What is Binance Coin (BNB) – introduction
Have you ever heard of Binance Coin (BNB)? This cryptocurrency has recently gained a lot of attention in the cryptomarket. The Binance Coin (BNB) is a coin linked to the Binance exchange and has been responsible for attracting new users to the platform.
The market value is not the only attractive feature of Binance Coin, we can easily say that it is a leading coin in a new segment of cryptocoin created and promoted by the crypto exchanges themselves.
The cryptomarket evolves at a fast pace. There are constant novelties, updates and releases to keep up with. A good crypto investor must be constantly on the lookout for new investment opportunities.
In the following post we shall talk about Binance Coin (BNB). You are going to learn a little about the history of this cryptocurrency, what is its proposal, its main advantages, who should invest on it, as well as how to buy it. Keep tuned!
History of Binance Coin (BNB)
Binance Coin (BNB) was launched in 2017 as an Ethereum (ETH) token. Back then, the currency was widely used by the Binance exchange, hence its name. In addition, the token was used and very much accepted by the users due to its cheaper fees on all transactions and transference.
Later on, in 2019, the Binance token moved to its own platform called Binance Smart Chain (BSC). BSC is a kind of a DeFi (decentralized finance) platform, created with the goal of providing an alternative to other platforms, especially Ethereum.
Platforms such as BSC has gained a great acceptance and popularity due to the natural limitations of famous platforms such as Ethereum and Bitcoin. The problem is that some widely used platforms end up generating higher rates and slower transactions for the users (Have you ever heard about Ethereum? If you don’t know what it is, you should check this text).
Thus, alternative platforms are looked by investors due to the possibility of cheaper rates, greater transaction volume, and greater transaction speed. It was exactly these features that gave Binance Coin a higher visibility.
Binance Coin (BNB) Proposal
Binance Coin (BNB) was created with the goal of facilitating operations that are necessary for the daily life of a crypto investor. With Binance Coin it is possible to pay exchange fees, trading fees, and any other eventual fees charged to the user.
Thus, the payment of several operations can be done only with Binance Coin, what makes the user able to save considerable amounts of money.
In addition, Binance Coin is already widely accepted as a payment method for other services, such as restaurants and hotels. Native coins, as it is called coins specific to a certain platform, such as Binance Coin, have gained a lot of attention among crypto investors due to advantages such as low cost, fast transaction, and other factors. (Do you want to know how the payment method with cryptocurrencies works? Check it out here).
Currently, Binance Coin Smartchain already sum about $26 billion dollars. But first, so that you can understand a little more about the advantages of this coin, in the next section we will talk about all these points.
Advantages of Binance Coin (BNB)
As we’ve commented earlier, Binance Coin, together with the Binance Smart Chain platform, provides many advantages for cryptoinvestors. Among those preferred by investors, we can mention the following:
- Fast and cheap transactions: Binance is known for its cheap fees and the fast transactions. In addition, the BSC platform was built to support a high volume of transactions;
- Higher security: The BSC platform operates on well-known systems by the cryptomarket, such as the smart-contracts and the proof-of-authority (PoA) protocol. These protocols serve to provide a higher degree of security to transactions, as well as to allow faster and more efficient transactions;
- Multi-crypto platform: With Binance Coin it is possible to directly trade more than 150 cryptocurrencies available on the market. This certainly facilitates to purchase and sell assets, as well as to manage one’s portfolio;
- Payment service method: It is possible to pay various transaction fees with Binance Coin. In addition, the BSC platform offers many discounts on transactions. There is even a 50% discount on the trading fee. That is, you pay lower fees when buying Binance Coin;
- Participation in ICOs: The BSC platform also offers its users the possibility to invest in the release of new coins. Thus, the investor has the chance not only to follow the launch of new currencies, but also to actively participate in the trading of the coin.
Taken together, all these features make Binance Coin (BNB) a very attractive cryptocoin for all types of investors. And to understand a little more about how Binance Coin works, let us make a brief comparison in relation to other altcoins.
