There are a huge number of crypto-assets in the market. The rise of a multitude of cryptocurrencies is a bellwether of a genuinely interested masses. But not all of them can be perceived legitimate.
Beyond Bitcoin, several digital assets have emerged with unique, viable use-cases. There is another cohort of digital assets called ‘exchange tokens’ that aims to accomplish multiple purposes.
One of the world’s largest cryptocurrency exchange, Binance has also jumped into this bandwagon with the issuance of native token – Binance Coin [BNB]
An exchange token is essentially a digital asset that is native to a particular crypto exchange. These assets are created due to a variety of reasons. It can be to enhance a cryptocurrency platform’s liquidity, incentivize trading activity, or even enable an exchange’s community governance process.
In short, the main objective of the exchange tokens are to boost the operations of the exchange and its ecosystem.
Binance Coin [BNB]
Binance Coin [BNB] was rolled out through the Initial Coin Offering [ICO] that took place in mid-2017. The exchange token originally started as an Ethereum-based [ERC-20] token that subsequently shifted to its own custom blockchain called Binance Chain as well as Binance Smart Chain.
Hence, there are three different forms of BNB. One is the BNB ERC-20 on the Ethereum network, second is the BNB BEP-2 on the Binance Chain, and the third is the BNB BEP-20 on the Binance Smart Chain [BSC].
As part of the ICO that took place from the 26th of June to the 3rd July 3rd, 2017, BNB were distributed among various participants. The founding team was allocated 40% BNB tokens, the Angel investors handed out 10%, while 50% was given out via public sale. With this, the crypto exchange Binance secured a total of $15 million in Bitcoin [BTC] and Ethereum [ETH].
Out of the total funds raised, 35% was assigned to upgrading the cryptocurrency exchange; 50% was allocated for the purpose of branding, marketing, and creating awareness among the new participants in the Binance ecosystem. The remainder 15% was used as a reserve in the event of any emergencies.
In addition, BNB undergoes a process called Coin Burn in which Binance destroys the token held in its treasury. This periodic event ensures that the supply of the token remains finite, making it scarce and hence, more valuable.
What is Binance Coin [BNB] used for?
Binance Coin [BNB] has a myriad of use-cases both within as well as outside the Binance ecosystem. Some of them are as follows:
1. BNB can be used for the purpose of paying transaction fee on Binance exchange. The users, on the other hand, can also receive fee discounts as a result.
2. Can also act as a form of payment for crypto credit card bills on various platforms.
3. BNB can be used to purchase and sell a huge variety of other digital assets available.
4. Due to the underlying blockchain technology and the security model, BNB is quite safe and secure.
5. Can also be used to buy multiple, separate products including Staking, Launchpool, BNB Vault, or Liquid Swap via Binance Earn to earn profits and open a new source of passive income.
6. BNB has been driving the Binance DEX and many applications that are running on top of the BSC.
7. Beyond its services to the Binance exchange, BNB can be used to buy goods and services over a network of service providers and establishments.
8. BNB can be used to pay for shopping, bills, mortgage, using the crypto-based Visa debit card called Binance Card.
9. Can also be used as collateral to access crypto loans. There are no hidden fees or costs and users can borrow different crypto-assets.
10. BNB can be used in gaming websites for the purchase of lottery tickets, participation in sports-related games among others
11.Since BNB’s fees are much smaller than Ethereum’s, Binance Coin has carved a niche for itself in decentralized finance (DEFI).
Is Binance Coin [BNB] a good investment?
Binance is one the largest cryptocurrency exchanges in the world. Its native utility token, BNB has use cases and utility beyond its own native blockchain. It has a wide range of advantages over the other cryptocurrencies and happens to be one of the most trusted coins out there.
However, it is important to note that BNB is an asset with a high risk and high reward investment ratio. Hence, traders need to understand the market and research before investing in crypto-assets.
Where can I buy Binance Coin [BNB]?
There are three ways in which users can buy BNB.
Investors can purchase stablecoins that are listed on Binance exchange by wiring money from their account to the token providers. In addition to this, market participants can also use these stablecoins to buy BNB on Binance exchange.
Trade Other Cryptocurrencies
Users can also trade cryptocurrencies to gain BNB. The cryptocurrency exchange, Binance supports the deposit of over 150 digital assets many of which can be used to exchange for an equivalent value of BNB.
Credit Or Debit Card
Users can directly avail the exchange token using a credit card on Binance. The platform provides several ways to purchase the BNB using debit card or credit card [ both Visa or MasterCard].
What is the best BNB wallet?
There are several wallets in the market. Here are top five BNB wallets to consider:
1. Binance Chain Wallet
This is the official wallet of BNB tokens after its roll-out on the mainnet. Binance Chain wallet enables its users to store their coin on Binance DEX. In order to create a wallet, a user is required to set up a password and keystore file that unlocks their wallet. There is a secondary mechanism at place to add privacy which involves a 24-words mnemonic phrase and the private key.
2. Ledger Nano S
This is undoubtedly one of the popular wallets in the industry. Apart from BNB, it supports well over 1000 tokens. Ledger Nano S cryptocurrency hardware wallet, allows users to store, transfer, receive as well as send BNB tokens.
3. Trust Wallet
This decentralized wallet is one of the most trusted wallets in the Binance ecosystem. The exchange had acquired the platform in June 2019. Trust wallet lets users not only manage their assets but also allows you to take control of their private keys. It is built for both novice as well as expert users. Herein, users can safely store their BNB tokens.
4. Enjin Wallet
The Enjin wallet supports several crypto-asset including Binance Coin, BEP2, ERC-20, as well as ERC-1155 and ERC-721 blockchain assets. This mobile wallet is available for Android and iOS phones. Enjin’s security is determined by the use of innovative technologies such as Enjin Secure Keyboard, two-factor encryption and it transforms your mobile phone into a hardware wallet.
Trezor Model T is an advanced crypto hardware wallet that lets users store BNB. It is touted as one of the most secure and anonymous devices in the ecosystem and supports over 600 assets for the purpose of storing, receiving as well as transfer.
Binance Coin [BNB] has gained massive traction. This can be attributed to its association with Binance cryptocurrency exchange and the multitude of avenues that the platform has generated to increase the token’s utility since the launch of its ICO.
BNB is still a cryptocurrency and investors seeking to make a quick buck should tread the space carefully and should always DYOR.