Binance Coin: Official Cryptocurrency of Binance Exchange

All About Binance Coin

Binance Coin (BNB) is a cryptocurrency that was released in July 2017 via an ICO, which raised $15 million for the Binance exchange. Binance was founded by Changpeng Zhao, who has previous experience developing high-frequency trading systems for brokers. Zhao’s experience includes working at Fusion Systems, being a member of the wallet team, and an executive at the OKCoin cryptocurrency exchange.

Binance is one of the most popular cryptocurrency exchanges in the world. At the time of writing, it has a daily trading volume of $1.7 billion, making it the only crypto exchange with volume in excess of $1 billion. Currently, users can trade 290 different cryptocurrencies on Binance, providing the freedom to buy and sell all the major cryptos on a single, easy-to-use platform. Trading fees are reduced by 50% (from 0.1% to 0.05%) if you pay the fees with Binance Coin. Traders buy Binance Coin to save money on the exchange, intimately tying the price of the coin to the trading volume on the exchange.

A Very Active Cryptocurrency

Each Binance Coin is worth $11 at the time of this writing. With a circulating supply of 99 million coins, this yields a market cap of $1.1 billion, which makes it the 20th largest cryptocurrency by market cap. Considering there are thousands of different cryptocurrencies, this market cap rank indicates that Binance Coin is one of the most frequently used and traded cryptos.

The maximum amount of coins has been limited to 200 million, but the Binance Exchange has bought up 100 million coins, which has effectively removed 50% of BNB from circulation. This is called a “burn” and was done to drive the price upwards. The coin is an ERC-20 token, meaning it uses the Ethereum blockchain and is compatible with the Ethereum wallet, making it extremely secure since there is a massive amount of mining power securing Ethereum’s network.

Initially, the price of BNB was just over 10 cents, and it steadily rose to over a dollar within its first month. By January 2018, its value had skyrocketed to $25, and this coincides with the time that Bitcoin and many other cryptocurrencies hit their all-time record highs due to a speculatorly fueled market frenzy. The price quickly crashed to $8 after the peak, but is now steadily rising, partially due to the burning of more coins. Since Binance Coin can save half the trading fees on the extremely popular Binance exchange, I expect the price of the coin to increase significantly in the long term. Therefore, I think it is likely beneficial to keep some BNB in your cryptocurrency portfolio.

This is not advice.  Advice should be accepted by your chosen legal counsel only and financial advice should come from a licensed or certified financial professional. As always – do your homework and make decisions based on your own education.  Seek information and look into projects before adding to or diversifying your portfolios.