Binance Coin and other altcoins
Although the BSC platform is based on the Ethereum (ETH) blockchain, there are important differences between both systems. Among them, one of the most important is the fact that Ethereum uses Proof-of-Work (PoW) security protocols, the same used in Bitcoin. Binance, on the other hand, is based on Proof-of-Authority (PoA) security protocols.
In practice, the use of the PoA protocol makes Binance Smart Chain a much more centralized platform than its competitors. For example, in order to mine Binance Coin, first you must apply and be approved by the managers of the platform. (Do you want to know how the cryptomining process works? We have a great guide here).
Also, the tracking of some Binance Coin transactions is not completely public, as it happens with other coins such as Ethereum and Bitcoin. In other words, this means that the BSC platform has a greater degree of control than the usual cryptoplatforms.
In some public statements, Binance CEO and founder, Changpeng Zhao, defended his concept of a CeDeFi (centralized DeFi) as the future of the cryptomarket. According to Zhao, crypto platforms might benefit from a greater degree of control. This type of centralization allows for a greater control over the value of tokens in transaction fees, as well as to increase security of the platform.
Who Should Invest in Binance Coin (BNB)
There is not a unique rule about who should invest in Binance Coin. However, if you are the type of investor who relies on carrying out multiple transactions in a short period of time, Binance Coin may be the ideal for you.
With Binance Coin, you’ll pay cheaper fees and therefore you’ll be able to carry out a good volume of transactions without affecting your profit. It’s always good to remember that fees are one of the central enemies of an investor’s profit. Therefore, being careful with fee costs is essential to guarantee a profitable and successful investment strategy.
All in all, Binance Coin is a suitable coin for any type of investment strategy. It is a low volatility currency and one that can certainly contribute to your cryptoportfolio.
How to buy Binance Coin
To buy Binance Coin you must go through a process similar as of buying any other cryptoasset. If you never purchased a crypto asset before, the steps to purchase it is the following:
- Look for an exchange that intermediates the buying and selling of Binance Coin (BNB). (Still don’t know what an exchange is? Exchanges are financial institutions (crypto-brokers), responsible for intermediating the purchase and selling of cryptocoins. Learn more about it here: );
- Register and create your account;
- Add credit to your account (either the regular coin or any cryptocurrency with which you can make the purchase of Binance Coin);
- Then add a buying order compatible with the market value and wait for it to be executed.
- Once you have the right amount in your account inside the platform, transfer it to your personal wallet. There are already several wallets compatible with Binance Coin, especially in hardware and software versions. It is important to find out which option is best for you. Many well-known wallets are compatible with Binance Coin, such as Enjin, Trezor, Jaxx, Metal Vault, among others (To learn more about the function of wallets for cryptocurrencies, check this text).
If you do not have any past experience with investing in crypto and would like to understand more about how to start investing in this market, we recommend this post.
What is Binance Coin (BNB) – conclusion
At this point, you should be more informed about what Binance Coin is and what its main features are. So that you can recall the main points of the text, here they are:
- Binance Coin (BNB) is a cyptocoin created with the goal of facilitating and reducing the cost of crypto operations and transactions;
- BNB is linked to a platform called Binance Smart Chain;
- There are several advantages of using Binance Coin and its Binance Smart Chain platform, such as: cheaper rates, faster transactions, greater security, and many others;
- Unlike platforms like Ethereum and Bitcoin, the Binance Smart Chain platform has a greater degree of control and centralization;
- Binance Smart Chain is a platform with more private and centralizing principles than other platforms,
- Binance founder, Changpeng Zhao, called Binance Smart Chain a CeFi (i.e. a centralized finance) platform.
Before purchasing and investing in any asset, always make sure you learn as much as possible about how that investment works. Also, if you are new to the cryptomarket, start by moving small sums of money and gradually build up.
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