All you need to know about BNB - June 2022

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he spectacular rise of cryptocurrencies in recent times has brought many investors. If you're connected to the cryptocurrency industry, you've probably heard about Binance. It is regarded as the world's biggest crypto exchange platform.

Its native cryptocurrency is the BNB coin, frequently referred to as the Binance Coin. BNB was vital in raising funds for Binance through the Initial Coin Offering (ICO), and it currently fulfills a variety of critical tasks. In this post, we go through the coin's origins, advantages, and usage and how to purchase and store it. Everything a cryptocurrency investor needs to know before purchasing BNB coins.

In this guide:

What is BNB?

BNB is a cryptocurrency that is exclusive to the Binance platform. The Binance exchange platform is now the most prominent crypto trading platform in everyday trade quantity. BNB is utilized on the site to pay for transaction fees, among several other services. As a utility coin, its owners would be eligible to collect trading fee discounts on the platform once it was live. Binance collected over $15 million during the ICO, and more than 100 million BNB coins were issued to the people. Despite its modest beginning, BNB has risen in importance inside the Binance network. 

BNB is built on the Ethereum blockchain technology and utilizes ERC20 tokens that can be used to deposit and keep assets. On the other hand, Tokens cannot be mined because they were pre-mined and issued during an ICO. On the Binance Platform, cryptocurrencies in existence are utilized for discounted transactions.  BNB is now available on the Binance Smart Chain (BSC), Binance's native blockchain for smart contracts. There are variants of the same coin that serve a similar purpose. 

What is the history of BNB?

Binance is a Chinese cryptocurrency exchange created by Changpeng Zhao, the former CTO of OKCoin. Yi He, another of the co-founders of OKCoin, entered the Binance group after its debut. Binance has grown significantly ever since.  Because BNB is a derivative coin that has been pre-mined and is being burnt in considerable numbers to restrict supply, no active groups are working on the coin's growth. It was intended to strengthen the cryptocurrency network and support its activities to generate a long-term ecosystem. 

BNB has changed significantly since its inception in 2017. It was created to be utilized as a crowdfunding method in the Binance ICO. On November 17th, 2017, BNB launched at a pretty cheap cost of 0.50 US dollars. However, after 67 days, BNB acquired a more than $25 price. On June 22nd, 2019, BNB achieved an all-time peak of 39.59 US dollars. The currency has grown by 861 percent in the previous 197 days since the given date. BNB is in its third growth cycle, and it is now valued at around 297 US dollars, with a market valuation of more than 48 billion US dollars.

How is BNB created?

Binance Coin is pre-mined, with 200 million BNB coins available for usage. After assigning the whole amount of coins, the firm performed its ICO in July 2017. There will be no more BNB to mine because all the coins have already been distributed. Contributors in the ICO will receive 50%, the core group gets 40%, and angel investors get the remaining 10% of the BNB coins. Binance has eliminated coins to restrict supply to retain price as the transaction fee reduction decreases year after year. 

What is the BNB burning?

The essential aspect of the BNB coin is the idea of buying back and destroying the coins. The Binance white paper outlines this approach. It means Binance will utilize 20% of quarterly earnings to buy back and then eliminate BNB. It will repeat this procedure until the quantity of BNB is half of what it was, with 100 million BNB left. 

Burning BNB is a strategic approach. If demand remains constant, limiting the number of coins in existence raises the price of the existing coins. Their price may rise even more if demand increases, which is expected owing to Binance's prominence and expansion.

You can notice the good impacts, at least to some degree, if you check a BNB pricing graph and pay close attention to the moments shortly preceding, during, and after burning. The value usually increases considerably just before the burn and falls a little afterward. Nevertheless, this post-burn decrease is still significantly higher than the token's worth before the pre-burn rise.

What are the uses of BNB?

BNB, like other emerging digital currencies, has multiple applications outside of the Binance platform. For example:

BNB can be exchanged for other crypto assets on some other platforms based on the limits established by the exchange.

BNB can be applied to make payments for Binance platform trading activities.

BNB can be used to settle cryptocurrency credit card debts.

Retailers can accept BNB as payment from clients, giving them extra payment options.

On specific sites, BNB can be applied to reserve lodgings and flights.

BNB performs numerous functions in the entertainment industry, from payment options for digital presents to purchasing raffle tickets.

Many platforms let users use BNB to buy stocks, ETFs, and other resources.

On certain websites, BNB can be utilized as security for loans. And some applications help individuals use BNB to share expenses and pay friends and relatives.

How do I purchase BNB?

You can complete the whole process in a few minutes, and everything you'll require is a smartphone or laptop, an internet service, picture id, and a payment method. The simplest way to get BNB is through a crypto exchange. You must validate your email account and identity to open an account on an exchange platform. 

After authentication, you may deposit dollars utilizing your preferred payment system. Cryptocurrency, PayPal, bank transfer, and credit or debit card transactions are frequently supported. You may now convert your cash to BNB. It is as simple as inputting the sum you wish to purchase and pressing buy on basic platforms. You can take your BNB to your wallet if you wish.

