What Is BNB Coin (BNB) & How It Works: Full Review Of 2023

As cryptocurrency investment becomes more popular, many people seek opportunities to get involved. New virtual currencies are constantly being created, and BNB coin is one of the most prominent. But what is BNB coin, and do you know enough about it to make an informed investment decision? This article will provide you with the information you need to decide whether or not to invest in BNB coins.

What is BNB?

The cryptocurrency token that drives the BNB Chain ecosystem is called BNB. One of the world’s most widely used utility tokens, BNB may be used in various applications and use cases and traded like any other cryptocurrency.

Background of BNB

In July 2017, the Binance exchange launched a token called Binance Coin through an initial coin offering (ICO). BNB, the token used in the Binance and Binance Chain (BEP-2) ecosystem, was established on the Ethereum Blockchain with the ERC-20 standard between 2017 and 2019.

As of 2020, Binance has shifted its focus to using Binance Smart Chain (a blockchain built on Ethereum’s EVM virtual machine) as its primary blockchain. BSC (BEP-20) is the main focus of Binance now, rather than Binance Chain (BEP-2).

Binance and CZ stated they would establish BNB Chain in February 2023 to develop MetaFi. This blockchain would likewise use BNB as the gas cost but will now be known as Build and Build instead of Binance Coin.

How Does BNB Work?

BNB utilizes ERC20 tokens, which can store and hold value, and is constructed on the Ethereum network. Tokens cannot be mined since they were pre-mined and distributed through an initial coin offering (ICO). On the Binance Exchange, tokens in use are used for discounted trading. The initial year’s discount rate was set at 50%, and it will be reduced by half each subsequent year.

In five years, there will be no discount that will affect the value of the token. Binance has been buying back tokens and destroying them to reduce the supply to counter the value depreciation. The cryptocurrency exchange plans to eliminate half of the tokens in circulation.

BNB also has an incarnation on the Binance Smart Chain (BSC), Binance’s very own smart contracts blockchain.

What Problems Does BNB Solve?

The Binance Coin (BNB) is the native cryptocurrency of the Binance Chain blockchain platform, developed by Binance and its community. Binance Coin is used to pay fees on the Binance Chain and other costs such as listing and exchange fees. Binance Coin can also pay for goods and services on the Binance platform.

The BNB Team

Binance is currently the world’s largest exchange, with a team of experts spread across the globe. However, Binance has two of the most prominent leaders in the industry, ChangPeng Zhao (Nickname: Uncle CZ) and He Yi.

CZ, or Changpeng Zhao, is the founder and CEO of Binance, the world’s largest cryptocurrency exchange by trading volume. Before Binance, CZ was a member of the Blockchain.info development team and the chief technology officer (CTO) of OKCoin. As of January 23, 2023, CZ was estimated to be worth $96 billion by the Bloomberg Billionaires Index, making him the wealthiest person in the crypto space and the 14th richest person in the world.
He Yi is one of the people who started Binance and is also the company’s Chief Marketing Officer. She has been working in cryptocurrency since 2014. At first, she was in charge of OKCoin’s branding and marketing strategy. Later, she became Vice President at Yixia Technology, a top mobile video tech company.

CZ and He Yi were active and experienced in the blockchain and cryptocurrency space before they founded Binance. Before that, they were colleagues at OKCoin, one of the major exchanges.

Partnerships

Binance is already a big player in the crypto market, with many partners in the market, including direct and indirect partners.

Here are some notable Binance partners:

