Binance Coin is the official cryptocurrency of the world’s fourth-largest cryptocurrency exchange, Binance.
The market cap of Binance Coin has steadily increased since its inception in 2018. But what is Binance Coin and how do you use it?
What Is Binance Coin?
Binance Coin is the official cryptocurrency of Binance. The Binance Coin ticker is BNB, and there are a total of 200 million BNB tokens.
Of those 200 million BNB tokens, 100 million were made available during the BNB ICO, held in 2017. Of the remaining 100 million tokens, the Binance founding team kept 80 million, and with 20 million held in reserve for angel investors.
Binance Coin is an Ethereum ERC20 token. It has a limited supply of 200 million tokens, after which the exchange will mint no more coins. You cannot mine BNB.
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How Does Binance Coin Work?
Binance Coin is primarily used to pay Binance exchange fees while using the platform to trade cryptocurrency. Why use BNB instead of Bitcoin or the cryptocurrency you are trading to pay your exchange fees?
You receive massive exchange fee discounts if you use BNB! Here’s how the BNB exchange fee discount works:
- Year 1: 50% fee discount
- Year 2: 25%
- Year 3: 12.5%
- Year 4: 6.75%
- Year 5: No discount
So, in the first year, the regular 0.10% trading fee drops to 0.05%.
The discount level deprecates over time as the value of BNB token was also expected to fall. The Binance exchange plans to destroy BNB tokens over time to manage the overall supply, reducing the total supply from 200 million tokens to 100 million. Contracting the supply should counteract the effect of the decreasing discount, creating a stable price for BNB and its users over time.
“Every quarter, we will destroy BNB based on the trading volume on our crypto-to-crypto platform until we destroy 50% of all the BNB. All transactions will be on the blockchain. We eventually will destroy 100MM BNB, leaving 100MM BNB remaining.”
According to the terms of the BNB whitepaper, Binance plans to use 20% of any profits that the exchange makes each quarter to buyback and burn BNB tokens until the total supply decreases to 100 million tokens. Here are the details of the sixth, most recent BNB coin burn.
“For the sixth iteration of the burning of Binance Coin, we at Binance are burning 1,623,818 BNB. This recent burn corresponds to the period between October 1 and December 31, 2018. This figure is quite close to the 1,643,986 BNB amount we previously burned in our fifth BNB burn.”
For more information on the Binance exchange and Binance Coin, check out the Binance Whitepaper [PDF]. However, I warn you now; it isn’t exactly packed with information regarding the evolution of BNB.
How Do You Buy Binance Coin?
At the time of writing, one BNB costs $18.50, which isn’t too far away from its all-time high of $24.46 (in January 2018). BNB has a total market capitalization of $2,611,433,128, ranking it the 7th largest cryptocurrency by market cap. As mentioned above, Binance isn’t the only exchange where you can purchase BNB.
Coincodex lists 25 exchanges trading BNB, with 52-coin pairings.
Binance Coin also has several partnerships in place with other crypto projects. For instance, you can use BNB tokens to:
- Purchase digital gifts on the Uplive video streaming service
- Purchase goods and services throughout Brisbane Airport (plus 150 other establishments serviced by TravelbyBit)
- Issue short term eco-friendly impact loans to small business in developing nations via startup Moeda
- As a payment method on crypto point-of-sale solution, Pundi X
- To secure a loan through crypto loan service, Nexo
- As a payment method on the Loom Network’s gaming apps, such as Zombie Battleground
BNB also has a partnership with Crypto Visa card company, Monaco. The partnership allows you to spend BNB using a Monaco Visa Card or via the Monaco mobile app.
Here are the five best crypto credit cards of 2019, including Monaco.
The Future of Binance Coin
Binance Coin will remain a core feature of the Binance exchange. The initial BNB roll out has attracted a significant amount of interest as well as a huge influx of investment into the Binance exchange.
The core feature of BNB—lower trading fees—is attractive to cryptocurrency traders. Lower fees mean more profitable trading, further driving brand loyalty for Binance. And as there is very little incentive for other exchanges to consider listing BNB, Binance can continue to use their token as an almost unique selling point. (Though some other exchanges do list BNB.)
BNB ties in closely with the evolution of Binance, too. Binance has long aspired to transition to a decentralized exchange structure, and CEO Changpeng Zhao confirmed that the exchange will launch the new decentralized Binance version by the end of April 2019. Also, Binance will launch a fiat-to-crypto trading service in Singapore at the same time. Binance is even using BNB tokens to reward users who test trading strategies on the Binance DEX.
Binance Coin will also feature in the Binance ICO Launchpad. Users can purchase Binance ICO Launchpad exclusive public sales using BNB, stimulating the Binance ecosystem and further bolstering BNB’s position.
Join the Binance Coin Community
As Binance Coin has such close links to the main Binance exchange, there is some crossover between online communities discussing BNB.
- Official Binance Twitter
- Official Binance Facebook
- Binance subreddit
- Binance Instagram
- Official Binance Labs Twitter
- Official Binance Research Twitter
- Binance CEO Changpeng Zhao Official Twitter