BINANCE

Binance Coin (BNB): 3 minutes to understand the cryptocurrency of the famous exchange

Binance Coin (BNB): 3 minutes to understand the cryptocurrency of the famous exchange

Binance is a cryptocurrency exchange that has become one of the most famous in the world, especially since the Bitcoin bull run of 2017. Two-thirds of the world’s crypto exchanges take place on Binance. The success that prompted the Asian company to launch its own token, Binance Coin (BNB), which, with a market capitalization of $63 million in March 2022, is the fourth most important cryptocurrency.

Binance Coin (BNB): the most important things to know

1 – What is the crypto Binance Coin (BNB)?

  • Basic principle : Born in 2017 as part of an ICO (Initial Coin Offering), Binance Coin is the internal exchange currency of Binance Exchange. In addition to being used to pay transaction fees, the token stands out with a special characteristic: burn.
  • Use : Binance Coin is basically dedicated to settling all listing, exchange or trading fees that a user makes on the platform. By paying commissions through this token, it is possible to obtain discounts of 50% on trading fees in the first year, then 25%, 12.5 and 6.75% in subsequent years.

2 – The project and blockchain behind Binance Coin

  • Project : 200 million tokens were created when Binance Coin was created, but 100 million are retained by Binance to “burn”. Every quarter, Binance thus uses part of its revenue to buy BNB at market price and destroy it to keep the value of the token high. Burning will continue until only 100 million BNCs remain in circulation.
  • Mesh : Binance Coin uses the same blockchain technology as Ethereum (ETH), and adheres to the ERC20 token standard, with a Proof-of-Stake (POS) algorithm. As a fork of Ethereum, the protocol enables the creation of smart contract applications and decentralized finance (Defi) protocols.

3 – Binance Coin (BNB) Analysis and Opinion

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  • Binance Coin benefits from the performance of Binance, which is currently the leading exchange in terms of transactions.
  • The burn will likely eventually increase the value of BNB in ​​circulation.
  • Centralization that allows Binance to intervene immediately in the event of a network attack.
  • Significant discount on trading fees using Binance Coin.
  • Significant popularity among individuals and many partner companies that accept it as a means of payment.

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  • The performance of the token is highly correlated with the performance of Binance.
  • Most of the validators are closely or distantly related to Binance.
  • Almost all BNB stored on Binance, which multiplies the risks for all crypto holders in the event of a hacker attack.
  • The United States is wary of Binance’s status as a “Chinese” company and is closely monitoring its activities. Regulatory and legal risks pose a risk to Binance Coin.
  • Significant centralization, leaving little room for maneuver to the community.

4 – How to earn or mine Binance Coin (BNB)?

Since they were all pre-mined and distributed during the ICO, mining is an impossible activity in the case of BNB. All tokens are already in circulation. To acquire it, you have to go through an online intermediary. Binance of course, since it is the utility token of this platform, but others also offer it (Coinbase, eToro, Bitpanda, etc.)

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