What is Binance Coin (BNB) Cryptocurrency?
Binance Coin digital currency was released through the initial coin offering (ICO) in July 2017. The main purpose of creating this coin was to raise capital for the development and expansion of Binance exchange. Binance Crypto Exchange (one of the largest crypto exchanges) has considerable security and processing speed, and the creation of its digital currency has made it a leader in this space. On April 18, 2019, the exchange launched its blockchain and trading coins, and as a result, Binance Coin (BNB), an Ethereum ERC-20 token on the Ethereum blockchain, was transferred to its blockchain in 2019. In simple terms, Binance Coin (abbreviated BNB) is both a digital currency for the large Binance exchange and a cryptocurrency on the Binance blockchain.
What is the main difference between Binance Coin and Bitcoin?
- When it comes to bitcoin trading, the trader should always consider which cryptocurrency to use. Because not all exchanges and websites are equally reliable and secure. Binance Coin digital currency is accepted in Binance exchange, which is one of the safest exchanges in the world.
- Focus vs. Decentralization: Bitcoin is traded everywhere and is vulnerable to a variety of variables. Binance Coin digital currency is less prone to external influences but is strongly influenced by Binance internal conditions.
- Binance Coin is a new currency launched in 2017. But Bitcoin, on the other hand, has a long and proven track record, first being released in 2009.
- The maximum number of bitcoins is 21 million, but the supply of binance coins is 200 million coins. This means that in the coming years, BNB coins can overtake bitcoins in terms of overall volume.
Unlike Bitcoin, Ethereum and other leading cryptocurrencies, Binance Coin is the new currency in the blockchain network. This means that its market share is lower than other leading currencies, and in addition, the allocation of traders’ portfolios to these cryptocurrencies is limited. As a result, crypto providers compete for investor resources on a daily basis. Cryptocurrencies may be deceptive to many traders because they are not dependent on the government, but it is unwise to think that government actions will not have a significant impact on their value. For example, if the US government economy is in poor shape, this may cause traders to increase their investment in cryptocurrencies for fear of devaluation.
How to save Binance Coin?
Because Binance Coin is an ERC-20 Ethereum token, it can be stored in software wallets such as MyEtherWallet and Jaxx, and hardware wallets such as TREZOR and Ledger Nano S also support BNB. In general, any wallet capable of storing Ethereum (ETH) can also support BNB tokens.
How to buy Binance Coin?
Binance Coins cannot be mined at this time because all coins were mined at the time of the ICO. There are two ways to buy this cryptocurrency:
- You own Bitcoin, Ethereum and other coin tools, and now you want to buy Binance Coin. The procedure is very simple and it is enough to get Binance Coin for the value of your coins.
- You have no cryptocurrency and now you want to buy Binance Coin, to do this you must first buy some digital currency. Our suggestion is to go for a currency with high liquidity and stability (currencies such as Bitcoin, Ethereum, Litecoin, Ripple, etc.) and buy your currency through reputable and secure websites. You can then go to the Binance website and convert it to BNB. (There are other websites that support Binance Coin, but their liquidity is low, and since this currency was created for transactions at Binance Exchange, it is better to buy this currency from their website).
What are the functions of this cryptocurrency in Binance Exchange?
If you use this digital currency to pay for transaction fees, this exchange will offer its users a 25% discount and will also provide access to discounts related to higher trading volumes.
What is the BNB transaction cost discount?
When you hold Binance Coin in Binance Exchange (regardless of which currency pair you trade), you can pay your transaction costs with Binance Coin. When you do this, you get a 25% discount compared to normal transaction costs. You can also enable or disable the “Pay with BNB” option in your Binance account settings at any time.
How does the BNB provide access to discounts on higher trading volumes?
Binance, like many other exchanges, offers discounts to higher volume traders. But unlike other exchanges, these traders are required to keep certain amounts of Binance Coin digital currency in their account to access such discounts.
Advantages of using Binance Coin
- Has low costs in the cryptocurrency market
- Ability to take advantage of discounts on Binance transactions
- Ability to use it outside the Binance trading platform
- Possibility of exchanging it with Fiat currencies
- Easy access to it via desktop, HTML5, iOS and Android
- Perform high-speed transaction processes
- Wide access: Binance exchange allows you to trade more than 40 currency pairs
Investment Risks in Binance Coin
Because this token, like many other digital currencies, is based on Ethereum, it may increase competition and potentially reduce its value in the future.
The fact that Binance Coin is limited to the Binance exchange and its process is highly dependent on the validity and performance of this exchange can be a major problem. This makes it impossible for Binance Coin to determine his own course.
Binance repurchase policy can lower prices: As BNB developers plan to repurchase a portion of the coins in the future, it is likely to depreciate and this may lead to a fall in price.