Binance Coin

What Role Can the Binance Coin Play in the Crypto World? 

Nicoleta Balan Avatar
Aug 10, 2022
6 min reading time

The Binance Coin is also known by the abbreviation BNB. It is the native coin of the renowned cryptocurrency exchange Binance. So far, 200 million BNB have been issued by Binance worldwide. The aim is to ultimately promote the exchange. First and foremost, the coin is to be used for payment transactions within the exchange.   

But the gambling market also accepts payments with the currency, which is growing in popularity, in various Binance Coin Casinos so that gamblers around the world can wager their virtual money risk-free in these online casinos. Read the latest news and exciting background information about the popular cryptocurrency BNB. 

Why Was the Binance Coin Invented 

There are two reasons why the Binance Coin was invented. Firstly, to strengthen the cryptocurrency platform, and secondly, to promote a sustainable ecosystem through the activities that take place there.  

There is a whole range of possibilities for what the coin can be used for. These include paying the listing and exchange fee, trading costs, or other fees that may be incurred when trading on the exchange.  

In the beginning, Binance offered a 50% trading discount. In each subsequent year, this discount was halved. In the fifth year, the discount finally ended.  

Using Binance Coin in the area of IEO investments is also possible. This involves the IEOs that are sold in the Launchpad area of Binance.  

On the Binance exchange, these new currencies are fully listed, providing them with a fully-fledged marketplace for trading.  

Thanks to the BNB, dependence on traditional money is being reduced more and more.    

Experience has shown that conventional money transactions can always involve delays and additional fees. For the end user, this is not only annoying bad news but also represents an additional financial burden. 

But when trading with BNB, the user can save real cash thanks to the token. Thus, circumventing delays and extra fees is one of the main advantages of BNB. 

The Technology Behind the Coin 

The Binance Coin is based on the Ethereum blockchain and uses the ERC20 standard, but these virtual coins cannot be mined conventionally.  

This is because they were built up before the launch and distributed via an ICO. The currently circulating tokens are primarily used for trading on the Binance exchange.  

As mentioned above, the rebate on BNB ended in the fifth year after its launch, which directly impacted the value of BNB Coins. The loss in value was countered by buying back coins from Binance to destroy them afterward, which automatically reduced the total supply.  

According to the exchange’s plans, half of the crypto coins still in circulation are to be destroyed. 

Are Binance Coins Real Money or Not? 

BNB focuses on promoting the cryptocurrency exchange and strengthening the Binance ecosystem. The token can currently be used for trade discounts, but this promotion will no longer exist in the coming years.  

The Binance Coin can be used in many ways on the internet, for example, to pay for travel and hospitality services. However, the overall acceptance is still rather low.  

This is precisely the reason why the cryptocurrency BNB cannot yet be equated with real money.  

Yet, since the company has large financial reserves, it can stay well afloat over a long period of time. Moreover, the landscape of dominant altcoins could change drastically in the coming years.  

Therefore, it is better not to underestimate this coin because, after all, it is backed by an exchange that conducts billions of dollars worth of crypto transactions month after month.  

Still, although Binance Coin is a viable currency substitute, its market acceptance does not currently come close to Bitcoin or Ripple. 

Fees and Costs of Binance Coin 

There are no fees on the network, as the Binance Coin was primarily created for the exchange. When trading the coin, 0.1% of the purchase price must be paid. If the BNB is used as a means of payment for a trade transaction, one receives a lucrative discount of 50%.  

For example, if you buy $100 worth of BNB through Binance with another coin or conventional money, it will cost a fee of $0.10. On the other hand, if you pay directly with BNB, you only pay half the fee – so you only pay 5 cents. 

Binance Coin and the Advantages 

When trading with Binance Coin on the exchange, you need access to the platform’s proprietary matching engine, which supports up to 1.4 million orders per second. In this way, the right trade is always found and in addition, using Binance Coin makes trading even faster and more reliable. 

The Security of BNB  

Binance already has millions of users and traders who trust the platform and rely on the security and protection features of the exchange. To keep the exchange’s funds safe, the platform uses a multi-cluster, multi-tier system framework and the Secure Assets Fund for Users (SAFU).  

Since the Binance Coin is built on the Ethereum blockchain, cryptographic encryption is used here. This ensures that data breaches and unwarranted access by unauthorized third parties can be prevented even more reliably.  

The whole blockchain is decentralized, so there is no central node that can simply be hacked. In addition, Binance is a partner rated as extremely secure in the current crypto world and offers strong security features such as two-factor authentication or SSL-certified encryption

Should you Invest in the Binance Coin? 

What is particularly promising about the Binance Coin is the fact that its success does not only depend on whether it can establish itself as a real currency alternative on the crypto market. Ultimately, BNB can definitely be used within the Binance Exchange ecosystem for trading digital assets, which offers a comfortable user experience for the platform’s growing number of users worldwide.  

Experience shows that developments in the crypto scene can be very unpredictable. This is especially true when it comes to possible price fluctuations.  

Anyone who wants to invest in BNB or another cryptocurrency should, therefore, by no means underestimate the importance of risk mitigation. 

Can Binance Coin be Used Anonymously? 

Absolutely maintaining one’s anonymity when using Binance Coin is immensely challenging. For the most part, BNB is only used within the Binance ecosystem. In order to be able to fully use the currency outside of it, a verified account on the exchange is required in any case.  

The KYC (Know Your Customer) and AML (Anti Money Laundering) regulations are fully complied with by Binance. This means that every user is asked to provide real personal information for individual identity verification before opening an account. It is, therefore, not possible to use Binance on the platform without a properly verified account. 

Featured Image: unsplash.com

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