Crypto basics 101: Quick introduction to Binance Coin

Binance launched their cryptocurrency called Binance Coin (BNB) in 2017 but it didn’t reach its complete version until 2019. Even then, their crypto is one of the world’s most traded assets. You can invest in them at any time to benefit from its network’s many features or gain profit from its scaling value like in Bitcoin. 

Before you begin putting funds into BNB, you need to fully understand the network and its assets. There are a few elements to cover including the company that founded the blockchain and establishing what it was meant to accomplish. Here is your quick introduction to Binance Coin and its platform:

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What is Binance?

Before talking about the Binance coin crypto, you must first know the company behind it. Binance is an exchange founded by Changpeng ‘CZ’ Zhao and Yi He established in 2017. It is a platform designed to facilitate trading between cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) or buying them directly using fiat. 

Binance is a centralised company, meaning that there is a group of people ranked between employees to managers and higher-ups in control of the exchange. Many argue that this is counter-intuitive with the cryptocurrency’s concept of decentralised finance (DeFi) but it is them who made such an economy cheap and reliable. Thus, Binance is an important participant in the grand scheme of the DeFi ecosystem. 

What is Binance Coin?

Binance Coin or BNB is the native currency in the Binance Smart Chain. As a crypto, it is a digital asset travelling in the Binance Smart Chain. This is the latest and most intuitive network for BNB forked from Ethereum since 2019. 

Do not confuse it with the Binance Chain 2017 because these are different platforms altogether and funds from either side cannot be sent to addresses on the other. BNB also used to be an Ethereum-based (ERC20) token but they migrated to a separate mainnet after establishing the Binance Smart Chain.

How does Binance Coin work?

BNB has a maximum supply of exactly 200,000,000 which were all available on launch day. 50% were sold at an initial coin offering (ICO), 40% were gradually paid to the founding members, and 10% were awarded to angel investors. 

To keep the BNB cryptocurrency from inflation, Binance buys them back from holders using 20% of their profit every 3 months and burns the bought crypto. This keeps the supply down and the demand high. Binance pays BNB for their current market price, giving every holder guaranteed profit. 

It is also worth noting that the Binance Smart Chain operates using a delegated proof of stake (PoS) consensus system. This is similar to the PoS model used by Ethereum in which investors can support the network by becoming stakeholders. If you are one, then you gain passive payment in BNB coming from transaction fees charged by the blockchain. 

PoS also allows all stakeholders to vote for the future of the network. However, this made progress slow and expensive, forcing Binance to change it to make it cheaper. Thus, the delegated PoS only counts the votes from the top 21 stakeholders. 

It’s quicker, cheaper, and more efficient for the system but it’s also more centralised compared to most blockchains. If you don’t want to be one of the top 21 stakeholders, then you can loan your BNB to any of the top 21 and they will share their profits with you.

Where to buy Binance Coin?

BNB crypto is available in almost every exchange and Binance Crypto trading is as easy in each service. Binance Exchange is the best platform where you can do this but you may also buy it at sites like Crypto.com, FTX, and Coinbase. MetaMask is also great for buying BNB directly but this isn’t an option for everyone around the world. You can still store BNB at a MetaMask wallet but you have to buy it at another exchange like Binance or the other three.

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How to buy BNB crypto?

The requirements to invest in Binance Coin are the same for any other cryptocurrency. You will need funds to get started, preferably enough to buy a full asset. However, BNB crypto price has skyrocketed to more than 300% since its ICO giving it a rough estimated market value of €250 to €300. You can still buy a fraction of the asset for as low as €30 on most exchanges.

You can get any crypto wallet to store your purchased assets and connect with the BNB blockchain. The general rule of thumb is that if the wallet can store ETH and interact with the Ethereum mainnet, then it will work for Binance Coin. Opt for software versions rather than hardware as a beginner because they also let you buy crypto Binance directly.

Make an account on an exchange and link a payment method you prefer. It can be a credit card, debit card, prepaid payment, or a payment app. Use the exchange’s interface to buy the asset you want. First, find BNB and look for the ‘buy’ button then press it. This will have you choose how much you want to get or spend on the asset.

Buying crypto this way is not instant. It will consider your offered payment as a bid for the assets and send you the money after taking the payment if your transaction request is accepted. Another way to get BNB or commence Binance crypto trading is using swap apps at Ethereum. 

Convert any crypto you wish to offer to the app and an autonomous algorithm will complete your transaction for you. The BNB is kept in the exchange’s wallet until you transfer it to a third-party wallet of your choice. Withdraw your assets or send it to your other account using the peer-to-peer transaction feature,

What are the different uses for BNB?

BNB can be used as a mode of payment on services that accept crypto like several travel agencies worldwide. You can also use it as funds to buy other assets at the Binance Exchange like any other crypto. Likewise, its market value is based on rising speculation as well as supply and demand, making it a popular store of value like the BTC. 

You can buy the dip and benefit from the increasing value in the Binance Coin future. This is called hodling (holding) and is a common practice among investors. As an asset with expanding uses over time, the Binance crypto future is secure with only profit to reward your patience. 

Another popular use for BNB is as an alternative payment system to ETH. The Binance Smart Chain’s delegated PoS allows transaction fees to be cheaper than Ethereum’s. Using the Binance Bridge, its blockchain can support ERC20 tokens without having to change the asset’s codes or converting them into another crypto. This also supports Tron (TRX) and Tron-based tokens (TRC20) just as they would for Ethereum. 

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What is the future of Binance coin?

Investors’ BNB crypto prediction is primarily optimistic thanks to the asset’s two core elements. The first is the crypto industry’s success in integrating with a majority of the world’s industries. BNB is among the most valuable assets to be a part of this with a multi-million euro market cap to secure its value. 

Is BNB a good investment?

BNB coin predictions reveal that it is likely to rise along with the next bullish trend. The peak is expected to happen every December which gradually increases the price ceiling for the asset. There will still be dips in between and you can prepare your funds to invest when the opportunity arises. 

As an investor, you must determine exactly when such opportunities may come. You can do so by discussing the matter with other investors at a forum, social media page, or convention. Likewise, you should also follow trends featuring cryptocurrency to see what’s next for the economy. The Binance coin crypto won’t be directly referred because it’s not the focus of any trend. Instead, you can rest knowing that it is riding the same trends as BTC and ETH.

Why is Binance coin rising?

There are two established factors dictating BNB cryptocurrency value. The first is the demand and supply of the asset. It has a maximum number circulating the network and they are burned regularly to drop them lower while also giving the investors their due profit. Investors are still buying more BNB afterwards, thus maintaining the demand for the asset. The second factor is the benefit of its blockchain. Traders can use the Binance Smart Chain’s features for other tokens but they still need to use BNB to fuel the actions they need done. 

Take away

Binance entering the crypto-development industry is one of the best decisions they’ve made both for them as a company and for investors worldwide. It provided a helpful platform for traders, making it an irreplaceable element in the crypto industry. The BNB asset that circulates it thus becomes one of the most valuable assets in the world. It will continue to grow with BTC or ETH and you can be one of its beneficiaries.

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Words: Clarence Clarke