Binance Coin, or BNB, was initially created on the Ethereum blockchain before moving to its own blockchain, Binance Chain. BNB is used to pay for transaction fees on the Binance platform and supports a number of other functions in the Binance ecosystem, including participation in new token offerings via Binance Launchpad.
About Binance Coin (BNB)
Founded in 2017, Binance Coin, commonly known as BNB, is a cryptocurrency created by one of the world’s largest crypto exchanges, Binance. They developed BNB on the Ethereum platform, and since then, this currency has grown and evolved to become more than just the native token of an exchange.
BNB was initially an ERC-20 token running on the Ethereum blockchain. However, in April 2019, Binance moved BNB to its own blockchain, known as Binance Chain. The coin was created with a limit of only 200 million coins, and Binance itself has committed to buy back and burn some of these coins to maintain their value and rarity.
Binance Coin (BNB) Utility
When talking about utility, BNB has not just one, but several functions that make it unique. Its primary function, of course, is as a currency on the Binance platform. You can use BNB to pay transaction fees, which include trading fees, withdrawal fees, and more. Interestingly, you get a discount when paying these fees with BNB.
However, the utility of BNB extends beyond the Binance platform. BNB is also used in the broader Binance ecosystem, including Binance Chain, Binance Smart Chain (BSC), and Binance DEX. On Binance Chain and BSC, BNB is used to pay for gas fees. On Binance DEX, BNB is used as one of the trading pairs.
BNB has also gained a lot of adoption outside the Binance ecosystem. Many other platforms and services have begun accepting BNB as a payment method. For example, you can use BNB to purchase goods and services from companies that accept BNB, or even to participate in Initial Coin Offerings (ICO) that partner with Binance.
How Binance Coin (BNB) Works?
BNB operates on Binance Chain, a blockchain specifically designed to facilitate fast and efficient trading. This blockchain allows users to send and receive BNB, as well as other tokens created on Binance Chain.
Binance Chain relies on the Byzantine Fault Tolerance (BFT) consensus, a mechanism that allows the network to reach agreement even if some network nodes may not be trustworthy or malfunctioning. BFT is a very reliable and secure mechanism, and it’s used by a large number of other blockchains.
Overall, the operation of BNB is very similar to other cryptocurrencies. However, there is one feature that sets it apart: coin burning. As previously mentioned, Binance has committed to periodically buying back and burning BNB.
This process takes place every quarter and continues until 50% of the total BNB (100 million coins) is burned. This is Binance’s way of maintaining the rarity and value of BNB.
To better understand the technicalities of BNB, here are its key points:
- BNB uses its own blockchain, Binance Chain.
- This coin uses BFT consensus.
- Binance periodically buys back and burns BNB.
- There is a limit on the number of coins.
That’s a complete picture of Binance Coin (BNB). With so many utilities and unique features, it’s no wonder that BNB has become one of the leading cryptocurrencies in the world.
Unique Aspects of Binance Coin (BNB)
BNB has a number of intriguing unique features that set it apart from other cryptocurrencies. First and foremost, BNB is one of the few coins that have successfully transcended their status as exchange tokens to become cryptocurrencies with broad utility.
Another unique feature is its coin burning program. Every quarter, Binance uses 20% of their profits to buy back and burn BNB. This process is carried out to maintain the rarity and value of BNB. This is a unique and rare step in the world of cryptocurrencies.
In addition, BNB has integrated blockchain technology into their business model. Binance Chain and Binance Smart Chain (BSC) have facilitated the creation and trading of various other tokens, making BNB a key pillar in the Binance ecosystem.
Advantages of Binance Coin (BNB)
BNB has several advantages that have played a key role in its growth. One of its biggest advantages is its close affiliation with Binance, the world’s largest crypto exchange. This provides access to significant liquidity and a variety of services offered by Binance.
Another advantage is its wide utility. BNB can be used to pay for trading fees, withdrawal fees, and even listing fees. In addition, BNB is used in the broader Binance ecosystem and can be used for various other services, such as paying for goods and services.
Last but not least, BNB has a unique coin burning mechanism, which maintains the rarity and value of the coin.
Disadvantages of Binance Coin (BNB)
Although BNB has many advantages, it also has some disadvantages. One of them is its strong dependence on Binance. While this relationship has many benefits, it also means that any issues affecting Binance can directly impact the value and reputation of BNB.
