What Is Binance Coin and How to Buy It?
By SwapSpace on The Capital
What is Binance Coin
Many modern cryptocurrencies were born out of great technical or philosophical debates within the crypto community, or with the idea to pursue a big goal, but this was not the case with Binance Coin (or BNB). Binance created its own cryptocurrency with the intention of promoting its projects while providing benefits to BNB holders. Binance Coin was not born with its own Blockchain, but as an ERC-20 token, inserted within the Ethereum chain. The Shanghai-based company, founded by Changpeng Zhao in August 2017, generated an initial offer of 200 million BNB, which has been further reduced due to the cryptocurrency’s unique burning process. The company has later moved to Hong Kong and made its platform the world’s largest exchange. Binance Coin currently holds a place in the top 10 cryptocurrencies by market capitalization.
How it works
The central objective of Binance Coin is to be an intermediary currency in financial operations with other crypto assets. Thus, BNB would be a competition for Tether, the stablecoin currently used as the basis for most transactions on the world’s exchanges.
Binance Coin has a certain maximum offer, that is, it is not possible to issue more than a certain number of BNB coins. In its particular case, this max supply is established at 200 million BNB. However, due to the ‘coin burns’ carried out by Binance, this number is now lower and equivalent to approximately 187 million BNB. This cryptocurrency cannot be mined and instead uses a form of benefits for its holders. Thus, it works with a philosophy similar to the proof of participation.
One of the benefits is the discount system offered by BNB. Its volume depends on the time when you have obtained your BNB. In the first year, you would get a 50% discount. In the following years, the discount would decrease to 25%; 12.5% and 6.5%. A specific amount of cryptocurrency is purchased by the platform each quarter and is electronically destroyed until 50% of the total supply is purchased. This can contribute to increasing the price, as the supply of coins will be reduced greatly.
Advantages and disadvantages of Binance Coin
+ The team behind Binance Coin is made up of a group of professionals with verifiable public profiles. Changpeng Zhao is one of the most respected characters in the industry for driving the exchange from scratch; and its technical director, Roger Wang, has more than 10 years of experience in the financial industry.
+ Binance is one of the fastest-growing platforms in the industry and this is directly reflected in its cryptocurrency. It is also the perfect instrument to save yourself some money, which will be much more significant if you are an active trader on the platform. This way, it becomes a good investment both in the short and long term.
+ Serving as a support for transactions with other cryptocurrencies, BNB has earned a place among cryptocurrency investors. As for 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 it comes to executing coin exchanges.
– Apart from the Binance ecosystem, the BNB coin is not much of a use. As the project of Binance, its value is greatly affected by any situation that occurs with Binance, positive or negative. It could also be limited by the regulations of the Chinese authorities, which are extremely rigid.
– You cannot mine Binance Coins, they are only obtained through exchanges and/or negotiations with other cryptocurrencies.
– Due to the cryptocurrency’s peculiarities, profits on the exchange decrease over time.
How to buy Binance Coin
Since it can’t be mined, the easiest way to get BNB coins is through Binance itself. Obviously, the platform is the main source to buy, use and make trading with this digital currency. Due to the popularity of Binance’s currency, other exchange platforms have begun to incorporate it into their portfolios. These are the highest-volume exchanges to buy Binance Coin: Binance, P2PB2B, LBank, Exrates, HitBTC.
How to store Binance Coin
BNB cryptocurrencies can be stored in the integrated wallets on any of the exchange platforms mentioned above. Binance Coin also has great compatibility, as shown on its official website. You can store your BNB in wallets like Trust Wallet, Jaxx, Bread, Clay or Coinomi. If you want to take an extra step in security, you can purchase a hardware wallet, like Ledger or Trezor.
Passionate about crypto and want to get more news on a weekly basis? Join SwapSpace’s blog! News, price predictions, crypto market explained in one place.