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What is Binance Coin (BNB)?

Binance Coin (BNB) is the cryptocurrency that belongs to the Binance exchange, which is one of the biggest platforms for trading cryptocurrencies. BNB started as an Ethereum-based token, but now it runs on its own blockchain called Binance chain.

BNB also has a system that automatically burns some of the coins to lower the total supply to 100,000,000 BNB. The amount of BNB that is burned depends on the price of BNB and the number of blocks created on the BNB Smart Chain in a quarter.

Binance BNB Coin burn explained

Binance has a process of destroying some of its coins to make the supply of BNB smaller and increase its value. This process is called coin burning and it happens every three months. The amount of BNB that is burned depends on how much the coin is worth and how many blocks are created on the Binance chain in that period. Additionally, Binance also destroys some of the BNB that people use to pay for transactions on the Binance chain. Binance’s goal is to burn half of the original supply of 200 million BNB, leaving only 100 million BNB in the market.

Binance – Real time price and value

How does Binance work?

Binance is a platform that allows you to buy, sell, and trade different cryptocurrencies. Binance has its own cryptocurrency called Binance Coin (BNB), which you can use for various purposes on the platform. Some of the features that Binance offers are:

• Binance Exchange: You can trade hundreds of crypto pairs on the Binance exchange, and pay lower fees if you use BNB;
• Binance DEX: You can trade crypto on a decentralized exchange that runs on the Binance chain, and pay for fees with BNB;
• Binance Beacon Chain and Binance Smart Chain: You can use BNB to pay for fees on these two blockchains that support smart contracts and decentralized applications (DApps);
• Binance Card and Binance Pay: You can use BNB to buy goods and services online or in person with these payment methods;
• Binance Launchpad: You can use BNB to participate in token sales of new and emerging blockchain projects;
• Binance Charity: You can use BNB to donate to various causes;
• Binance Liquid Swap: You can use BNB to provide liquidity and earn rewards on this platform.

Pros and cons with BNB

BNB has various uses and benefits, but also some risks and drawbacks. Here is a bullet list of some of the pros and cons of BNB:

Advantages

The benefits of using BNB is that you can use it to:

• Pay for lower trading fees on the Binance exchange and other platforms that support it;
• Pay for transaction fees on the Binance chain and the Binance smart chain, which host many decentralized applications and projects;
• Buy goods and services online or in person with Binance card or Binance pay;
• Participate in exclusive token sales on the Binance launchpad;
• Donate to various causes on the Binance charity;
• Provide liquidity and earn rewards on the Binance liquid swap;
• Benefit from the coin burning program that reduces the supply of BNB and increases its value over time.

Disadvantages

The drawbacks of using BNB is that you may face:

• Regulatory uncertainty or restrictions in some countries or regions that do not allow or limit the use of BNB or other cryptocurrencies;
• Security risks or technical issues that could compromise your BNB holdings or transactions, such as hacking, phishing, or network congestion;
• Market volatility or price fluctuations that could affect the value of your BNB holdings or transactions, especially during periods of high demand or low liquidity;
• Competition or innovation risks that could reduce the demand or utility of BNB or other cryptocurrencies, such as new regulations, technologies, or platforms.

Who created BNB?

Binance is the biggest cryptocurrency exchange in the world by trading volume. It was created in 2017 by Changpeng Zhao, who also goes by CZ. He is a developer who had previously built high frequency trading software for stockbrokers. He also worked at Blockchain.info and OKCoin before founding Binance. Here are some details about Binance’s creator:

• He was born in Jiangsu, China, but his family moved to Canada when he was a teenager;
• He studied computer science at McGill University in Montreal;
• He worked at various companies, including Bloomberg and Fusion Systems, before joining the crypto space;
• He started Binance in July 2017, after raising $15 million through an ICO;
• He is one of the wealthiest people in the crypto industry, with a net worth of over $10 billion as of May 2023.

History of Binance Coin (BNB)

Binance Coin (BNB) is the cryptocurrency that belongs to the Binance exchange and ecosystem. Its history can be summarized as follows:

• Binance was launched in July 2017 through an initial coin offering (ICO) that raised $15 million. The ICO distributed 100 million BNB tokens to the public, while the founding team and angel investors received 80 million and 20 million tokens respectively.
• BNB started as an ERC-20 token on the Ethereum blockchain, but later moved to its own blockchain called Binance chain in April 2019.
• BNB was designed to offer various benefits and incentives to users of the Binance exchange and ecosystem, such as lower trading fees, access to exclusive token sales, payment for goods and services, and more.
• Binance also has a coin burning program that aims to reduce its total supply by 50%, from 200 million to 100 million tokens. The amount of BNB that is burned every quarter depends on the BNB price and the number of blocks generated on the Binance chain.
• BNB has grown into one of the largest and most popular cryptocurrencies in the world, reaching a market capitalization of over $49 billion as of May 2023. It supports many projects and applications on the Binance chain and the Binance smart chain, which are blockchains that enable decentralized finance (DeFi), non-fungible tokens (NFTs), metaverse, and Web3.

