Quick Facts

Approximate Market Cap$74,752,239,209
Year Established2017
FounderChangpeng Zhao
Symbol/AbbreviationBNB
UtilityStore of Value

Binance Exchange is a major cryptocurrency exchange launched in 2017 in Hong Kong. It focuses heavily on altcoin trading. The term “Binance” comes from the words “bitcoin” and “financial.” It claims to have strong security requirements. 

In July 2017, Binance held an ICO to establish its own cryptocurrency. As a result, Binance Coin (BNB) became the decentralized Binance exchange’s native currency.

What is Binance Coin – Definition

Binance Coin (BNB) is a cryptocurrency. It represents a utility token created by the Binance exchange. It trades under the symbol BNB.

BNB is mainly used for trading and paying fees on the Binance exchange. Therefore, its users enjoy a reduction in transaction costs on the Binance Exchange as an incentive.

The Binance Smart Chain is what distinguishes BNB from other exchanging tokens. It has a programmable environment, similar to Ethereum. It can execute smart contracts and operate as a framework for other apps. 

Binance introduced the Binance Smart Chain (BSC) in September 2020. It is a blockchain platform that operates concurrently with the Binance Chain. This implies that BNB is now available in three varieties:

  • Binance Chain – BNB BEP-2;
  • Binance Smart Chain – BNB BEP-20;
  • Ethereum network – BNB ERC-20 token.

Mining BNB coins via PoW or PoS protocols is not possible. Throughout the ICO, all of the coins were pre-mined and issued.

Pros and Cons

Pros

  • Fast platform
  • Widely used
  • Secure

Cons

  • Tough competition
  • Centralized
  • Targeted by cyber attackers

The History 

Binance coin was first introduced in 2017. It was initially brought to the crypto market through an ICO. BNB tokens were primarily divided among angel investors and the Binance founding team.

BNB was first launched on Ethereum as an ERC-20 token. Yet, it has subsequently moved to Binance Chain. It now serves as the platform’s native token and supports the recently debuted Binance Smart Chain.

Binance Chain and Binance Smart Chain have both proven to be popular among developers and users. Furthermore, BNB’s popularity has increased as the ecosystem has developed with decentralized apps and use cases.

How Binance Coin Works

BNB was initially designed on the Ethereum blockchain and the ERC 20 standard. However, BNB now uses its own blockchain, the Binance blockchain. 

Tokens in circulation are usually used for trading at a discount on the Binance Exchange. The discount rate began at 50% in the first year, but it is expected to be lowered in half every year after that.

By the fifth year, there should be no devaluation affecting the token’s value. Binance has started purchasing back to restrict supply in response to value depreciation. The cryptocurrency exchange intends to demonetize half of the already circulating tokens.

The BNB has a multitude of uses outside of the Binance exchange, including:

  • Trading;
  • Credit card payments;
  • Payment processing;
  • Booking travel arrangements;
  • Entertainment;
  • Investment;
  • Loans and transfers.

Advantages & Disadvantages 

Advantages

Fast

The corresponding system on BNB’s platform can accommodate up to 1.4 million orders per second.

Secure

To keep the funds safe, the BNB’s exchange employs a non-linear and multi-tier system structure. It also uses the Secure Assets Fund for Users (SAFU).

Wide usage case

BNB is recognized by a wide range of service providers, particularly those in the travel and hospitality industries.

Disadvantages

Market competition

Ethereum and Cardano still have the most advanced smart contracts on the market.

Centralized

The exchange owns 80% of the tokens, making it very centralized.

Binance Coin in the Global Crypto Market

BNB is the third most valuable cryptocurrency by market cap. From paying Binance trading fees to transferring tokens via BSC, the number of BNB transactions is steadily increasing. The rise of BNB as a utility coin has grown into something far more significant. 

BNB’s price has been very steady, particularly in the short term. This implies that it may not be the ideal short-term investment generator. Yet, it has greater potential in the long run.

Every three months, Binance uses 20% of its total revenues to destroy BNB permanently. The most recent Binance Coin burning occurred in April 2021, when the platform burned 1,099,888 of its tokens from its capital. Binance tokens currently have a total quantity of 168,137,036 coins.

FAQ

Is BNB real money?

The primary goal of BNB is to drive cryptocurrency trading activities. In addition, it can be used to pay for tourism and leisure services, but its adoption as a legitimate currency has been limited thus far.

Is BNB anonymous?

Because BNB is mainly utilized within the Binance ecosystem, users must have a verified account on the exchange to use it. Binance ensures compliance by Anti Money Laundering (AML) rules.

Does BNB have its own wallet?

Trust Wallet is the official wallet for holding BNB currencies. Users can, however, utilize a variety of different wallets.