What EXACTLY Is The Binance Coin(BNB) & Why Should You Care?

 

What Is The Binance Exchange?

Before I can attempt to give you any kind of explanation on what the Binance coin is, I feel like I need to give you a quick overview of the crypto exchange that it was issued by.

As of the time of this writing, Binance is the largest cryptocurrency exchange on the planet. In fact, they have nearly $1bn in trading volume every single day! What makes that even more impressive is that the exchange has only just launched in mid-2017 – on July 14, 2017 to be exact.

That means in less than half a decade, they went from a brand new cryptocurrency exchange to overtake every other crypto exchange on the market with millions of registered users. Because of this, Binance is one of the leading cryptocurrency exchanges in the world. They provide traders with access to a wide selection of tokens and coins against multiple fiat and cryptocurrency pairings as well. As mentioned above it was first launched in 2017 with the aim of becoming the best crypto exchange in the industry. Over time, Binance has become a large and growing ecosystem of blockchain protocols and trading products. The platform provides some of the most exclusive tools for crypto enthusiasts and traders. One example of these tools is the Binance coin or BNB Binance token. This token is authorized by the Binance exchange that allows crypto holders to pay fees on Binance at discounted rates. July of 2017 is the Binance coin release date and soon after, the BNB coin began its journey of becoming the world’s largest crypto exchange token. At least in terms of the pure trading volume, anyway. The BNB token is actually many things wrapped into one such as a development protocol for issuing tokens and building decentralized applications (dApps). It’s also a utility token used for trading cryptocurrencies, as well as a rewards coin that incentivizes both spending and holding. This means that it doesn’t matter if you are a market player considering investing in the BNB token, or simply just a crypto enthusiast who wants to learn more about this versatile asset, it is crucial to understand every aspect of the BNB coin.

 

Detailed Review of Binance Coin (BNB) 

The BNB token is very possibly the strongest of all exchange coins currently available. Exchange coins are always an attractive bet since they are well integrated into the trading system and provide discounts as well as exclusive access to certain VIP features. Since Binance has a great revenue model, it can and does invest into making the exchange continuosly better and can ensure that it is powered by superior technology.

One great thing about the BNB token is that it automatically benefits if the Binance exchange prospers in the long run. Another reason the BNB coin has had such a good track record is because it is also subjected to a burn mechanism where the Binance exchange purchases tokens through a buyback program and deletes them from the record, forever. This helps in reducing the overall total supply of coins and helps in ensuring that there aren’t too many tokens. Supply and demand is a key factor in this strategy and I do believe it is already paying off bigtime and will continue to do so for the forseeable future.

Let’s take just a second to talk about some numbers. The price of one BNB was $38.14 on December 30, 2020. It is currently trading at several hundred dollars at the time of writing. These are gigantic returns and very few assets can provide such attractive returns in such a short time period. The BNB coin truly genuinely displays the power of blockchain technology and early adopters have gained handsome returns from their investments.

 

Advantages of BNB

The best advantage of BNB token USED to mainly be only for those for anyone who were trading on Binance. This is because when somebody holds BNB on Binance you get a 25% discount on trading fees. What’s even better is tht the more BNB you hold, the greater the discount becomes. Although it should be disclosed that you also need a certain amount of trading volume combined with your BNB you are holding in order to get greater discounts on trading fees.

The introduction of the Binance Smart Chain (BSC) has given BNB far more advantages than it had upon its initial inception. Much like Ethereum is necessary to perform transactions on the Ethereum network because it is used to pay for transaction fees, BNB Coin is necessary to perform transactions on the BSC. Whether you are claiming rewards from your Decentralized Finance (DeFi) platform of choice, making a swap of one digital asset for another, or interacting with a smart contract in any other way on the BSC you will need BNB to pay the transaction fee. The bonus is that the fees on the Binance Smart Chain are much cheaper and faster than on Ethereum at this time, which is likely why transaction numbers are now higher on the BSC than on Ethereum.

