Binance Coin BNB

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About Binance Coin

About Binance Coin

Binance Coin (BNB) is a cryptocurrency developed by the Binance cryptocurrency exchange.

The digital currency’s name is a combination of ‘Binary’ and ‘Finance’ and was launched in 2017. Initially, it was built on the Ethereum blockchain with the ERC20 token standard. Since then, it has become the native currency of Binance’s blockchain, the Binance Chain, helping users make transactions, in-store payments and investments.

Alongside Bitcoin and Ethereum, BNB has recently seen a sharp rise as the cryptocurrency market as a whole has surged in popularity in the first half of 2021. The Bitcoin and wider digital currency market have more than doubled in value so far during the year, according to new reports.

BNB is proving to be popular with crypto investors as it can be used to fund transactions within the Binance exchange and its wider network. Different utilities on the exchange are supported by BNB including fees around listing, trades and exchanges.

  • Binance Coin was launched in 2017 by Chinese developer, Changpeng Zhao.
  • The cryptocurrency was originally introduced to pay exchange fees, although its use cases are expanding
  • Binance Coin is the third most valuable digital currency in the world after Bitcoin and Ethereum
  • It has a strict limit of only 200 million BNBs to help maintain value.
What is the difference between Binance Coin and Binance?

BNB is a cryptocurrency while Binance is the exchange upon which this currency can be traded.

Binance also supports the exchange of other popular digital currencies including Bitcoin, Ethereum and Litecoin. This list of digital currencies adds up to more than 150 and is continually being expanded.

The Binance exchange has additional benefits in the form of extra features and services it has in place to support this blockchain ecosystem. This includes Binance Labs, an innovation incubator designed to support start-ups and entrepreneurs, and Launchpad, a site aimed at hosting new blockchain projects. It runs monthly new token fundraising events to help these initiatives raise funds. The Binance Smart Chain was also launched in 2020 to enable the creation of smart contracts for tokens on the Binance blockchain.

What are the benefits of BNB?

BNB is one of the fastest-growing cryptocurrencies, recently becoming the world’s third digital currency, after Bitcoin and Ethereum, to hit a market cap of $50 billion. This is after its value rose by nearly a quarter in only a week.

Its appeal is partly the speed at which transactions can take place (1.4 million orders every second), alongside its robust infrastructure and security in the form of a multi-cluster and multi-tier system framework, and Secure Assets Fund for Users (SAFU). Other reasons for this digital currency’s popularity include:

  • Saves money on transactions - BNB offers you a 50% discount on any trading fees.
  • Trade different cryptocurrencies - more than 150 digital currencies can be traded on the exchange using BNB.
  • Spend BNB on different assets - while it is not yet considered a currency, you can use BNB to pay for flights, entertainment and credit card bills.

The coin can be used for IEO investments listed in Binance's Launchpad section. These new currencies will then be listed on the Binance crypto exchange, providing them with an effective trading marketplace.

Binance Coin’s Price history

The coin was launched during an initial coin offering (ICO) back in July 2017.

It offered 10%, or 20 million, BNB tokens to angel investors, 40%, or 80 million, tokens to the founding team, and the remaining 50%, or 100 million, to the various stakeholders and investors in this ICO.

The $15m worth of funds raised by selling BNB tokens was then used for exchange development, branding and marketing. Some of this money was invested in upgrading the Binance exchange while some was allocated as a reserve in case of emergencies or unprecedented circumstances.

What determines the price of the Binance Coin?

As with Bitcoin, Ethereum and other cryptocurrencies, the price of BNB can be volatile as this is a new digital currency which has only been traded since 2017.

However, its market cap and coin burning process will ensure it has some longevity as a digital asset. Covid-19’s impact has also led to an increasing interest in cryptocurrencies from institutional investors looking to shore up their finances during a time of economic uncertainty.

Some partnerships have also helped provide Binance with greater legitimacy among investors.

In 2017, Binance unveiled a new collaboration with Uplive, a video and content streaming platform. With 20 million in its user base, the partnership ensured BNB coins were exposed to a huge potential audience.

Binance has partnerships in place with more than 100 different service providers including leading hospitality, travel and real estate companies. The platform has attracted investment from leading market players, including the likes of Sequoia Capital and Vertex Ventures.

Alongside these relationships, ultimately the platform’s reputation as easy-to-use and secure has significantly boosted its profile.

Binance Coin Price Predictions

Coin burning is a way for a cryptocurrency’s originators to destroy coins, removing them from circulation in a bid to reduce the total supply and maintain a cryptocurrency’s value.

The BNB burning events are scheduled to take place every quarter until 100,000,000 BNB are finally destroyed, a figure accounting for half of the total amount of BNB ever issued. Unlike other cryptocurrencies, such as Bitcoin, all coins are currently in circulation with none left to mine.

Binance has consistently performed quarterly burns, the latest being the 13th quarterly burn on October 17, 2020. The BNB coin burn practice ensures that the supply of Binance Coin is capped and retains its value via scarcity. The next burn is anticipated at some point in April 2021.

Forecasts for the future of Binance are very optimistic, with average valuations predicting it will trade over $300 for much of the year.

Frequently asked questions

Binance Coin (BNB) is a cryptocurrency launched in 2017 on the Ethereum blockchain, based on the ERC20 token standard, and is now traded on the Binance cryptocurrency exchange. Tokens in circulation are used for discounted trading on Binance Exchange, with the discount rate starting at 50% in the first year. It's scheduled to be halved each year with the discount dissolved by the fifth year.

BNB ist the ticker symbol under which Binance Coin is listed, just like AAPL is the ticker for Apple stock.

Binance Coin's price is a market price and defined by supply and demand. The value of Binance Coin is also heavily tied to that of the wider crypto market, and specifically Bitcoin. Any good or bad news concerning the Binance exchange is also likely to influence the fortunes of the cryptocurrency. Having said that, the UK-based Financial Conduct Authority clamping down on the exchange in June 2021 didn’t cause an appreciable downturn in the price of the currency — and so we should be cautious before anticipating change precipitated by real-world events.

Investing in BNB is fairly straightforward. Pick an exchange, create an account, verify your identity and then begin trading. You will also need a digital wallet to keep your cryptocurrency secure.

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