What is the Binance coin?
Binance coin is the digital token of the Chinese based cryptocurrency exchange called “Binance“. The Binance token has been referred to as an Ethereum based token that allows its users to receive discounts on the Binance platform.
BNB is another name for Binance coin. Binance coin or BNB will be used to power the upcoming decentralized exchange.
Binance was created on the Ethereum Request Comment (ERC-20) token standard. It is used as an alternative method for paying Binance trading fees.
The main purpose of the development of Binance coin is to be used to pay for all the fees charged on Binance. Some of these fees include; listing fee, withdrawal fee, deposit fee and any other fee that might be added in the future. Binance exchange gives BNB users a certain percentage of discounts when they use the platform. Let us break down the discounts:
- 50% discount is given to users on the Binance exchange in the first year.
- 25% discount is given in the second year.
- 5% discount is given in the third year
- 5% discount is given in the fourth year
- No discount is given to users on the platform in the fifth year.
Main features of the Binance coin
- ERC-20 standard: Binary coin was created on an ERC-20 token standard. This means that Binance BNB token is easily interchangeable and can also work with Decentralized applications (DApp). The ERC token standard makes it easier for tokens to be compatible to be natively supported by new projects and services. Also, ERC grants voting rights to users on the network.
- Binance coin has been deployed on over thirty exchanges. Also, it supports multiple languages and all devices, offering its users seamless experience.
- About 200 million BNB are being issued. 50% of the total available coins are being issued to Initial Coin Offering (ICO) investors, 40% were given to the funding team, while 10% went to angel investors. As at December 2017, there are over 99 million Binance coins in circulation.
- Binance development team uses about 20% of their gained profit to buy and burn BNB. Their aim is to burn 50% of all BNB in circulation, thereby leaving only 100 million BNB in circulation. The main reason for buying and burning BNB is to create a decentralized exchange where the remaining BNB are used as key base assets and also as a gas on which the platform will run on.
- Binance coin network does not support the trading of crypto assets against flat or traditional currencies. It has a total market capital value of over $180 million, and about $18-35 million are traded dally on the network.
- Community Coin Per Month is a campaign that was launched by developers on the Binance platform. This campaign gives users on the network the right to vote for a coin that would be traded on the platform without transaction fees.
- Binance coin network charges only 0.1% of all transactions that are carried out on the network. Every BNB is valued at $16 per coin.
- Existence of angel Investor: the Binance coin network has a group of investors with multilingual support and a very intuitive and reactive exchange. This investors’ take 10% of the total number of BNB in circulation.
- Binance coin’s development team seeks to make the Binance exchange a fully decentralized one. This means that Binance coins will be used as “gas” to run the platform.
- The network can process about 1.4 million orders each second.
- Difference between Binance coin and other cryptocurrencies
- One main feature that distinct Binance coin and other cryptocurrencies is the fact that is used for payment of service fees incurred in its exchange platform. It is an alternative method or way of paying for transactions that are carried out on the Binance exchange.
- Unlike other cryptocurrencies, Binance coin does not support the transfer and exchange of flat or traditional currencies.
- Binance coins act as a means of payment for services on the Binance exchange, all BNB users on the Binance exchange are entitled to 50% discount for all transactions that will be carried out on the platform in the first year.
- Another difference between Binance coin and other cryptocurrencies is the fact that it has a buyback policy. What this means is that developers’ of Binance will use 20% of their profit to buy and burn BNB in circulation. This is the first time a cryptocurrency development team is adopting that policy.
How and where to buy the Binance coin
Since the network does not support the use of flat or traditional currencies, buying it has become a tedious task. First of all, you need to buy Ethereum or Bitcoin from any exchange that accepts credit cards or bank deposits. After you must have bought either Ether or BTC, you need to look for a crypto marketplace that exchanges BNB for either Ether or BTC. This is the simplest way to buy Binance coin.
Once Binance coin is bought or exchanged for either Ether or BTC, it can be used on the exchange for service fees on the platform. Before transactions are processed on the exchange, users are asked if they seek to use Binance coins as a form of payment for services rendered by the platform.
Binance Coin Pros and Cons
- Gives users discount when they use BNB tokens to pay for transactions on their
- Binance coin offers users the opportunity to pay for services incurred on the Binance exchange with another digital asset instead of deducting transactions fees from their trading balance.
- It charges as low as 0.1% of all transactions that are carried out on the network.
- It is fast, processing about 1.4 million orders each second.
- There is a team if great and innovative developers behind Binance coin.
- The popularity of the Binance exchange means that more and more people will know about Binance coin.
- The buyback policy implemented by developers will result in loss of value of the BNB token.
- Since it is based in China, the regulatory policies and claims of the government might impact negatively on the platform.