Home Crypto News What is Binance Coin (BNB)?

What is Binance Coin (BNB)?

What is Binance Coin

Binance Coin, known by its ticker abbreviation BNB, is a cryptocurrency that acts as the native token of the crypto exchange of the same name: Binance. The cryptocurrency was introduced in 2017 ahead of the exchange’s launch. Initially, it was built as an extension to the Ethereum network (as a so-called ERC20 token). In 2019, a major adjustment was made: The BNB tokens were transferred one-to-one to BinanceChain, the exchange’s self-developed blockchain network.

Of all the major cryptocurrencies, BNB has probably made the biggest strides in the 2020-2021 bull market. Just after the stock market panic in March 2020, the price of a BNB token had fallen below $10: eleven months later, the price briefly reached a record high of almost $350. Binance is the largest crypto exchange, processing billions of dollars worth of transactions every day between hundreds of different crypto currencies. As a result, BNB even grew into the number 5 cryptocurrency based on total market value in the bull market of 2020-2021. What did that do for the price? View the graph for an impression.

The incredible jump in value is largely due to all of the new traders and crypto investors getting in during the bull market. As a result, the trading volume on the exchange is growing rapidly, and with it the demand for BNB tokens for transaction costs, for example. But there are still a number of factors that make this exchange token rank so high in crypto land. Below you can read everything you need to know about BNB.

The technology in brief

BNB cannot be obtained by mining – the network does not use Proof-of-Work like Bitcoin, for example. Instead, the Binance blockchain uses a consensus model called Byzantine Fault Tolerance (BFT). However, you can receive BNB tokens if you participate as a validator on the network in the validation of new blocks.

The token has a total supply of 200 million tokens. At the ICO of the token in 2017, 100 million of them became available on the market. A part of the other half is incinerated every quarter. The amount was initially determined by the total trading volume in BNB per quarter. However, that calculation method was slightly adjusted to speed up the destruction process. The most recent token burn occurred in January 2021, when more than 3.6 million BNB worth more than $160 million was destroyed.

Ultimately, the idea is to destroy all 100 million unsold BNB in ​​this token burn construct. Why? Think of it mainly as a smart way to create extra demand for the token. It is a deflationary system, something that is not exceptional in the crypto world.

Who is the creator of Binance Coin?

BNB was developed under the wing of Binance founder and CEO Changpeng Zhao – better known as ‘CZ Binance’ on his social media. Zhao was born in China and moved to Vancouver, Canada in the 1980s. During his career, he eventually ended up working for a number of different crypto companies, including crypto exchange OKCoin. In 2017, he decided to start his own exchange, after which Binance was born. CZ’s company quickly grew into a leading player in the crypto market, and is now both a billionaire and a known meme fanatic on Twitter.

The native token on the exchange soon followed, with which many important functions on the exchange can be fulfilled. The huge trading volume and good performance of the Binance platform has made BNB one of the major crypto currencies. While “CZ” can be considered the mastermind behind the Binance empire, there will no doubt be many bright minds who helped build the blockchain for BNB and the Binance Chain.

BNB, played on the Binance-exchange web site

The main function of BNB is to pay transaction fees on the Binance exchange. However, the project has developed so spectacularly since its introduction that BNB has acquired a number of core functions within the exchange. A small summary of different uses of BNB within the Binance frameworks:

 You can trade BNB on the exchange, or use it as a means of payment, just like other cryptocurrencies. Of course, it is also suitable as a speculative investment.

 If you pay your transaction costs on Binance with BNB, you get a significant discount on those costs. Handy, because then you automatically make sure you have a little bit in your wallet!

 Referral proceeds are paid in BNB. That income is automatically transferred to your account if you have referred someone to the exchange with your code. For that, the person has to perform transactions, because Binance pays you up to 20% of the trading costs as a thank you for delivering extra turnover. You can also return a part to your friend or acquaintance, or make different distributions with multiple codes. That’s practical!

 BNB can be used to claim new coins on the so-called Launchpad of the Binance exchange. There, new or upcoming projects can apply to be admitted to the Binance platform. With the necessary bells and whistles, the new addition is then announced, and users can register to be the first to buy that coin. You do that (you guessed it) by depositing BNB tokens at launch

How do I get BNB?

Where in the beginning BNB was only available on Binance itself, it has now grown into one of the leading coins in the crypto world. As a result, the availability of BNB on other exchanges has also grown considerably and you can now also purchase or store BNB tokens outside of Binance.

As mentioned, BNB is also seen as a valid collateral by lending platforms such as Nexo, so that you can earn revenues with your tokens even outside of Binance. You can of course buy them for that, but we also mentioned the possibility to earn referral income at Binance. If you don’t want to wait for your grandmother or sister to start trading on the exchange, you can probably buy tokens on Binance itself via the button below.

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