Guess what! The entire cryptocurrency market has been taken off and you don’t want to miss out on this buying opportunity which could be life-changing? Furthermore, you are looking for a more in-depth analysis of this Binance coin? You are in the right spot! In the next 5 minutes, I’ll explain why this young altcoin could be it and show you some benefits.
What is Binance Coin(BNB)
BNB coin can be best described as a native token which only exists on the Binance Exchange. As a result of being a native token, this BNB coin has multiple functions within the cryptocurrency exchange. The number of use cases is growing rapidly but the most important are:
- Fueling transactions on the chain
- Paying for transaction fees
- Buying IEO tokens with it
- BNB Staking in wallet
- Pay by credit card
- Pay travel expenses
Why Binance coin has so many uses cases? One of the main reasons is that it’s an ERC-20 token. As a result, this token is entirely compatible with the Ethereum Blockchain network and can be used as a smart contract.
Binance Coin in 2019
Binance Coin (BNB)has already had an incredible start in 2019, increasing from $6 to almost $38 in just a few months. This type of return hasn’t been seen for a very long time in the crypto space which is still in an accumulation phase.
BNB currently sits within the top 10 cryptocurrencies by market cap, and has a very high volume due to Binance pushing the use of their native token.
Why did this young altcoin rise so fast? It’s very hard to say but I think the main reason comes from the massive growth in volume the entire crypto exchange experienced. Back in 2017, right after the exchange was launched it gained a lot of popularity among bitcoin traders. As a result, it grew within 1 year to one of the largest cryptocurrency exchanges out there.
What is BNB coin exactly
BNB has a total supply of 200 Million coins and is actually an ERC-20 Token – meaning it runs on the Ethereum Blockchain – and is compatible with MyEtherWallet and all other ERC-20 Token wallets.
BNB is Binance’s native token, and performs many functions on the exchange and throughout the ecosystem.
What is it used for?
On the Binance trading platform the BNB token can be used for trading and by doing this one has a discount of 25% on trading fees compared to BTC or USDT.
Binance have very cleverly (and recently) introduced their launchpad ICO platform where users can invest directly in vetted ICOs on Binance. Binance have changed the rules to a lottery based system where users will be randomly selected to participate in the ICO’s, but there’s a catch; they have to own BNB coin.
Binance Coin & Burning mechanism
Back in 2017, Binance initially created 200 Million BNB tokens. They plan to burn a total of 50% of the initial supply which is exactly 100 Million. This burning will be done once a quarter and depends on the amount of trading volume. The most recent burndown event happened back in July 2019, when $26 million in value was being burned. It’s important to know that these burning events are recorded on the Blockchain.
What are the Benefits of Binance Coin
Why Binance coin has so many benefits? I’ll try to explain in further detail here why this promising altcoin could be a rising star. Currently, it’s ranked at number 6 on Coinmarketcap.com, but with so many developments and investor capital flowing in, it could be a real Ethereum competitor soon! Right now I’ll give you the main benefits of this promising altcoin.
1. Trading fees
One of the main benefits of BNB is the discount traders can get when committing orders on the exchange itself. The actual default fee every trader get is set to 0.1% per committed trade. This is by far the lowest fee I know compared to other cryptocurrency exchanges. Of course, there are always exceptions, but I only know exchanges who arrange ‘low fee scheduled periods’ with lower exchange rates. Binance has a default policy to set trading fees at 0.1% which is very cheap!
But there is more and that is why Binance coin was being introduced by its founder Changpeng Zhao. If you hold a balance of BNB coin then you automatically pay fees in BNB when trading. Why is this a benefit? Currently, BNB holders get a 25% discount over the default trading fee of 0.1% on every trade they make.
Fees continued at 25% & margin trading
Back in 2017, when BNB coin was being introduced the actual plan was to reduce the discount for BNB holders every year. As a matter of fact, the first year BNB holders got a discount of 50%! and was reduced to 25% in 2018. Currently, the discount remains on 25%, because recently Binance did an announcement that the 25% level will be continued this year.
Also, in June 2019, Binance made margin trading possible on their trading platform. From now on, more advanced traders can profit from the high trading volumes on Binance and take some extra risk with margin trading. Holding a balance in BNB gives you an extra benefit(50% discount) with trading fees at 0.01%.
|Good to know|
|If you are a US resident you have to pay attention. In September 2019, it isn’t allowed for them to trade on the regular Binance exchange. Don’t panic because a new one will be opened soon.|
|Binance regular exchange(Binance.com)|
|Binance Jersey(Best for European/GB residents)|
2. Binance Launchpad
Next benefit Binance Coin brings is it’s extremely innovative platform called Binance Launchpad. It works like this: Investors can participate in ICO’s or Dapps on the platform. In contrast to other ICO programs launched in the past, Binance with its own token platform brings benefits. ICO projects launched earlier, had to deal with a lot of regulation like know your customer programs(KYC).
The advantage with Binance is that investors can participate anonymously but there is only 1 condition: investors have to own the BNB coin token. A big advantage for companies who start an IEO token at this platform is the potential reach to millions of investors who are trading at Binance daily. Also running your token on this platform gives the companies a head start compared to other blockchain projects existing in the market. The most important reason for this is that it’s very hard for these projects to get listed on Binance. Also, this trading platform is one of the biggest exchanges in the world and has a big market share in the total market.
In my opinion, Binance is handling business very smart by allowing companies to start ICO’s on their platform with the only condition to own the BNB token. With every new ICO that is launched on Binance, there is automatically demand in the BNB coin. This will drive the price of the BNB coin to the moon, which already happened in Q1 and will continue to grow further in 2019 and beyond.
3. Burndown rate of BNB
Another important reason why Binance coin has benefits is that Binance uses a burndown policy for their coin. Each quarter Binance will use 20% of their profits to buy back BNB altcoin. After buying back BNB they will burn these BNB altcoins so the total supply will be reduced.
They will continue doing this until 50% of the original supply has been burned and an amount of 100 million coins will be left. This deflationary policy will automatically result in rising prices for BNB over time just like the mother of all coins, Bitcoin, did in the past. So when the bull finally returns in the alt coins market, BNB altcoin will profit more because of the reason mentioned above.
4. BNB coin gains a lot of popularity
Last in the list, I want to mention the immense popularity Binance coin gained in the past few months among traders. Like I stated above, BNB coin has reached the 6th place on Coinmarketcap and has lots of potential to grow further. As a result, starting cryptocurrency exchanges, and even the bigger ones, have listed BNB alt coin(which is originally a native token) on their exchange. Good examples of cryptocurrency exchanges which have listed BNB coin are:
Other big exchanges like Bitfinex, Kraken or Coinbase have followed the example of Binance by introducing their own native token. It makes sense to copy a successful strategy of a competitor, but I doubt if these exchanges will generate the same amount of trading volume as Binance did with their native Binance coin.
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