Binance Coin (BNB): is it worth the investment

Binance Coin (BNB): is it worth the investment

Lia Jonon
Lia Jonon
Author
BNB is an innovative and usable cryptocurrency. Let’s discover the depth of its history, all the changes and the regulations with it. We also need to mark all its benefits and drawbacks before operating. Let’s review it.

BNB’s definition

BNb is a cryptocurrency which can provide transactions within the Binance Exchange. It is not the only coin to do so, but it is the most optimal to do so. Binance Coin was initially created in July 2017 and based on the ethereum blockchain.BNB’s definitionThe Binance exchange gives you a discount in transaction fees if you use BNB for trading. Moreover, it is exchangeable with other coins.

Principles of BNB’s working process

BNB is a coin which uses smart contracts to regulate the issuance, exchanging process and the flow of tokens. It helps to improve transaction’s transparency and safety. This coin is an addition to a system which was created by Binance’s owners. BNB is used within the Binance Chain which improves the speed efficiency of all trading actions. It uses a DPoS - Delegated Proof of Stake consensus algorithm. This system creates a highly efficient system which doesn’t have many issues overall.

Ecosystem of BNB

BNB’s ecosystem offers huge variety of financial services. It helps all who decide to start his business within the Binance platform. Funding new projects, crypto trading, providing new businesses within the ecosystem itself - these are the services for those who choose to work within such an ecosystem. Let’s review the parts of it:
  1. Binance cryptocurrency exchange. It is pretty much the field of trading actions. BNB is a very useful crypto within this platform, because it can be used to trade coins, apply discounts on the trading process itself and on other services.
  2. Binance launchpad. New projects can be introduced here. This is the platform which can provide ICOs for such projects. All-in-all, launchpad provides support to it and gives an opportunity to share the project with all other participants.
Here is the current statistics of the launchpad:current statistics of the launchpad
  • Binance academy. A website which helps to learn about crypto and blockchain. Let’s review an example of the academy’s courses:
Binance charity foundation
  • Binance charity foundation. An organisation which main function is helping people who went through disaster, have health issues and who can’t pay for their education.
Let’s review the approach of the organisation and its results:the approach of the organisation
  • Binance Research. An organisation which operates by itself and provides very detailed research on crypto and blockchains overall.
As you can see from the picture below, it follows the new tendencies and provides you with the intel about them:what is bnb

BNB’s history

BNB was launched in July 2017 as an ERC-20 token built on the Etherium blockchain. It was provided with an ICO which resulted in $15 million funding. Binance coin’s founders set the price: 15 cents per each token. $7.5 million were spent on branding, nearly $5.25 million were spent on the upgrades of the Binance Platform and the remaining funding was saved in case of any unpredictable situations.
Right after the ICO, Binance released its own exchange. Two years later, the company launched its own Binance blockchain. System introduced its native token - Binance coin.
All the owners of the Etherium blockchain BNB tokens received these new BNBs in exchange for the ones they have. It occurred on a token swap in the same year.

Pricing & dynamics of BNB

Binance Coin changes in a similar way to other cryptos. As you remember, BNB’s initial valuation was 10 cents. Now it can reach the $600 mark at some points. You see the tendency. Its market cap overgrew the $90 billion level. Let’s review the cap changes throughout the years:Pricing & dynamics of BNBIt’s difficult to predict future fluctuations because of the crypto’s volatility, but for those who entered the market at the right time Binance Coin became a great investment.

How does burning of Binance Coin work

After releasing BNB Binance started to execute the burning process. The company buys back several Binance Coins and erases it totally from the crypto flow.
BNB burning will continue on until the company eliminates a half of the original supply.
This can affect the valuation of the token and increase its rarity. Explore the statistics within the 2017-2021 year period:statistics within the 2017-2021 yearTo recover losses of those who unrecoverably lost Binance Coins in certain cases the platform pays back to such people the exact amount of capital. This repayment is subtracted off the next BNB burning process.