Additionally, even though BNB has transcended its status as an exchange token, many people still view it as such. This can limit the adoption and use of BNB outside of the Binance ecosystem.
Finally, although coin burning can help maintain the value of BNB, it also has the potential to create price volatility. Announcements and execution of coin burns can lead to significant price fluctuations.
Binance Coin (BNB) Features
Here are 4 features of BNB:
- Transaction Fee Discount: BNB is used as a utility token on the Binance platform, providing users with a discount on their transaction fees when using BNB. In the early years, this discount could reach up to 50%.
- Coin Burning: To maintain the scarcity of BNB, Binance buys back and burns a portion of these coins every quarter. Up to 100 million BNB (50% of the total supply) are planned to be burned.
- Wide Ecosystem: BNB is also a major pillar in Binance Chain and Binance Smart Chain, allowing for the creation and trading of various other tokens.
- Integration With Partners: BNB has also been integrated with various partners, both as a payment method or as a trading pair. This includes services like CanYa, Pundi X, and others.
Key People in Binance Coin (BNB)
Here are 3 important people behind BNB.
- Changpeng Zhao (CEO of Binance): Widely known as CZ, Changpeng Zhao is the founder and CEO of Binance. Before founding Binance, CZ was a member of the team that built the Blockchain.info trading platform and also the founder of BijieTech, a cloud trading solution provider. CZ plays a crucial role in directing Binance’s vision and strategy, as well as developing BNB.
- He Yi (Co-Founder of Binance): He Yi is one of the founders of Binance and plays a significant role in Binance’s operations and marketing in China. Prior to founding Binance, He Yi had extensive experience in media and also founded an e-commerce company.
- Roger Wang (Co-Founder of Binance): Roger Wang is one of the founders of Binance and plays a crucial role in developing Binance’s technical infrastructure and Binance Coin. Wang has a strong technical background and experience in developing financial technology.
History and Development of Binance Coin (BNB)
BNB was first launched through an Initial Coin Offering (ICO) by Binance in July 2017. At that time, Binance sold 100 million BNB (50% of the total supply) to raise funds for the expansion and development of its platform.
In the early phase, BNB was used as a utility token providing users with discounts on their transaction fees on Binance. In addition, BNB was also used to pay for withdrawal fees and listing fees. These discounts were initially set at 50% in the first year and were planned to decrease each year until reaching 0% in the fifth year.
However, as time went on, BNB evolved far beyond its status as an exchange token. Binance continued to expand the BNB ecosystem, making it a key pillar in Binance Chain and Binance Smart Chain, enabling the creation and trading of various other tokens.
In 2019, Binance moved BNB from Ethereum to their own blockchain, Binance Chain, as part of efforts to expand their ecosystem.
BNB has also forged many partnerships with various companies and services, including for the payment of goods and services. Some companies have even begun accepting BNB as a payment method.
In the future, Binance plans to continue expanding the BNB ecosystem and make Binance a decentralized exchange (DEX), with BNB serving as the native token.
How to Buy Binance Coin (BNB)
Interested in purchasing this particular crypto asset? You can buy Binance Coin (BNB) by following these steps:
- Install Nanovest app on the App Store or Play Store.
- Register according to the instructions.
- Verify your identity for security and convenience when buying crypto through the KYC feature which you can do in just 1 minute.
- Top Up your balance to your Nanovest account.
- Go to the Crypto menu, search and select Binance Coin (BNB).
- Click the Buy button and confirm the purchase with your desired amount. You can start with only IDR 5,000.
Before investing in the crypto asset you want, be sure to conduct research and analysis first. You can do this by checking the crypto asset profile, industry conditions, monitoring price movement trends, and observing its liquidity and trading volume. Performing this analysis is crucial so you can formulate an accurate investment strategy and minimize losses.
Is it Safe to Buy Binance Coin (BNB) on Nanovest?
Absolutely. Nanovest is supported by a number of professional partners with a strong reputation for providing quality services. One of these includes the technology backing of the S-Quantum Engine by Sinarmas Financial Services.
For global and US stocks, Nanovest collaborates with brokers registered with the Financial Industry Regulatory Authority (FINRA) in the United States – which ensures Nanovest users’ broker accounts up to US$500k by the Securities Investor Protection Corporation (SIPC) in the United States.
As for crypto assets, Nanovest is an Indonesian crypto exchange registered with the Commodity Futures Trading Regulatory Agency (Bappebti). The Nanovest platform itself is also insured through a partnership with Sinarmas Insurance.
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