Another advantage of BNB is it is a deflationary asset. Each quarter Binance takes a portion of the fees received by the exchange over each quarter year period and then burns it, meaning it is taken out of circulation and can never be used again. This is a deflationary action that means over time the amount of BNB in circulation will only ever go down, as it is not mined and started with a max supply of only 200 million coins.

 

How Does Binance Coin (BNB) Actually Work?

Basically, BNB comes with more than one group of functions. As mentioned earlier, it’s the Binance exchange’s native token, and it also works as an exchange token. This cryptocurrency has multiple use cases, and it’s up to the users to decide how they want to use their Binance Coins. For example, BNB coins can be used to make online and in-store purchases. People also use BNB to meet their travel expenses, to create smart contracts, for lending, and more. Surprisingly millions of BNB coins have already been utilized for such use cases.

Use Cases of Binance Coin (BNB)

Binance Coin (BNB) has multiple use cases. As mentioned, it can be used for a few different groups of functions, and their use cases are:

Binance Exchange Native Token

  • Users can use BNB to pay the platform’s fee

  • On the Binance decentralized exchange, BNB is the key trading pair

  • Can be used across a wide variety of applications such as DApps and games powered by the Binance chain

  • Can be used on Binance Liquidity Swap

  • Users can donate BNB on Binance Charity

Exchange Token

  • Gives users access to increased trading volume discounts

  • When people use BNB to pay their trading fee, they can have up to a 25 percent discount

  • Can be used as a trading pair on the Binance blockchain

  • People can use BNB to make both in-stores and online purchases for services and goods such as flights and hotel booking, buying virtual gifts, e-gift cards, mobile top-ups, and more by using Binance Pau or Binance Card.

Binance Coin (BNB) Burning

  • In a nutshell, when you burn a number of cryptocurrency tokens, this means that the digital assets are sent to a dead wallet that cannot be retrieved.
  • Therefore, the respective tokens are no longer in circulation, and thus – the overall supply of the cryptocurrency is reduced.
  • This is not too dissimilar to a share buyback program executed by traditional companies.

Since its the project’s inception, Binance has burned more than 100 million BNB tokens. At today’s value, this represents more than $420 million.

We touched on this briefly a couple times so far but I want to make this point very clear. After every three months, Binance utilizes 20 percent of its total profits to burn or permanently destroy BNB tokens. The burning of Binance Coins that took place on 15th January 2022 for example, the platform got rid of 1,099,888 of its tokens available in its treasury. As of the writing of this article, the total supply of Binance tokens is less than 168,137,036 coins and continues to drop with each burn. It’s a deflationary procedure that increases the value of the cryptocurrency with the passage of time. Frankly, I think it is a genius strategy and it has obviously paid off extremely well for the coin so far.

 

Easy to Buy and Sell

Of the many many thousands of different cryptocurrencies listed on places like CoinMarketCap, many of those carry very small market capitalizations. And as such, entering and exiting this market is not always easy.

This might be because either very few exchanges list the token or because there simply isn’t enough demand in the market to provide sufficient levels of liquidity. In particular, this can cause huge problems when it comes to cashing out your investment.

However, in the case of the Binance Coin, this paticular cryptocurrency happens to be one of the largest globally in terms of valuation. As of writing, the project is carrying a market capitalization of almost $70 billion and it is listed on well over 100+ exchanges.

What this means from an investment standpoint is that you can buy the Binance Coin in a simple and low-cost way. Perhaps, even more importantly, you will never have any issues converting your Binance Coin investment back to cash at any point you wish.

 

What Can you do With the Binance Coin? 

HODL as a long term investor: As explained earlier, BNB has a diminishing supply model and the fewer the coins, the more the price will be in future. You could simply HODL it and gain from its price appreciation in the long term. I know that is definitely one of MANY strategies that I am using when it comes to BNB.

