What is Binance Coin
Whether you have some experience in the space and have been investing in crypto for some time, or you are new to the field, you have most likely come across the name Binance, and that is not surprising. This is the largest cryptocurrency exchange in the world. The name "Binance" is a combination of two words: "Binary" and "Finance". If you've ever used the platform, you might already be aware that it has its own cryptocurrency called Binance Coin (BNB).
Binance Coin is a digital currency issued by the crypto exchange Binance, which powers all operations on Binance.com.
Binance Coin is used by users to pay the fees charged by the exchange for using their services. These fees include, but are not limited to, trading fees, exchange fees, and cryptocurrency listing fees. Also, like any other cryptocurrency, BNB can also be traded on supported crypto exchanges.
Token development
Binance was founded in 2017 by its CEO, Changpeng Zhao, along with co-founder and CTO, Roger Wan. Changpen Zhao, who is also known as “CZ” in the crypto community, previously served as the CEO of BijieTech. In addition, CZ is also the co-founder and CTO of OKCoin.
Binance has issued a total of 200 million BNB tokens. The company held its Initial Coin Offering (ICO) between July 14 – 27, 2017. The total supply of tokens was distributed in a certain percentage among the various entities:
- 100 million (50%) BNB tokens were reserved for the ICO.
- 80 million (40%) BNB tokens were distributed among the team behind the project.
- 20 million (10%) BNB tokens were reserved for the business angels who invested in the Binance cryptocurrency.
One of the key aspects of Binance Coin is the token buyback and token burn plans that happen every 3 months. This process is explained in the Binance White Paper. In summary, Binance will use 20% of each quarter's profit to buy back and then burn BNB. The exchange will continue this process until the supply of BNB is 50% of the original amount, with 100 million BNB remaining. Any redemption transaction done by Binance to burn BNB will be announced through the blockchain for more transparency.
What are the benefits of Binance Coin?
As already mentioned, Binance uses the BNB token to collect various fees charged for using the platform, such as trading, withdrawals, registration, etc. As of August 2018, the platform charges a trading fee of 0.1% for each transaction, but if users pay in BNB, they can claim an additional discount on trading fees.
Although the primary purpose remains to pay transaction fees on Binance.com, Binance DEX, and Binance Chain, BNB is used for payments, hotel and airline ticket reservations, various online services, and even financial purposes.
BNB are also used to invest in various ICOs that can be found on Binance's Launchpad program.
Unlike Bitcoin, Binance Coin's functionality is not limited to peer-to-peer payments. It is an integral part of the Binance ecosystem. The BNB token is essentially a monetization vehicle for the platform.
The BNB token has some unique advantages for its use on the platform. Through BNB, users are entitled to additional discounts not otherwise applicable with any other cryptocurrency.
Burning BNB
Although 100 million Binance tokens were initially offered in the ICO, the current total supply is less. Each quarter, Binance uses one-fifth of its profits to buy back and permanently destroy or “burn” the BNB tokens it holds in its coffers.
Lost BNB in eligible cases can also be recovered through the 'BNB Pioneer Burn Program'. It counts the coins lost by users against the official burn count and restores them with BNB.
Additionally, BNB uses a real-time burn mechanism based on gas fees. A fixed ratio of collected fees is burned in each block, the ratio being determined by BNB validators.
How to buy BNB?
1. Choose a crypto exchange
There are numerous cryptocurrency exchanges and exchanges that range from easy-to-use systems to complex dashboards for advanced traders.
Since BNB is so popular, most cryptocurrency exchanges will be able to purchase the token, but it is recommended that you stick to a few of the more popular exchanges such as Binance, Kraken, Coinbase, etc. Different platforms come with different fees, security measures, and may include other features, so it's a good idea to do your research before signing up.
2. Create an account and verify it
Get started with account registration, which is completely free on the aforementioned platforms. For additional security, 2FA - two-factor authentication - is also activated. That way, you and your device are the only ones who can give access to the account.
It then goes through a KYC process, which involves providing personal information – ID card / passport / driving license details, proof of address (eg bank statement or utility bill).
After completing these steps, you are ready to buy, sell and trade Binance Coin (BNB) as well as take advantage of various services such as staking.
3. Fund your account
Once your account is registered and verified, you need to deposit funds into the account in order to start using the platform's buying and trading services.
The main deposit options are:
- Credit/debit card
- Bank deposit
- Peer-to-peer (P2P)
Where to buy BNB?
On Binance, the world's largest cryptocurrency exchange, deposits are absolutely free.
Withdrawal fees from the platform are as follows:
If you have opted for direct account funding, depending on which fiat currency you use, the deposit fees are:
