The powerful and popular cryptocurrency exchange Binance has created its own cryptocurrency that functions as an internal gas. Supported by a well-established company, Binance Coin or BNB is here to stay and we explain why.
What is Binance Coin?
- Symbol: BNB
- Release date: 06.27.2017
- Maximum amount: 200 million BNB
Binance Coin is the official cryptocurrency of the crypto exchange Binance, whose name is an acronym composed of the words “binary” and “finance”.
Particularly present in the Chinese and Asian markets, the exchange that gives life and supports Binance Coin, not only supports trading with a large number of cryptocurrencies but also encourages the use of its own token offering discounts for 4 years to users who operate with BNB.
Thus the currency is born basically to support transactions within Binance’s own platform. In this line, the developers of the exchange try to increase the importance of their token through projects related to blockchain that can be financed by the users themselves with Binance Coins. The basic idea is to use the Binance tokens as gas within their own system, as is the case with the Neo cryptocurrency.
Value of Binance Coin
Binance Coin has experienced continuous growth since its inception, ranking among the 10 best-valued cryptocurrencies by its users, and is currently ranked 7 in the digital currency ranking by market capitalization.
Regarding the reasons for its constant upward trend, there is a strong increase in the number of users and investors interested in BNB, especially because it is easy to carry out transactions with this token thanks to its compatibility with different digital systems and currencies.
On the other hand, the fact of having the support and resources of a very powerful crypto exchange that constantly promotes its use makes Binance Coin into something more complex than a simple cryptocurrency.
How is Binance Coin different from Bitcoin?
- Greater number of tokens: Binance Coin has a much higher maximum amount of tokens than other cryptocurrencies, such as Dash or Ethereum Classic, with a total of 200 million BNBs.
- Regarding the speed of transactions, Binance Coin offers a compatible certificate engine, which is capable of processing millions of orders per second. This technology makes it one of the fastest cryptocurrencies when executing coin transactions.
- Greater volume of transactions: the great speed in the transaction process allows, in turn, that the number of these operations is also much higher compared to Bitcoin and other crypts.
- Binance Coin facilitates the buy and sale of other digital currencies within its own platform, tangibly lowering transaction costs.
How does Binance Coin work?
Binance Coin is based on the Ethereum ERC 20 token. It uses Bitcoin’s Blockchain technology and has open-source software made up of a cluster system. Namely, its structure has data support with various allocation units that increase the security of the system on the one hand and accelerate the search for data, on the other hand, thanks to fragmentation (order the memory).
Although its blockchain is open (transactions are completely transparent), the privacy of the sender, receiver, and the transferred amount is also ensured.
The fees for each transaction are paid in digital currency, with reductions of up to 50% during the first 4 years if paid with BNBs. For this, Binance announced to buy back 100 million coins and devalue them to increase the value of the remaining tokens.
Binance Coins can not be mined, they are only obtained through exchanges and/or transactions using other cryptocurrencies. Users with a high volume of transactions regularly receive so-called “Airdrops”, a reward in the form of free coins.
Is Binance Coin a good investment?
Binance is one of those projects that surprised the cryptocurrency community by achieving exponential growth in a short time. In a very short time, Binance has become the largest cryptocurrency exchange per trading volume. Due to its enormous success, the platform has gained great attraction from users and investors.
Binance is backed by a strong and dedicated team. The leadership and development team is made up of people with the relevant skills and experience necessary to drive the project towards success. The team has been able to improve the platform to make it more secure and efficient.
The company and its services have demonstrated their ability to generate high profits on investments. Less than a year ago, in August 2018, the price of BNB was approximately $9, when the cryptocurrency market was in a full bearish phase, representing an increase of more than 8000% over its launch price. Now, with a price of $32.00, the profit for the initial investors is much higher.
In addition, Binance presents a progressive economic model that will allow the destruction of 100 million BNB tokens. The decrease in the total supply of the cryptocurrency should contribute to greater demand and a greater value of the token.
How to buy or get Binance Coin?
As already indicated, BNB tokens can not be obtained through BNB mining, since all tokens were previously mined by Binance at its inception. Investors who wish to own BNB can acquire it by exchanging Binance Coins for other cryptocurrencies such as Bitcoin in a cryptocurrency exchange.
As Binance itself is a crypto exchange, its clients can buy and sell BNB by pairing this digital currency with more than 70 cryptocurrencies. In addition to the Binance exchange, BNB can be traded in Gate.io, IDEX, Trade Satoshi, etc.
The broker and social investment platform eToro also allow to invest and store Binance Coin as a traditional cryptocurrency exchange (previously the user could only trade with CFD on cryptocurrencies), however, at present (May 2019) customers still can not withdraw the digital currency purchased to an online or physical wallet, which greatly limits eToro’s usefulness to invest in these assets.
BNB token storage
Like other cryptocurrency exchanges, Binance also provides a wallet that can be used to store BNB or any other cryptocurrency that is traded in this market. In July 2018, Binance acquired Trust Wallet, a mobile wallet for tokens based on Ethereum. Trust Wallet is now marketed as the official Binance wallet. In addition to the official wallet, BNB can be stored in a portfolio compatible with Ethereum. Some popular options are:
- Ledger Nano S