What is Binance Coin, and how has it become so popular? Is it valuable? How does it work? These and more are some of the frequently asked questions about Binance Coin (BNB). Today, we answer them.
Binance Coin is the official cryptocurrency issued by Binance Inc., the world-renowned crypto exchange. Initially, it was built and used on the Ethereum blockchain. However, Binance created its own chain, The Binance Chain, and moved the primary operations of BNB to its chain.
This article answers five of the most frequently asked questions about Binance Coin. Take a look.
1. What is Binance Coin?
Binance Coin is the official crypto token for several use cases on the Binance Chain and exchange. It was created in 2017 during the Binance Initial Coin Offering to serve as a utility token to enable traders to trade at a discount. Over time, its usefulness expanded to other use cases. Now, it can be used to pay trading fees, staking, travel bookings and entertainment.
Aside from being the ultimate utility token for various transactions on the Binance exchange, it also serves as a means of payment for gas fees, enabling users to use dApps and smart contracts on the BSC. Its symbol is BNB.
2. How does Binance Coin (BNB) Work?
Binance Coin exists on its native blockchain – the Binance Smart Chain. Cryptocurrency holders trade BNB because it’s needed to carry out certain transactions and activities on the BSC.
Originally, BNB existed on the Ethereum blockchain and was compatible with the ERC-20 tokens. But it was moved to its native chain and is now compatible with BEP-2 and BEP-20 tokens. Binance Smart Chain processes transactions rapidly because of its Byzantine Fault Tolerance consensus mechanism.
BNB is fully in circulation, so new tokens cannot be mined or minted. The maximum supply of BNB during the ICO was 200 million. Since the coin launch, Binance has continuously reduced the circulating supply of BNB via “burning“. The sole reason for this is to mitigate inflation by reducing the number of coins in circulation, thereby increasing the value of BNB.
Binance buys back and burns a portion of the total BNB supply every quarter and will keep doing this until they remove 50% of BNB from circulation.
3. What are the Benefits of Using Binance Coins?
Binance coin as a utility token boasts of several advantages.
- Trading fees: One of them is serving as trading fees on the Binance Exchange.
- Traded with other crypto: You can also trade BNB with other cryptocurrencies on exchanges that permit it.
- Payment for entertainment: You can use BNB to buy virtual gifts.
- Staking: Traders and investors can use BNB to invest in stocks and ETFs. They can also invest in yield farming on the Binance Smart Chain.
- As Payment: You can use BNB to make payments for goods and services to merchants that accept it.
- Bookings: Some websites accept BNB as payment for booking hotels and flights.
4. How Much is BNB?
At the time of writing, BNB is $271.37, according to Coinmarketcap. Prices may differ on different exchanges and according to the various crypto trading pairs.
BNB has a market cap of $40.68 Billion, a circulating supply of 151.69 million and trades at a daily volume of $695,356,852.
If you want to sell your BNB, you can sell on Prestmit at reasonable rates. You can check the going rates on Prestmit. At the time of writing, 1 BNB, which costs $271, sells at N276,420 in Naira.
Here’s how to do it.
- Download the Prestmit app on iOS or Android and sign up for an account.
- Navigate to the Sell Crypto section, generate your Prestmit BNB wallet, and copy the address.
- Send the amount of BNB you want to sell to your new Prestmit BNB wallet. It will automatically be converted to Naira or Cedis.
5. Where Can I Buy Binance Coins?
You can buy BNB on Binance exchange or from cryptocurrency exchanges like Coinbase. Some of these exchanges will let you pay with your local currency. They’re called crypto on-ramps. Here’s how to buy BNB on an exchange.
- Choose a reliable exchange.
- Create an account with them and sign in.
- Navigate to the trade section and initiate a trade. Enter the amount of BNB you wish to buy.
- Enter your wallet address if you’re sending it from the centralised exchange’s wallet.
- Complete the payment process, and you’ll receive your BNB.
Conclusion
BNB is the cryptocurrency used to make transactions on the Binance Exchange. It operates on its native blockchain, the Binance Smart Chain. Binance issued BNB in 2017 as a utility token for limited use cases like trading at a discount. After its ICO, it became more useful for other transactions like paying trading fees, trading, staking, booking flights, etc.
At the time of writing, BNB sells at $271, according to Coinmarketcap, and you can buy the coin on several exchanges. However, if you’re looking to sell, Prestmit comes highly recommended in offering ease, the best rates per time and speedy transactions.
Ensure you choose a credible crypto exchange to buy BNB. It’s also advisable to store your coins in a separate wallet away from the exchange.