As the Binance platform's exclusive utility cryptocurrency, the simplest way to buy BNB will be to do so via Binance. It offers the most trading pairings with BNB and the best trading prices for the cryptocurrency. Apart from Binance, several platforms offer BNB, but availability is poor, and there is no sense in purchasing it elsewhere. Usually, people keep it to save trading fees, and any currency accepted by Binance may be traded using BNB. If you're seeking other platforms where you can buy BNB, FTX is a fantastic option.

How do I store BNB?

If you want to keep BNB as an asset, you need to transfer it from the platform to a wallet. Trust Wallet is the authorized Binance wallet for keeping BNB currency. Your BNB, like an ERC20 token, can be saved in any Ethereum location using MyEtherWallet. For further protection, you may also utilize a hardware wallet, such as the Trezor or Ledger Nano S.

BNB is more valuable inside the Binance platform than in a wallet. You would like to retain your BNB on the Binance platform as an active investor or trader. Nevertheless, Binance offers an independent software wallet known as Trust Wallet, which is a fantastic option for keeping your BNB cryptocurrencies away from the Binance platform even while having access to several of the functionality provided by Binance via its massive network.

What are the benefits of BNB?

Including the advantages that BNB provides for traders, there are also disadvantages. If you want to invest in BNB, thoroughly consider the following benefits and downsides.

Pros:

Great Utility Coin: Due to the present state of the cryptocurrency industry and Binance's success, BNB is regarded as a great utility coin. You may invest in this currency to benefit and use it to make transactions on the Binance market. You may also buy gift vouchers, cryptocurrency credit card payments, recreation, vacation, and items online.

Distinctive Burndown Strategy: The destruction of a BNB is a vital characteristic of this coin to preserve sustainability and steady expansion. Binance employs a unique strategy to burn BNB, reducing overall supply to increase the value.

Discount Voucher: Among the significant advantages of BNB is that customers receive savings on the fees incurred. It also helps to build the network.

Minimal Fees and Quick Trades: Binance transactions are processed instantaneously, and the charge is merely 0.1 percent for everybody.

Cons:

Adversely Impacting Regulation: Several cryptocurrency analysts and experts think that regulatory authorities in China will impact the BNB coin in the long term. Furthermore, Binance has developed a specialized platform for US consumers, and the link with that network is a complexity that may impact US investors.

Dependent on the Binance Platform: Among the most significant disadvantages of BNB is that its growth is wholly related to the credibility of the Binance platform. It implies that it is nearly impossible for this coin to progress by itself, and any influence on the platform directly impacts the BNB's credibility.

Stability isn't Assured: Nobody can predict how BNB will develop in the future or if it will be able to maintain its recent performance. 

Should I invest in BNB?

Among the most exciting aspects of BNB currencies is that, even if they do not become a sound investment option, their success does not rely only on that. It may be utilized inside the Binance Platform network to enable activities and virtual currency trading, giving platform participants a consistent experience. It's one of those coins that has a specific usage.

Before purchasing BNB, keep in mind that you must conduct a thorough study on the basics, ecology, and future of BNB. Whereas this investment may generate eye-catching rewards, it may also result in substantial short-term losses. In recent years, the Binance platform has been under regulatory oversight from various financial regulators. Still, it has reacted by pledging to satisfy regulatory requirements and acquired operating clearance in locations like Canada and Bahrain.

Up to this point, the value of BNB has been largely unaffected by these events. Probably due to its supply and demand characteristics. The maximum amount of BNB is already in distribution, and it is continually being withdrawn or burned from the system to increase the price of BNB. This supply constraint can shield against unanticipated surprises that may collapse the coin's value.

Although more crucially, this mechanism helps BNB cope with blockchain competitors such as Ethereum, Solana, and Terra, which use equivalent token-burning techniques as the multi-trillion-dollar cryptocurrency sector expands. However, the cryptocurrency industry can be highly volatile, particularly in terms of price changes. If you want to invest in BNB, do that with extreme care and precaution to protect your investment funds. The significance of risk management cannot be overstated.

BNB price chart

How much can I earn from BNB?

There are a number ways in which you can earn a return from your BNB depending on your risk appetite and investment complexity.

The following table lists centralised saving organizations that will pay a rate of interest on BNB assets on a flexible terms basis:

The following table lists centralised saving organizations that will pay a rate of interest on BNB assets on a fixed terms basis:

The following table lists decentralised staking on BNB assets:

Conclusion

The cryptocurrency sector is quite competitive, with different choices entering the market daily. However, BNB is among those digital currencies that have made tremendous development since its inception and keep expanding. This cryptocurrency has a very vibrant ecosystem, with millions of pleased and passionate users worldwide. We hope that you learn everything there is to know about the BNB coin and if it is an appropriate investment option for you from this article.

BNB FAQs

Chris

An editor at Coincrop

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Chris is a Crop Crop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely assembling lego models.

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