Chainlink: October 2019 – Binance and Chainlink, an oracle provider, have announced that they will work together to improve DeFi applications. Binance wrote a long and detailed blog post about the role of oracle providers in the DeFi ecosystem and how that would help it overgrow.
FTX: December 2019 – Binance said it would invest strategically in FTX, an exchange for cryptocurrency derivatives. This meant putting money into stocks and taking a long-term bet on the FTX token. Binance wants to help FTX grow sustainably, which would suit the partnership.
Chainalysis: October 2018 – Binance and Chainalysis said that Chainalysis’ compliance solution was now available worldwide. The partnership aims to “help solve problems where regulators, cryptocurrencies, and traditional financial institutions meet.”
CipherTrace: November 2019 – CipherTrace and Binance have announced a partnership in which CipherTrace, an expert in cryptocurrency intelligence and blockchain security, will support the Binance Chain blockchain. The CipherTrace will give the Binance Chain AML controls that are good for institutions.
Advcash: November 2019 – Binance and Advcash said they would work together to help more people in Turkey use cryptocurrencies. The EUR, RUB, UAH, and KZT currencies could be used to send and receive money through the new fiat gateway.
Banxa: January 2020 – In another big step forward for fiat gateways, Binance and Banxa said they would work together to add gateways for the AUD, GBP, and EUR currencies. This lets people who use these currencies to trade on Binance buy cryptocurrencies with these currencies.
Amun: October 2019 – The partnership between Binance and Amun aims to add a BNB Exchange-Traded Product to the SIX Swiss exchange. This made it possible for Amun to offer more ETPs, and BNB is now part of a select group.

BNB Token

Basic Information About BNB

Token name: Binance Coin
Ticker: BNB
Blockchain: BNB Chain
Consensus: Tendermint
Algorithm: Delegated Byzantine Fault Tolerance (dBFT).
Token Type: Utility, Governance
Initial Supply: 200,000,000 BNB
Total Supply: 161,337,261 BNB
Circulating Supply: 161,337,261.09 BNB

Token Allocation

The total supply of BNB coins was originally 200,000,000 BNB, and it was distributed as follows:

ICO: 50% – 100,000,000 BNB.
Binance Team: 40% – 80,000,000 BNB.
Angel Investors: 10% – 20,000,000 BNB.

Binance’s coin burning mechanism destroys coins, making the current total supply of BNB only 170,532,785 BNB. This reduces the available supply of BNB, creating buy demand and helping the currency grow stronger.

Token Sale

Binance Coin was created through an initial coin offering (ICO) in July 2017. The ICO distributed BNB tokens to various participants, including angel investors and the Binance founding team.

Here’s a quick rundown of how BNB tokens were first distributed:

Founding team: 40% (80 million BNB)
Angel investors: 10% (20 million BNB)
Public sale: 50% (100 million BNB)

Binance’s public token sale was a success, with all 100 million BNB tokens selling out at 15 cents each. The company raised a total of US$15 million in bitcoin and Ethereum.

Out of the $15 million raised:

$5.25 million was allocated to upgrading the Binance platform and exchange system
$7.5 million was allocated for Binance branding, marketing, and education of new innovators
$2.25 million was used as a reserve in case of any emergencies or unprecedented circumstances.

Price of BNB Today

The current price of Binance Coin (BNB) today is $21.79 USD.
Market Cap: $46,038,286,628
24h Volume: $1,626,697,748

What is BNB Used For?

The Binance Coin is not like other cryptocurrencies; it offers several uses that go beyond the Binance exchange, such as:

Trading: Binance coins can be traded for other cryptocurrencies on various exchanges, depending on the restrictions set by the exchange. However, some users have found ways to trade Binance Coin for other cryptocurrencies without using an exchange.
Fees for trading on the Binance Exchange: You can use BNB to pay for transactions on the Binance Exchange and receive a discount.
Credit card payments: You can now pay your crypto credit card bills with BNB on Crypto.com.
Payment processing: Merchants can allow customers to pay with BNB, offering more flexibility in payment methods.
Booking travel arrangements: BNB can be used to book hotels and flights on select websites, making your travel planning a breeze.
Entertainment: BNB provides various services in the entertainment industry, from paying for virtual gifts to buying lottery tickets.
Investment: Binance Coin allows investors to invest in stocks, ETFs, and other assets using several platforms.
Loans and transfers: Binance Coin can be used as collateral for loans on specific platforms, and some apps allow users to split bills and pay friends and family.

How to Buy BNB Tokens?

