The rapid growth of the cryptocurrency landscape has paved the way for the creation of numerous projects and assets aimed at different purposes. Among several crypto exchanges, each exchange differs in construction and features, aiming to provide a different user experience for traders. The cryptocurrency exchange could generate its own assets for particular applications on its partner exchange. Binance Coin (BNB) is one such asset issued by Binance, a well-known cryptocurrency exchange. Since its inception in 2017, Binance has grown to become one of the leading crypto exchanges in the blockchain sector.
In this article, we will explore the details of Binance Coin (BNB) and its working mechanism.
What is Binance Coin (BNB)?
Binance Coin (BNB) is the native cryptocurrency of the world’s largest cryptocurrency exchange, Binance. BNB was created in order to make trading on Binance easier.
Binance Coin (BNB) was originally established as an ERC-20 token on the Ethereum network. Eventually, however, the coin moved to its own blockchain, and the total number of BNB coins was established at 200,000,000. However, the continuous burning of BNB reduced the supply eventually, helping to maintain the stability of the coin.
Key Features of Binance Coin (BNB)
Native token: The native token of Binance is BNB which is mainly developed for use on the Binance crypto exchange.
Transaction fees: Whoever holds the BNB can use the coins to pay fees for trading on Binance. It helps to reduce trading activity and transaction costs.
Buyback and Burn Policy: Binance states that it will use 20% of its profits yearly to buy more BNBs and then destroy them. This strategy will reduce the overall supply but may increase BNB’s value.
Diverse application: Binance offers several benefits like offers and discounts on the platform for BNB holders. Many merchants and platforms accept BNB as a mode of payment.
Growing support: Binance is evolving as a cryptocurrency exchange, which contributes to the growth and value of BNB.
How Does Binance Coin Work?
Like other cryptocurrencies on the market, Binance Coin (BNB) fluctuates in value as users and traders use and exchange it. You can purchase BNB, store it in compatible wallets, and transfer the coin to others as payments. Binance Coin (BNB) can be bought through many crypto exchanges other than Binance.
BNB is a governance token that leverages smart contracts to govern the trading, issuance, and movement of tokens, ensuring the safety and transparency of every transaction. The coin runs on the Binance Chain that is developed for quick and efficient transactions. By using the Delegated Proof of Stake (DPoS) consensus process, the network can operate more quickly and effectively.
Applications of Binance Coin
Binance Coin has several applications.
- It can be used to trade digital currency pairs on Binance DEX, a decentralized exchange that runs on the Binance Chain. This makes BNB a major player in the crypto trading environment.
- BNB supports the staking of cryptocurrencies, where holders can lock up their tokens and collect rewards by participating in network security.
- Binance Coin allows users to access several financial services, such as loans and insurance coverage.
- BNB can be used for funding projects via Initial Coin Offerings (ICOs) and many other crowdfunding projects.
- Users can receive several savings while paying their trading costs by using BNB within the Binance ecosystem.
Advantages and Disadvantages of Binance Coin
There are many advantages and disadvantages for Binance Coin (BNB).
| Advantages | Disadvantages |
| Low trading fees and discounts on them | Dependent on the performance of the parent company, Binance |
| Can be used to stake crypto | Diverse financial services, such as insurance |
| Diverse financial services such as insurance | The platform has competition in the industry |
| The platform supports crowdfunding | |
| BNB is developed by Binance, one of the largest crypto exchanges in the world |
How to Invest in BNB?
You can purchase BNB through Binance. Since Binance developed the Binance Coin (BNB) they offered many options to purchase it.
Create an Account on Binance
Binance is a centralized crypto exchange where you can purchase BNB and several other cryptocurrencies. To use this platform, you have to create an account with Binance. Download the app or use the website to register using your email and mobile number.
Buy BNB
Click on the ‘Buy’ option to purchase BNB. You can use several payment methods to purchase BNB, including credit/debit cards, Google Pay, or P2P trading. Just follow the provided instructions.
Check the Payment Details and Fees
Enter the desired amount of BNB after selecting your preferred payment option. Once you complete the transaction, BNB will be transferred to your wallet.
Store your BNB in Binance
You can either keep your BNB in your own crypto wallet or in your Binance wallet. Staking your Binance Coin allows you to earn passive income.
Conclusion
Binance Coin is more than just a cryptocurrency, it is a versatile utility token that enhances the user experience on the Binance exchange while contributing to the broader blockchain ecosystem. Its continuous evolution through technological advancements and strategic supply management positions it as a significant player in the cryptocurrency market. You can purchase BNB through Binance or any other cryptocurrency exchange that supports BNB.