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 celebrated in the world, especially since the Bitcoin bull run of 2017. Two thirds of the world’s crypto exchanges take place on Binance. A success that led the Asian company to launch its own token, the Binance Coin (BNB), which is the 4th most important cryptocurrency with a capitalization of $63 million in March 2022.

Binance Coin (BNB): the essentials to know

1 – What is Binance Coin (BNB) crypto?

  • Basic principle : Binance Coin, born in 2017 as part of an ICO (Initial Coin Offering), is an internal exchange currency at Binance Exchange. In addition to being used to pay transaction fees, the token is distinguished by a special feature: burn.
  • To use : Binance Coin is basically dedicated to settle any listing, exchange or trading fees that a user incurs on the platform. By paying commissions through this token, it is possible to get 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 kept by Binance to be “burned”. Thus, every quarter, Binance uses a portion of its revenue to buy and destroy BNB at market price to keep the token’s value at a high level. The incineration will continue until only 100 million BNCs are left in circulation.
  • Network : Binance Coin uses the same blockchain technology as Ethereum (ETH) and complies with ERC20 token standards, with a Proof-of-Stake (POS) algorithm. As a fork of Ethereum, the protocol enables the creation of smart contract applications and decentralized financial (Defi) protocols.

3 – Analysis and Opinion on Binance Coin (BNB)

The +:

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

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the –

  • The token’s performance correlated strongly with that of the Binance company.
  • Most validators are closely or remotely related to Binance.
  • Almost all BNB is stored on Binance, which increases 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 wiggle room for the community.

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

Since they are 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 broker. Binance of course, because it is the utility token of this platform, but others also offer it (Coinbase, eToro, Bitpanda, etc.)

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