To buy Binance Coin, you need to create an account on a crypto exchange allowing trading BNB tokens. Cove Market recommends you should choose Binance, Coinbase, FTX, Uniswap. Then follow the steps below:

Step 1: Buy a stablecoin like USDT on P2P feature or with your credit cards.
Step 2. Search an BNB pair and choose the amount of BNB or fiat currency you wish to spend.
Step 3: Click “Buy” to purchase.
Step 4: Check the deposit in your exchange wallet.

Coinbase vs Binance: Which Crypto Exchange is Best?

How to Store BNB Coins?

For the time being, there are two ways to store BNB coins. You can keep them on the Binance Exchange or transfer them to a third-party wallet.

Create an account and deposit your coins if you want to store your BNB coins on the Binance Exchange. Once your coins are deposited, they will be automatically stored in your Binance wallet.

However, to store your BNB coins in a third-party wallet, you must first transfer them from the Binance Exchange to your wallet. Currently, three wallets support BNB coins: Trust Wallet, MetaMask, and Enjin Wallet.

Once you have transferred your BNB coins to one of these wallets, you can store them safely offline.

Read morre: Best Crypto Wallets For Storing Coins In 2023: Hot Wallets & Cold Wallets

Prospect Of BNB

In the coming years, it is anticipated that BNB’s price will reach the following benchmarks:

End of 2023, following the 2021 bull run, the Binance exchange is anticipated to expand, and increased demand for BNB will drive the asset to a high of $573 in 2023.
End of 2025, BNB will have several uses by 2025, increasing demand and pushing the currency’s price to a maximum of $2,394 by then.
End of 2030, Binance Coin could reach a record price of $15,622 as the BSC becomes the top blockchain for smart contracts.

FAQs

How to earn BNB tokens?

There are multiple ways to earn BNB tokens. One way is to participate in the Binance referral program. Another way is to stake Binance Coin on the Binance Exchange.

Should you invest in BNB?

Investing in BNB in 2023 can be a great way to maximize your profits in a short time, but you should be aware that it is a highly volatile cryptocurrency that can also lead to significant losses.

Is investing in BNB risky?

Despite the risks, investing in Binance Coin could be profitable because no asset is 100% safe. Cryptocurrencies, in particular, are highly volatile and unpredictable.

Why is BNB popular?

There are a few reasons why BNB is popular.

First, it is one of the world’s most established and well-known exchanges. This gives users peace of mind knowing that their funds are safe and secure.
Second, BNB has a very user-friendly interface that makes it easy for even first-time users to buy and sell cryptocurrencies.
Finally, BNB charges meager fees, which makes it an attractive option for those looking to trade cryptocurrencies.

Is it the right time to buy BNB?

This is difficult to answer. Binance Coin (BNB) has been on a tear lately, gaining over 50% in the past month. However, as with any investment, it is essential to do your research before investing.

What can I buy with BNB?

BNB can purchase various items on the Binance platform, including but not limited to: cryptocurrencies, ICO tokens, and other digital assets.

How is BNB different from other blockchain projects?

Binance coin (BNB) is the cryptocurrency of the Binance platform. Binance’s goal is to be a decentralized exchange, and it appears to be well on its way to achieving this. BNB has several advantages over other blockchain projects:

First, it has a much lower transaction fee than most other cryptocurrencies.
Second, it can pay for goods and services on the Binance platform.
Finally, BNB has a strong team behind it and a growing community.

Can I convert BNB coins to other currencies?

You can use Binance to convert BNB to other assets quickly and easily. Just set the amount and the currency to be exchanged, such as 1 BNB to USD, and press Exchange Now. You can exchange BNB for USDT, Litecoin, Stellar, or other fiat or virtual currencies.

How can I find more information about BNB?

The best way to find more information about BNB is to visit their website.(https://www.binance.com/en/bnb)

Conclusion

The BNB coin is currently a virtual currency with a large trading volume on the market. With the Binance ecosystem expanding, and many applications, BNB will have many opportunities for price growth in the future. Cove Market hopes that understanding BNB and the vital information about the coin can help you make the right decision when participating in the cryptocurrency market.

Disclaimer: The information provided in this article is not investment advice from Cove Markets. Cryptocurrency investment activities are yet to be recognized and protected by the laws in some countries. Cryptocurrencies always contain financial risks.

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