Undoubtedly, the cryptocurrency revolution has changed the face of transactions, businesses, wealth acquisition, investments, and other crucial areas. Consequently, several crypto projects have sprung up recently, introducing different crypto coins and tokens and what they represent. One of such crypto tokens is the Binance Coin (BNB). This page, in its succeeding subsections, goes on to examine the question "what is BNB?"
BNB is traded on the Binance Dex and operates only on the Binance Chain and can be used to serve many purposes, including trading, payments, and transactions. In a nutshell, this page focuses on examining the basics of BNB. It explores its antecedence, features, advantages, disadvantages, and usages.
What is BNB
Binance Coin or BNB is a cryptocurrency traded on the Binance exchange with the symbol BNB. It is owned and issued by Binance Exchange, a global exchange where volumes of cryptocurrencies pairs are traded against each other every day.
BNB used to run on the Ethereum blockchain, ERC 20, but it now operates on the Binance Chain, its native blockchain. It was launched in July 2017 to serve as a utility token for discounted trades at its Initial Coin Offering.
By operating on its native blockchain, BNB has become more functional. As such, operations, including the management of numerous transaction apps, can be carried out. You can now shop directly or pay for flight booking and other online services directly via the Binance Chain.
What's more? BNB has a rigid maximum volume of 200 million tokens. At its ICO launch, about 20 million (10%) tokens were offered to angel investors, while 80 million tokens (about 40%) were offered to its founding team. However, the volume keeps reducing due to the regular BNB burning events.
BNB, like other cryptocurrencies, offers numerous upsides compared with fiat currencies. The arguments for the BNB are below:
- Speedy transactions - BNB lets you swiftly transact on the Binance Chain. You can easily pay for goods and services. The interesting part is that all transactions are processed within a split second.
- Increased Accessibility - Because BNB is built on smart technology, it can be used for transactions where the fiat currency is restricted. This is one benefit of all cryptocurrencies: they can be used outside the traditional banking system to process funds.
- Security - Processing transactions with crypto is safe and heavily secured since they are built on blockchain. BNB is no exception. However, your tokens might be compromised if someone gets access to your wallet's private key.
- Privacy - To transact with BNB, you don't need your personal information. The only thing required is your wallet's private key or address for authenticating buys and sells.
- Spot trading - BNB is one cryptocurrency that can be traded against many cryptocurrency pairs. You can't do this with your fiat currency. To trade on the Binance network, you have to convert fiat into BNB. BNB can be converted back to desired coins or tokens after trading.
The downsides of transacting with BNB include the following:
- Price volatility - Like all cryptocurrencies, BNB is affected by several market forces that affect its price. BNB may experience an upward or downward turn in its value depending on the currents.
- Cyberattacks - Binance hosts thousands of traders. Thus, it's the perfect target for cybercriminals who are always on the lookout to take advantage of any little crack.
- Restricted to Binance exchange - BNB cannot be traded on any other blockchain except Binance. For instance, to use it on the Bitcoin blockchain, it has to be converted to Bitcoin. Also, to use it on the ERC 20 chain, it has to be converted to any valuable token on the chain.
How was BNB created
BNB was initially created on the ERC-20 chain. After distributing its tokens among crucial stakeholders and participants, 100 million units were offered to the public. The issue price was 1 BTC for 20,000 and 1ETH for 2,700.
However, in 2019, Binance launched its own native blockchain. This was called the Binance Chain. Consequent to this, BNB became the first native cryptocurrency of the Binance Chain. Binance did a swap to replace the BNB ERC-20 with the new BNB token. Now, BNB can be used for payments and other transactions on the Binance chain.
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How BNB works
BNB is a digital asset used mainly to trade. Its prices can rise and fall depending on several market factors, including forces of demand and supply, investor influence, regulations, and competition.
You can also hold BNB in any compatible wallet to be used for transactions, provided the other party can also receive BNB.
BNB is equipped for operations on both the Binance Chain and the Binance Smart Chain. But that's on a more technical level. The Binance smart chain complements the Binance chain to execute smart contracts. It can handle complex developer functions. It also synchronizes perfectly with the Ethereum Virtual Machine (EVM).
However, whether you interact with Binance Chain or Binance Smart chain, payment can only be made with BNB.
How to get BNB
There are two ways to get BNB tokens. You may either mine them or buy them. Let's take a sneak peek into both processes.
This is a complex process that entails extracting BNB from the blockchain. Except you have the technical knowledge, it's not an easy task to undertake.
There are several sites online offering to let you mine BNB by playing random online games or performing some activities. That's not real! It takes far more than a random game to mine BNB tokens.
Buying is a pretty easy task that lets you convert your fiat currency to BNB. It's the fastest and easiest method to get BNB. You can buy directly from the Binance crypto exchange with your credit cards. However, ensure you're not violating any jurisdictional laws by buying BNB tokens.
How to store BNB
You need a legit crypto wallet to store your Binance tokens online, on the cloud or on a hardware device. You can download several Binance coin wallets to keep your BNB tokens intact. Some of the top Binance coin wallets include:
- Ledger Nano S hardware wallet
- Trezor Model T hardware wallet
- The Trust Mobile Wallet
- Enjin Wallet for mobile
- Trubi Wallet (Desktop)
- Guarda Wallet (Multiple Devices)
- Coinomi Wallet available for desktop and mobile
- Atomic wallet available for desktop and mobile
- Exodus Wallet available for desktop and mobile
Alternatively, you may use the Binance Chain Wallet, the official online wallet for the Binance blockchain. It's specially built to hold BNB tokens. It can hold other coins as well because it is integrated with the Binance Decentralized Exchange (Binance Dex), the comprehensive marketplace for cryptocurrency trades.
Upon creating a new wallet, you'll be issued a keystore file that contains your unique wallet identity. This is what you need when buying or selling BNB or other tokens. You also have to set up a unique password, apart from your wallet key.
Most importantly, you need to save your mnemonic seed code somewhere safe so that you can restore your wallet should you lose it. It's advisable not to save your mnemonic code on any digital device. Rather, write them on a notepad and keep it safe.
It's also important you keep your Key safe and prevent it from getting into the wrong hands.
How to use BNB
BNB can be used in the following ways.
BNB is the only acceptable token on the Binance Chain. Even if you want to trade other coins or tokens on Binance Dex, they must first be converted to BNB. After conversion, you can use BNB to transact on the Binance exchange.
You can also use BNB for sorting different bills on the Binance blockchain. You can pay for shopping, flight tickets, hotel reservations, and whatever provided they are listed on the Binance chain.
For holding BNB, you get certain discounts which you can use to pay for trading on Binance Exchange.
Start investing in BNB today
There is much scary news surrounding cryptocurrency today. But it's not as bad as that! Crypto has its fallouts but can be tapped into to secure better wealth possibilities. BNB allows you to tap into the many benefits of cryptocurrency. Leave your doubts behind and start investing in BNB today!
Bitcoin Coin or BNB is a cryptocurrency traded on Binance exchange with the symbol BNB. It's the native coin of the Binance chain.
Binance Coin can be used for trading on Binance DEX. It can also be used to pay bills and perform other transactions on the Binance chain.