Last updated on October 27th, 2023 at 10:55 am
Binance Coin (BNB) Definition, Overview, Development, and Uses
If you have been in the cryptocurrency space for some time, even as little as a few months, Binance is almost certain to be a familiar name.
However, Binance Coin may not be as familiar, especially if you’ve never used the Binance exchange platform yourself, or you’re just the kind of newcomer who engages a third party to do the buying or trading on your behalf.
If you’re that much of a newbie, you’ve found your way to the right place.
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While Binance is an exchange platform and a digital network on its own, BNB (Binance coin) is the virtual currency that exists on it—the electronic coin was created as the cryptocurrency issued on the Binance chain ecosystem.
A Brief Overview of BNB
Changpeng Zhao, a Chinese-Canadian developer, investor, and business executive, founded Binance (the cryptocurrency exchange platform) in 2017. In July of the same year, Binance launched BNB, its electronic coin.
It ran on the Ethereum network at first but transitioned to running on Binance Chain, the blockchain ecosystem of Binance.
There can be no more than 200 million tokens on the blockchain. At its initial coin offering (ICO), 10% (20 million) of the BNB tokens went to angel investors.
The founding team had 40% (80 million tokens) for themselves, and the rest (100 million tokens, 50% of the total) were distributed to several other participants.
Monies raised during the launch processes were mostly used for reinvesting back into the Binance system, with branding, upgrading, organizational, and marketing needs swallowing the lot.
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Based on the market cap, BNB is ranked number 5 on the list of cryptocurrencies at the time of this writing.
The BNB Auto-Burn
The regulators of Binance coin want the coin to stay as valuable as possible. One of the surest ways to increase the value of an item, service, concept, or idea is to make it less available.
The demand consequently meets limited supply, and so the value appreciates. A good number of electronic coins have a burning schedule just like BNB, annihilating some of their babies for good.
Related: What is Cryptocurrency and How does it work?
BNB burning works in a couple of ways: some portions of coins get burnt out as expenditure on gas fees; the other occurs during quarterly events scheduled for BNB burning.
Binance plans to slash its total supply of tokens by half in the future, thereby cutting down the number of coins in circulation and building scarcity for the sake of value—BNB holders and traders can be sure to benefit from such a system.
Uses of BNB
As a cryptocurrency, the BNB can be used for indirect trade. You can pay for products, services, and transaction charges—you can also take part in exclusive token sales.
Here are other uses of the Binance coin:
- Cryptocurrency trading.
- Payment for transaction charges on the Binance exchange platform.
- Seamless credit card payments.
- Purchase of virtual gifts.
- Cryptocurrency investing.
- Payment for travel arrangements on specified websites.
- Loaning and currency or money transfers.
- Donations, crowdfunding, sponsorships, etc.
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Fredrick Agaga
Fredrick Agaga is a blog writer and sales Copywriter with an uncanny obsession for cryptocurrency white papers. You may think that's an unpleasurable way to go, but not so for him. He lives for simplifying 'complex' ideas and sparking conversations with readable, engaging, and easy-to-understand content.