Binance Coin [BNB] decoded: A beginner’s guide
Binance Coin [BNB] is something that you must have heard about, whether you’re just getting started with cryptocurrency or have been in the game for long. It’s one of the highly popular coin offered by a crypto-exchange famous for offering an extensive range of crypto-to-crypto exchange services. Though, this Chinese corporation is fairly new, it has gained a whole lot of popularity thanks to its impressive ICOs and low trading fees.
The Binance Coin [BNB] is the native token of this platform and played a crucial part in funding Binance via an ICO. The BNB token is yet another ERC20 token that runs of the Ethereum blockchain.
In today’s guide, you can learn all that you need to know about the Binance Coin – its history, price prediction, where to buy it, how to store it, features and whether it’s a good investment. Continue reading to know more.
What is Binance? – Overview of the Cryptoexchange
For those who don’t know, Binance is the world’s largest crypto exchange today, with over 1.5 billion USD traded every day on the platform. What’s impressive here is that the platform is yet to complete its first year of operation. It was launched on 14th July 2017.
This means within a year of its launch, the Binance exchange went from an obscure startup to one of the biggest players in the crypto-space, with millions of users registered on it.
Why is Binance better than others?
It’s like other crypto exchanges. You can trade one digital currency for other digital currencies listed on the platform. It helps to match sellers with buyers, using a custom matching engine, at their requested prices. Once the transaction is completed, the Binance platform takes a small charge as a compensation for facilitating the trade.
One of the significant problems faced by crypto exchanges last year was that they couldn’t meet the sheer volume of the transactions. Cryptocurrencies saw a monumental increase in popularity in the last year. This resulted in unprecedented growth in the volume of transactions.
The result – delayed transfers, lost orders, and bad prices. The Binance crypto exchange set to rectify all these issues. It created its own trading machine that could handle up to 1.4 million transactions per second. This is the main reason why several investors and crypto-traders have moved to the Binance exchange.
Apart from the speed, other significant features of this platform are – better liquidity, highly competitive pricing and a vast array of crypto-pairs. Finally, the standout feature is the low trading fees. Binance charges just 0.1% of the transaction amount as a fee. And, what more, you can reduce the transaction fees furthermore by using the platform’s native token – the Binance Coin [BNB].
What is the Binance Coin [BNB]? Everything you Need to Know
The Binance Coin [BNB] is one of the most popular altcoins on the market today. It follows the ERC20 protocol, meaning it works on the Ethereum blockchain and network. Thus, the BNB must follow the rules set down by the Ethereum community and it benefits from the reliability and safety of the Ethereum network.
The Binance Coin Overview
Market price – $14.75
Market Cap – $1,681,721,289
Trading Volume (24h) – $64,118,000
Circulating Supply – 114,041,290 BNB
Total Supply – 194,972,068 BNB
Overall Rank – 17
Unlike BTC, BNB cannot be mined. The Binance coin is more of a token rather than a digital currency. Are you wondering what purpose it serves, if it isn’t a digital currency?
Binance Coin (BNB) – Fueling a New Era of Token Based Exchange Models
Remember that we mentioned above that you have to pay transaction fees for every transaction you do on the Binance Exchange? Instead, of paying the transaction fees as other digital currencies, you can pay for it using Binance Tokens. This makes it extremely useful to traders on the exchange.
Here’s how it Works
If you use the Binance coins [BNB] for your trades on the platform, Binance rebates a portion of the transaction fees for the first five years. The percentage of rebate varies based on the year of trading. For instance, during the first year you get a rebate of 50%, the second year the discount is halved to 25%, the third year it is 12.5%, the fourth year it is 6.75% and the final year the deduction is eliminated.
The Binance exchange calculates the discount automatically based on the BNB coins in your wallet. Additionally, if you don’t want to use BNB to pay for the transaction fees, you can simply choose to ignore this feature.
If you’re wondering what next, this is where a new innovative scenario comes into the scene – the Binance coin burn.
Binance Coin Burn Explained
The founders of Binance exchange have an ingenious solution to prevent the value of the coin from falling. Every quarter, the company takes 20% of the profit collected from transaction fees and uses it to buy [BNB]. These tokens are then destroyed or burnt.
The Binance coin burn has already occurred thrice and the latest burn was completed on 15th April 2018. During this burn 2,220,314 Binance coins were burned. By removing a large number away from circulation, the remaining coins see a massive boost in the value. This practice will be continued until all the initially generated 100 million Binance coins are destroyed.
A look at the price history of [BNB] indicates that the prices of the coin had increased in anticipation of a burn. While it’s true that prices drop after a burn, it doesn’t fall by too much. In fact, Binance [BNB] is one of the best performing digital currencies in 2018. This is an incredible achievement especially when several other cryptocurrencies saw their prices falling massively during this period.
During the January burn, the price of the currency shot up from $3.34 to $21.48. The next BNB burn is scheduled to occur on 15th July 2018.
The Team Behind Binance and [BNB]
Binance is a Chinese firm that was initially started in Shanghai and now migrated to Hong Kong. The founder and CEO of Binance are Changpeng Zhao, popularly known by the moniker “CZ.” He is one of the billionaires in the crypto-space and was the former CTO of OKCoin, another famous Chinese crypto exchange.
Beiji Technology is the company that owns and operates BNB and Binance. Yi He, another co-founder of OKCoin now plays a vital part in the Binance Team. She is quite popular in the crypto-circles for her ability to create crypto-technology that are widely adopted by several users.
How to Buy Binance Coin [BNB]?
If you have any other digital currencies like Bitcoin, Litecoin, Stellar Lumens, Ethereum and others, you can trade it for BNB on the Binance Exchange. If you want to buy digital currencies first, you can convert fiat currency into your preferred digital currency at CoinBase, BitPanda, ZebPay, etc.
Where to store Binance Coin [BNB]?
BNB can be stored in a wallet just like other cryptocurrencies. You can keep it directly in the wallet provided by the Binance exchange or move it to other popular wallets that support Ethereum and ERC20. MyEtherWallet is one of the most popular Ethereum based wallets.
Why should you invest in Binance Coin [BNB] in 2018
The strong Binance team ensures that the coin as well as the exchange are constantly upgraded and made user-friendly. The platform is capable of handling around 1.4 million orders every second.
Convenient and Scalable
The BNB platform offers a decentralized cryptocurrency trading environment and is deployed on more than 30 other exchanges. The platform is highly scalable and supports several languages. What more, the BNB coin is supported on a wide variety of devices from desktops to iOS and Android smartphones.
The platform as well as the token is highly user-friendly, making it an excellent option for first-time crypto traders.
Wide Array of Crypto Trade Pairs
There is an extensive array of cryptocurrencies featured on the Binance platform. Additionally, the exchange offers generous discounts to all traders using the platform.
Binance is one of the most secure crypto-exchanges and has proved to be stable during its period of operation.
It’s true that the performance of the Binance Coin is intricately linked with the performance of the Binance exchange. And, Binance is slowly reducing the generous initial trading discounts offered.
With that said, Binance is coming up with innovative ways to ensure that the value of the currency remains high and the coin burn is an excellent example. All this make Binance one of the most valued and traded cryptocurrencies of 2018.
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