The rise of Binance Coin (BNB) – A utility token that actually provides utility.

At a time where most ICOs have failed to provide the utility needed to see increased demand, adoption and speculative value, Binance has challenged the status quo in delivering sustained dominance and growth while building significant utility into Binance Coin (BNB), a token that actually gets used.

Binance Coin (BNB) – going against the grain.

Initial Coin Offerings have stirred a significant amount of discussion over the past 12 months, with the vast majority of projects failing to deliver on their ambitious promises to successfully to build or integrate a utility token into platforms that create an intrinsic value. A utility which in turn should drive demand within an ecosystem and ultimately see a an asset which increases in value over time to the benefit of early supporters and speculators.

One of the few Ethereum based tokens that seems to have stayed true to value proposition of ICOs following its generation in December of 2017, is Binance Coin (BNB).

The CEO of Binance.com, Changpeng Zhao (widely referred to as CZ), has managed to provide and sustain continuous iterations to the Binance platform which creatively deploys the usage of Binance Coin (BNB), in such a way that what has resulted in a rapidly increasing demand for the purchase and usage of the token, with a number of speculators looking to make investments into projects that could outlast the crypto-winter electing to place their bet on it’s future.

Below, we discuss several ways Binance Coin has successfully challenged the norm and secured this demand.

Utility – Reduced Trade Fees

He-Yi, the co-founder of Binance.com, once described the Binance Coin (BNB) as the fuel to Binance’s engine, due to offering millions of Binance users who trade cryptocurrency on the platform the ability to enjoy a reduced trading fee if they pay in the platforms native currency, Binance Coin (BNB).

These traders receive a 50% discount on trading fees simply by using the token, and while this discount does diminish over several years following it’s launch, time has shown the successful impact that was created from this utility in bootstrapping the ecosystem and forming a benchmark for why the token is widely recognised as a rare instance of where an ICO was almost immediately able to deliver on building intrinsic value within a utility token.  

As a result, millions of traders have been able to reduce fees paid on the trades they would likely have wanted to take anyway, and demand for the coin saw steady growth.

Utility – The Binance Launchpad

In December of 2017, Binance launched the Binance Launchpad, an exclusive incubator for hand picked projects to raise funds through an initial coin offering to investors, with funds raised payable in one coin and one coin only, Binance Coin (BNB).

The launchpad has seen nothing but success, having now produced four different investment opportunities for supporters and speculators of projects ranging from secure Bitcoin wallet applications, to artificial intelligence and IOT platforms.

Two of it’s most recent public offerings, BitTorrent (BTT) and Fetch.AI (FET), captured a significant return on investment for the handful of investors fast enough to get in, with the BitTorrent (BTT) token climbing 10x in price in the weeks following its listing on the Binance exchange.

Similarly, Fetch.AI secured an almost 5x return within just minutes from listing on the exchange, where the ability to trade the token was opened to everyone who missed out.

The Binance Launchpad offers a unique and fortune-weighted chance to secure but a small handful of public-sale tokens that are offered up as a means of raising capital.

Attract.AI, the most recent such project, saw 24,000 people pre-sign the User Agreement. Of those, 19,860 people successfully submitted a buy order, with hopes of securing the token before it became widely available. Of these, just 2,758 people were quick enough to actually see the order execute. The project raised the equivalent of $6 million USD in a mere 22 seconds, with an average investment of $2175 USD, paid only in Binance Coin of course.

To see the impact of the Binance Launchpad on the demand for Binance Coin (BNB), one only needs to look at at the price of Binance Coin against Bitcoin on the exchange.

Due to the requirement to own the token prior to a Launchpad project ICO, one must first acquire the Binance Coin (BNB). The trick is when to do this, as excitement within the market prior to the deadline of each sale has resulted in a significant price climb as far as several weeks out, and it seems to only be amplifying with each success.  

Which project will be next? It’s not been announced yet, but the community is rife with speculation and excitement none the less.

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Utility – Relentless expansion, the Binance Decentralised Exchange

Binance is a centralised exchange that maintains custody and control over all deposited assets on the platform. This structure has enabled the CZ and his team to successfully navigate changing market conditions and scale capability to facilitate thousands of trades per second. The irony of a platform which trades decentralised assets while itself not being decentralised has not been entirely lost on CZ, and despite there being several valid arguments where the majority of people actually prefer using a centralised exchange, CZ has now commenced an undertaking that seeks to satisfy those who want independent control over their funds and a guarantee of trustelss transactions. To have trades enforced by smart contracts, and trades which never expose their capital to the trust of third parties.

With all of the above in mind, it might not come as a surprise to learn that how Binance intends to secure and run a decentralised exchange – by building their own blockchain, “Binance Chain”.
Further, it shouldn’t be a great shock to learn that at current, though not certain, it looks like Binance Coin (BNB) is likely to play a pivotal role in this new blockchain and in how assets are trustlessly traded in future without third parties being involved.