What is Binance Coin? Cryptocurrencies explained by Blockchart.io
With the steady increase of interest in cryptocurrencies, it was only a matter of time until something like the Binance Coin (BNB) came along! BNB isn’t just another cryptocurrency, it powers the whole Binance Exchange; a revolutionary (and profitable) means of trading different cryptocurrencies. Incidentally, it is the largest cryptocurrency exchange to-date, and with good reason too!
What is Binance Coin?
Binance can refer to either the Binance Exchange itself or the currency itself, BNB. At the moment it runs on the Ethereum Blockchain platform, but there are plans for Binance to develop its own, independent Blockchain. The Binance Exchange acts as a cryptocurrency exchange where users can use different cryptocurrencies to trade for other cryptocurrencies. It does not support the use of a fiat currency to perform trades, so you would need to already own a cryptocurrency to trade. While it is not necessary to own BNB in order to use the Exchange, but there are several incentives to encourage the use of BNB, in fact these incentives have helped to make BNB a strong enough currency to stand on its own.
BNB functions like most other cryptocurrencies and it is used to pay for services on the Binance Exchange, such as trading and listing fees. The amount of BNB in circulation is also carefully designed to be stable and retain its value in the future. In order to encourage users to use BNB during exchanges, a discount of 50% is given to those using BNB to trade during the first year, with this discount gradually diminishing over the course of 5 years. It is a powerful cryptocurrency, with the popularity of the Binance Exchange only adding to its value.
Why use Binance Coin?
The main reason to use BNB is to make full use of the Binance Exchange while trading other cryptocurrencies. While the discounts themselves are not something to be overlooked (50% in the first year, 25% in the second year and 12.5%, 6.25% in the following years), there are other reasons for investing in the future of cryptocurrency exchanges.
The Binance Exchange is one of the few places where interested parties can invest in much younger cryptocurrencies. Several of these are based in Asia, where investment opportunities and exposure are somewhat limited from the West. With this being said, it is easy to understand why, and how influential, Binance’s partnership with Uplive really is. Uplive is one of Asia’s high-end, live video streaming service, with a client base of over 20 million. This, alongside other partnerships such as with the platform and VISA debit card of Monaco, have helped to give BNB a considerable edge in the cryptocurrency market.
Binance has pushed the envelope in terms of exchange software, having streamlined its system to cater for 1.4 million trades per second. The trading fee on the Binance Exchange is also only a mere 0.1%. This, besides a user-friendly interface, support in over 8 different languages and its sheer simplicity, has helped to make Binance one of the busiest, safest and most competitive exchanges to date.
How Binance Coin works
The Binance Exchange matches users who wish to buy a particular cryptocurrency at a particular rate with other users who are willing to sell at that specific rate. Only once the match is complete does the Exchange take its 0.1% commission from the involved parties. Given the popularity of cryptocurrencies, thousands of people make trade requests per second. Unless the software can keep up with these demands, several users might miss capital opportunities, hence why Binance’s engine is designed to handle over a million trades per second.
The way the BNB coin is designed to maintain value is particularly ingenious. The cryptocurrency has a limit of 200 million BNB tokens, however, in order to combat depreciation (as the discounts from using BNB on the Exchange decrease, so too does the value of the currency itself) Binance spends 20% of its profit to repurchase BNB and “burn” it. The goal of this is to eventually decrease the amount of BNB in circulation by 50%, until only 100 million are left. This reduction of supply will help to increase demand and the value of BNB after fee rebates have decreased.
How to buy Binance Coin
When trading BNB, there are several platforms which you can use. It is strongly recommended that you find a service which offers the best exchange rates and an established track record to ensure safe and secure transactions. Changelly is a popular cryptocurrency exchange which has been providing the ability to instantly and seamlessly exchange over 100 altcoins at the best market rate or buy them using a bank card for over two million registered users.
Binance is the main way for individuals who seriously wish to invest and capitalise in the world of cryptocurrencies. While the Binance Exchange does not allow the use of fiat currencies to trade, this hasn’t stopped it, and its own cryptocurrency, from dominating the scene and creating one of the first, sustainable decentralised exchanges!