What is Binance Coin used for

There are several ways to use BNB within the Binance exchange out of it:
  1. Trades. BNB is a tradable crypto. It can be traded on different exchanges. Trading is followed by each exchange’s restrictions and rules.
  2. Transaction fees directly on the Binance Exchange. Participants of the Binance Exchange can pay such fees and have a discount while doing it.
  3. Credit cards. Binance Coin is usable for crypto credit card bills on Crypto.com website.
  4. Processing of payments. Merchants can accept and offer Binance Coin as a payment method, which provides the overall variability of choice in ways to pay.
  5. Travel reservations. Binance Coin is usable for booking hotels and flights on several websites.
  6. Entertainment. BNB is one more way to pay for a lot of products throughout the Net Market. It can be a virtual gift, lottery ticket, etc.
  7. Investing. Some exchanges accept BNB as an investing fund. It provides the possibility to invest in different assets on the market.
  8. Loans and transfers. One more way is to use the Binance coin - pledge for loans on specific platforms. Moreover, some applications give people an opportunity to split bills and pay friends and family with BNB.

Regulations with Binance

The Binance platform’s birth in 2017 was followed by one of the most impressive growths throughout the crypto history. And, of course, it led to several regulation models in 2021.
Japan, Malaysia, Thailand, Netherlands, the Cayman Islands and The UK.
For instance, the government of Malaysia filled a criminal complaint against Binance platform. It was based on the accusation of operating as an unauthorized virtual asset service provider. One more example of a similar situation occurred on the UK market. The UK Financial Conduct Authority restricted all platform operations because of the same lack of authorization within the operations.Regulations with BinanceThe US acted the same. In 2019 Binance revealed the news about its main exchange removal. The company targeted 2021 as the end line. Despite that fact it also released a compatible platform which provided the opportunity to continue all transactions in the United States. It was named Binance.US. It gave a start to Binance program which intention is to authorise platform in each country where it is being used. The platform corrects itself within the laws to legalize all the actions within the rules of each jurisdiction.

BNB investing

Let’s review both ways of BNB investing:
  1. Buying. If you want to own the Binance there are generally 3 methods: the buying itself, earning and staking. Preferable one is buying. Staking is a very risky way to gain BNB. Earning process could be long or difficult to perform.
  2. Selling. The process of selling is pretty easy. BNB trading is available in many exchanges.

BNB storing

Several methods to store Binance Coin are available. It depends on the individual preferences which way will be chosen. Let’s review these variations:
  1. Cold wallet. It is one of the safest options. This type of wallet operates without the internet and is separated from it. Usual cold wallet reminds USB flash drive which is protected with additional built-in layers of security. Later on, such a type of security guards the wallet from data breaches.
  2. Hot wallet. This is a risky way to hold crypto. Even though such wallets have layers of protection it can be breached easier than a cold wallet. Hot wallets usually can be used through a phone or a PC’s desktop app. Main advantage of such a type: speed of transactions.

Benefits & Drawbacks

BNB has many benefits, but it would be too good to have no drawbacks. Let’s take a look at each side.Benefits & DrawbacksThere are several advantages of BNB:
  1. Low fees. Using Binance Coin within the Binance platform will reduce the amount of fees you pay per transaction. It is a great advantage over other platforms.
  2. Bonuses for Binance users. The participation in the company’s exchange in addition to having BNB can provide you with airline rewards. Reduction of fees on every transaction, payment method on several platforms and potential pass to private NFT drops - all of that for operating on the Binance.
  3. The burning process. The erasing process which provides stability of the coin. It helps to increase the endurance of BNB to possible changes throughout the market.
  4. Programming capability. The BNB smart chain is young and can still be programmed. More additions will come with the growth of users which can help to handle future cases connected with it.
  5. Tokenization. The ability to turn every added item into the token on this chain. It can exist as a digital document of possession for a chosen asset.
It is centralized. The whole system is gathered around the company. The PoSA consensus model leads to the transaction’s verifications which are conducted by a private group of validators with a pass. It would be impossible to identify them: this is a rule. It can lead to future problems with the security because if hackers decide to infiltrate the system: it would be gathered within the same platform.
It can be a target for cyber attacks. The overall positive growth and popularity are followed by a constant number of cyber attacks. The exchange itself was attacked because of the potential access to hot wallets.
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