Binance Coin (BNB) is a cryptocurrency created by the crypto marketplace Binance. Binance is currently one of the largest crypto exchanges in the world, with users trading a wide variety of cryptocurrencies.
Originally created as an ERC-20 token on the Ethereum blockchain, BNB has recently moved to its own blockchain, the BNB Chain. Within the Binance ecosystem, BNB is primarily used as a digital asset that offers consumers several advantages and discounts when they trade on the Binance exchange.
Some benefits of using BNB on Binance include reduced transaction fees, access to exclusive events and services, and the ability to participate in Binance Launchpad, a platform for token sales and initial coin offerings (ICOs). In addition, BNB is used to pay for fees on Binance Smart Chain, a Binance DEX (decentralized exchange) built on the BNB Chain.
Binance also has the BNB Pioneer Burn Program, where a portion of the BNB supply is destroyed to increase the value of the remaining tokens. This helps to reduce the overall supply amount of BNB, making it a deflationary asset.
How does Binance Coin work?
Binance Coin is a digital asset that can be used to spend for trading fees on the Binance cryptocurrency exchange, as well as other services provided by Binance.
Here is a brief overview of how it works:
- BNB is built on the Ethereum blockchain and uses the ERC-20 standard.
- BNB is designed to be a deflationary token, meaning that the total supply of Binance coins decreases over time through a process called “BNB burning.”
- BNB can be used to spend trading costs on the Binance exchange. When used for this purpose, it offers a discount on trading costs.
- BNB can also be used to spend for other services on Binance, such as withdrawal fees, listing fees, and other fees.
- BNB periodically uses a portion of its profits to buy back BNB and then “burn” (i.e., destroy) those coins, reducing the total supply of BNB. This is done to increase the value of each remaining BNB.
- BNB has also created Binance Smart Chain, a Binance blockchain separate from Ethereum. BNB Smart Chain can also be used on this blockchain.
Binance Smart Chain
Binance Smart Chain (BSC) is a blockchain platform created by Binance that provides an alternative to Ethereum with lower fees and faster transaction times. BSC is compatible with Ethereum-based applications and uses a consensus mechanism called Proof of Staked Authority (PoSA). BSC has gained popularity among developers due to its low fees, high throughput, and resources provided by Binance.
What are the benefits of a BNB?
Here are some benefits:
- Discounted trading fees: When using BNB as payment, Binance gives its users a discount on trading fees. It starts at 25%, and the discount gradually declines over time.
- Exchange services: BNB can be used to spend various services on the Binance exchange, including listing fees for new cryptocurrencies.
- Decentralized finance (DeFi): Binance has a DeFi platform called Binance Smart Chain that accepts BNB as payment. Users can use lower fees while participating in DeFi activities like yield farming and liquidity provision.
- Staking: BNB can be staked, which means holding BNB in a wallet to earn rewards in the form of additional BNB.
- Utility: BNB is quite useful for users who trade on the platform since it is the native coin of the Binance trading platform.
- Investment: BNB can be used as an investment, just like any other cryptocurrency, with the possibility of capital gains as the coin’s value rises over time. However, investment in BNB (or any cryptocurrency) bears a major risk, as the cryptocurrency market may be extremely volatile.
Where to buy or sell BNB?
Binance Coin (BNB) can be bought or sold on several crypto marketplaces, including Binance (the platform BNB was originally created). Some other popular exchanges where you can buy or sell includes:
- P2B
- MEXC Global
- BTCEX
- DigiFinex
- Nominex
- BingX
To buy or sell BNB on any of these exchanges, you must create an account and go through the verification process (which typically involves providing personal information and a government-issued ID). Once you have completed the verification process and funded your account, you can place buy or sell orders for BNB at the current market price or a specific price you choose. It’s important to remember that cryptocurrency prices can be highly volatile, so it’s important to do your own research and only invest what you can afford to lose.
How can BNB be mined?
