Binance Coin (BNB)
Binance Coin (BNB)
What are characteristics of Binance Coin?
Binance Coin’s primary purpose is to ensure simple and fast exchange of cryptocurrencies on the Binance platform, which is one of the largest cryptocurrency exchanges in the world, processing up to 1.5 million commands per second and enabling trades in hundreds of currency pairs. The main advantage of Binance Coin is that if you trade it (that is, make an exchange of a Binance Coin/other currency pair), you will receive a discount on the trading fee. In the first year after registration, this discount is 50%, the next year it is 25%, in the third year 12.5% and in the fourth, 6.25%. This is also the reason why the cryptocurrency exchange Binance is used for large trades.
History of Binance Coin
The history of this token only started being written in mid-2017, but it is characterized by a dynamic increase in growth and activity. The main person behind it is Changpeng Zhao, who established the Binance cryptocurrency exchange. One half of Binance Coin tokens was sold off to investors as an ICO when it was launched (this is a pre-sale before the cryptocurrency is introduced to the exchange; the purpose of this step is to gain resources for developing the project). The course of development of the price and of the Binance coin token de facto copies the strong development of the Binance cryptocurrency exchange which has become one of the largest cryptocurrency exchanges in the world in a very short period of time.
Standardized ERC-20 token
Binance Coin is based on the ERC-20 ethereum token, which ensures its further development. Although it is not a typical cryptocurrency established with the goal of becoming a payment tool, this token is being used more frequently as a form of payment for services and merchandise in 2019, which means that it is starting to fulfill a similar function as Bitcoin or Zcash, for example. Since it’s an ERC-20 token, it can be used in other ways as well, similarly to Ethereum.
In the near future, the Binance cryptocurrency exchange is planning to establish a decentralized exchange where the Binance Coin would fulfill the role of a key asset and at the same time, a „fuel“ which would propel transactions (similarly to Ethereum on the Ethereum network).
What is the difference between a cryptocurrency and a token?
Cryptocurrency – digital payment tool based on cryptography. Its main characteristics include decentralization and it operates on the basis of blockchain technology. Cryptocurrency cannot be falsified. The main goal of cryptocurrencies is to serve as a payment tool – a means of exchange that can be carried out anywhere in the world and at any time. Cryptocurrencies include for example Bitcoin, Litecoin, Dash, or Zcash.
Token – they primarily function as a payment tool in the specific network to which they belong. Binance Coin is the token on the Binance platform. The purpose of tokens is not to fulfill the function of a „worldwide“ payment tool, but rather to function as a „fuel“ for carrying out smart contracts or running decentralized applications.
Number of Binance Coins tokens
The initial number of tokens was 200,000,000. Each quarter, the Binance company uses 20% of profits for a token buyout (up to a maximum of 50%) and these are subsequently „burnt“, resulting in a lower the number of tokens (which at the same time increases the value of the remaining tokens). This process will be repeated until only 100,000,000 tokens remain in circulation, which is the target amount. This makes Binance Coin an interesting oddity, since most cryptocurrencies are built on the principle of a gradual release (or an instantaneous release of the entire quantity) according to a pre-determined timetable. Currently, around 155,500,000 tokens are in circulation.
All time high: 39,57 USD (22th of July 2019).
Binance Coin logo
Binance Coin is fully supported by all available cryptocurrencies wallets.