Use BNB as a currency: You can use the Binance Coin to settle your credit card bills or pay for various goods and services. While many people look towards cryptocurrencies as assets, they are also primarily built for payment purposes. The Binance coin is supported by many payment networks including NOWPayments, XPOS (PundiX) and Monetha. Bet you didn’t know that!

You can also use BNB to pay while travelling as the coin is supported by Travala.com, Trip.io and TravelbyBit or transfer some funds to friends and family using the ADAMANT messenger. BNB is also supported on Axie Infinity, Gifto, Decentraland and BNB-Lotto. Pretty crazy just how fast mass adoption is happening around the world, huh?

You could hire freelancers using Canya and pay using BNB or use it on BitTorrent. CenterServ, a cloud service provider has also integrated BNB as a payment mechanism as well!

Lending BNB: BNB is supported by ETHLend, Nexo and LNDR where you can use the Binance Coin as collateral and take loans or offer loans to other parties.

Swap BNB to other BEP20 tokens: You can use BNB and directly swap to other Binance chain tokens or altcoins on a decentralised exchange. The process is quick and simple, and is described below. I personally use Atomic wallet to do this all the time because it makes this extremely easy!

 

What else is Binance Coin (BNB) used for?

Apart from paying for Binance trading fees, Binance Coin (BNB) can now be used to:

  • Pay for trading fees on Binance DEX (Decentralised Exchange)
  • Pay for transaction fees on the Binance Chain
  • Pay for transaction fees on the Binance Smart Chain
  • Pay for goods and services for both online and in-store purchases (e.g., using Binance Card or Binance Pay)
  • Pay for hotel and/or flight bookings and more at Travala.com
  • Usage as a community utility token on the Binance Smart Chain ecosystem (such as games and DApps)
  • Participate in token sales hosted on the Binance Launchpad
  • Donate on Binance Charity
  • Provide liquidity on Binance Liquid Swap

Binance Coin Frequently Asked Questions (F.A.Q.)


Binance Coin currently has two main use cases on top of the other common use cases of cryptocurrency. One, BNB can be used to receive a 25% discount for trading fees on Binance Exchange. Secondly, BNB can be used to pay fees on the token’s native blockchain, Binance Chain. Binance is working to provide many places to spend your Binance Coin. For a complete list of places you can use/spend your BNB, see the use-bnb page.


Yes, BNB is traded on a number of different exchanges. However, some of the largest exchanges in the world do not have BNB available for trade on their platforms, likely due to reasons related to competition.


Yes, Binance Coin can be purchased via Mastercard directly on Binance Exchange, in addition to a few other platforms focused on purchasing cryptocurrencies with a credit or debit card.


Binance Coin is likely not as safe as Bitcoin due to BNB’s relatively short history of existence. Additionally, holding any cryptocurrency, especially an altcoin, should be viewed as risky. Then again, there’s no reward without risk.


Yes, Americans can buy Binance Coin. Binance has a platform specifically built for US-based users, known as Binance.us.


Yes, you can take your Binance Coin off of an exchange and store it in your own personal wallet where you are in full control of the private keys. In fact, you can even store BNB on hardware wallets like Ledger and Trezor.

How to Swap BNB to other altcoins?

As mentioned earlier, I almost exclusively use Atomic wallet for this just because it is so dang stinking EASY!

 

So in conclusion, the BNB coin could very well continue its dominance as the native token of the Binance exchange. The price will most likely see even MORE appreciation as the regular burn is carried out and more services integrate the BNB token as a payment method. The Binance exchange has reiterated its resolve to work with various financial authorities around the globe and seek regulatory approval in these countries. As cryptocurrencies go more and more mainstream, the Binance Coin will see no doubt see even more demand and adoption from institutional investors as well as more individual investors as well. You can collect BNB coin for absolutely FREE (along with many other coins) by using Dutchy Auto Faucet. You can find out more about how that works by clicking the banner below:

 

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