If you’ve been part of the cryptocurrency space for a while, you’ve likely come across the name Binance, one of the most renowned cryptocurrency exchange platforms. However, Binance Coin (BNB) might not be as familiar, especially if you’ve never used the Binance exchange or are new to the world of cryptocurrencies. In this article, we will provide a comprehensive overview of BNB, its development, and its various uses.
A Brief Overview of BNB:
Founded by Changpeng Zhao, a Chinese-Canadian developer, investor, and business executive, Binance, the cryptocurrency exchange platform, came into existence in 2017. In July of that year, Binance introduced BNB, its native cryptocurrency.
Initially running on the Ethereum network, BNB later transitioned to the Binance Chain, which is Binance’s blockchain ecosystem. The Binance Chain has a strict limit of 200 million tokens.
During the initial coin offering (ICO), 20 million BNB tokens, equivalent to 10%, were allocated to angel investors. The founding team received 80 million tokens, or 40% of the total supply, while the remaining 100 million tokens, making up 50% of the total, were distributed to various participants.
The funds raised during the ICO were primarily reinvested into the Binance ecosystem, funding branding, upgrades, organizational development, and marketing efforts.
As of the time of writing, BNB is ranked as the fifth-largest cryptocurrency based on market capitalization.
The BNB Auto-Burn:
Binance Coin’s regulators aim to maintain its value by reducing its availability, a strategy often employed to increase the value of an asset. By reducing the supply, demand exceeds availability, which subsequently drives up the asset’s value.
BNB employs a burning mechanism to achieve this, where portions of coins are systematically removed as gas fees, and additional coins are burned during quarterly events. Binance has plans to reduce its total token supply by half in the future, further limiting the number of coins in circulation and creating scarcity to enhance its value. BNB holders and traders stand to benefit from this approach.
Uses of BNB:
As a cryptocurrency, Binance Coin serves a range of purposes. It can be used for:
- Cryptocurrency trading.
- Payment of transaction fees on the Binance exchange platform.
- Facilitating seamless credit card payments.
- Purchasing virtual gifts.
- Cryptocurrency investments.
- Payment for travel arrangements on specific websites.
- Facilitating loans and currency/money transfers.
- Supporting donations, crowdfunding, sponsorships, and more.
In summary, Binance Coin is a versatile cryptocurrency with various applications, making it a valuable asset within the broader cryptocurrency ecosystem.
Disclaimer: This article is for educational purposes and should not be considered financial advice. It is advisable to conduct your own research and exercise caution when dealing with cryptocurrencies.