Binance Coin (BNB) is a cryptocurrency issued by the Binance exchange. It is used for various purposes, such as paying trading costs, participating in token sales, and purchasing goods and services. BNB uses the Proof of Stake (PoS) consensus algorithm, meaning it can be mined using staking.
Here are the general steps to mine it:
- Get a Binance Coin wallet: You must keep your BNB in a wallet. Any wallet that supports BNB may be used, including the Chrome and Firefox extensions for the Binance Chain Wallet and the Binance Chain Wallet.
- Purchase BNB: To participate in staking, you must possess some BNB. You can buy it on a cryptocurrency exchange like Binance or other websites that accept BNB.
- Choose a staking pool: Joining a staking pool is an option for you to stake your BNB. People who pool their resources to boost their chances of winning are in a stake pool. You can select from various staking pools depending on the prizes, costs, and other factors.
- Deposit your Binance Coin: Once you have purchased BNB, deposit it into your wallet and transfer it to the staking pool. The staking pool will provide you with a unique address to send your BNB.
- Wait for rewards: You will begin receiving rewards based on your stake once you have deposited your BNB into the staking pool. Your benefits will increase as you stake more BNB.
It’s crucial to remember that staking entails risks, including the potential loss of your stake. Therefore before engaging, you should learn about and comprehend the dangers. Additionally, the staking process can differ based on the particular staking pool you choose to join. Therefore it’s critical to properly study their instructions and standards.
How does BNB compare against its competitors?
BNB is primarily a utility token for discounted transaction fees on the Binance exchange. Still, it also has other use cases, such as participating in token sales on Binance Launchpad, paying for travel accommodations on TravelbyBit, and accessing other services within the Binance ecosystem.
In terms of how BNB compares against its competitors, it depends on what you’re comparing it to. Here are some potential comparisons:
- BNB vs. other utility tokens: BNB is one of the most extensively utilized tokens. BNB is also one of the biggest participants in the world of crypto marketplaces. Though other exchanges have their own tokens (like Huobi’s HT or OKEx’s OKB), Binance has excelled in building a sizable ecosystem of services that use Binance coins.
- BNB vs. other exchange tokens: Other cryptocurrency exchanges abound, some of which have native tokens. Like BitMax’s BTMX, KuCoin’s KCS, and FTX’s FTT. BNB has generally performed better in terms of market capitalization, trading volume, and adoption when compared to these other exchange tokens.
- BNB vs. other cryptocurrencies: If we widen the scope beyond exchange tokens and look at other cryptocurrencies, BNB is still a relatively strong contender. As of early 2023, BNB is also among the top 10 cryptocurrencies by market capitalization. It has a large and active community of users.
Binance Coin History
The cryptocurrency trading platform Binance introduced the digital asset Binance Coin (BNB) in 2017. Changpeng Zhao launched Binance, which rose to prominence as one of the biggest cryptocurrency exchanges in the world based on trading volume. BNB was launched by Binance to provide its users with lower exchange fees and to encourage them to use the platform.
BNB is an ERC-20 token because it was produced as an Ethereum blockchain token. Binance raised $15 million in the Initial Coin Offering (ICO), which took place in July 2017. As a result, 100 million BNB tokens were created, and the price of Binance coin during the ICO at $0.10.
BNB was initially intended to be used on the Binance platform as a virtual asset enabling users to pay fees at a reduced rate. However, BNB can now be used for various things, including paying for vacation reservations, making purchases on e-commerce websites, and more, thanks to Binance’s expansion of its use cases.
Binance has launched a new blockchain, the BNB Chain, and transferred BNB from the Ethereum network to it. This action increased Binance’s business operations’ efficiency and scalability and gave BNB users more services.
BNB has grown in popularity and market capitalization, reaching an all-time high of over $690 in May 2021. As of early 2023, BNB remains one of the top cryptocurrencies by market cap and is used widely on the Binance platform and beyond.
BNB Price Statistics
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