Over the last few years, cryptocurrencies have become the divas of the digital space. It’s almost impossible these days to spend an hour on the Internet without coming across the word ‘cryptocurrency’. If you are active in the crypto space, you must have heard about Binance, known as the biggest crypto exchange in the world.
BNB, formerly Binance Coin, stands for Build and Build. In this article, you will get to understand what BNB is, its utility as a coin, and the BNB Smart Chain (BSC) ecosystem. You will also get to know what makes BNB unique and why you may wish to consider BNB as one of the crypto assets in your investment portfolio.
BNB is the native token of BNB Smart Chain (BSC), formerly Binance Smart Chain. BNB can be used to trade and pay fees on the Binance cryptocurrency exchange and Binance ecosystem.
Established in 2017 by Changpeng Zhao (popularly known as CZ), Binance has progressed to become the biggest crypto trading platform on the planet. It is regarded as the world’s largest blockchain ecosystem and the leading digital assets exchange. Binance’s mission is “spreading freedom of money and building the infrastructure for the blockchain ecosystem”.
BNB with the ticker ‘BNB’ is the official cryptocurrency of the Binance Exchange. What is BNB and what is it utilized for? Is it worth investing in as a crypto asset? Read along to find out.
First, what are cryptocurrencies?
Cryptocurrencies are decentralized digital forms of currencies. They are not controlled by any central authority. These kind of currencies apply cryptography to protect exchanges and control the creation of new units. As well as being used for payments, cryptocurrencies can likewise be used as an alternative store of value. This is why they have become attractive to retail investors, and increasingly to institutional investors as well.
Since 2008 when the first cryptocurrency—Bitcoin—was created, cryptocurrencies have been gaining popularity gradually, although yet to go mainstream in most part. Because they are decentralized and optimized for the smart economy, cryptocurrencies are considered by some adopters as more accessible and more efficient. And because cryptocurrencies are highly divisible, they are also considered affordable as they could be bought in fractions. At current prices for example, one US dollars (USD) will buy you about 1/100th of a bitcoin. Being available or transferable in fractions doesn’t mean that cryptocurrencies are worthless either. While some cryptocurrencies are worth leas than a penny, others are currently worth thousands of USD in value. But whatever a cryptocurrency is currently worth, there’s no guarantee that your investment in any cryptocurrency will increase in value over time. Demand and supply largely determine value. And this is why the more you understand what a particular cryptocurrency is, the better position you are to make investment decisions on it. BNB is one of the thousands of cryptocurrencies out there.
Learn more about cryptocurrencies here.
What is BNB and what can it be utilized for?
BNB, formerly Binance Coin, is a cryptocurrency or digital money that was created by Binance. BNB was developed to help fund the improvement and development of Binance’s blockchain technology. It is also a utility token. This implies that it has an intrinsic value since it enables access to certain rights and benefits unique to it. And like most cryptocurrencies, BNB is also fungible, meaning that it can be traded for other cryptocurrencies, virtual assets, or even fiat currencies.
BNB has an initial maximum supply of 200,000,000 coins. Of this maximum supply, 161,337,261 are currently in circulation as of 9 September 2022. To reduce the total supply of the native token, Binance executes quarterly burning for BNB. Burning here involves taking out a portion of the total circulation forever. The overall aim is to reduce the total supply of BNB by half, i.e. 100,000,000 BNB. Consequently, each BNB will be worth more in value.
Similar to other developing cryptocurrencies, BNB has several applications beyond Binance Exchange, and Binance is itself now beyond an exchange; today, Binance, including being the world’s biggest exchange, is an ecosystem of blockchain-powered or blockchain-related products and services.
BNB is currently the 5th largest crypto asset by market capitalization. At the time of writing (14 September 2022), BNB’s market value is approximately $44.54billion, according to Coinmarketcap data. In May 2021—the peak of a Bullish market—BNB hit an all-time high of $690.93 per coin.
BNB is utilized in entertainment, finance, services, travel, and more.
According to Binance, BNB can be used to pay for goods and services, settle transaction fees on Binance Smart Chain, participate in exclusive token sales and more.
There is a growing list of what BNB can be used for example, entertainment, payment, services, and even travel:
BNB is presently used to pay on Pundi X (via XPOS), Monetha Merchants, HTC, Coinpayments, Coingate, and others.
BNB is used to buy auction on Decentraland, book accommodation on Loom Network, and get rewards on Vibe game. It is also used to pay for music copyright on MachiX, pay for aviation supplies and items on Aeron, buy virtual land on Axie Infinity, and more.
In the travel and hospitality sector, travelers can use BNB to book air flights and hotels on TravelbyBit, Trip.io, and Travala.
BNB is currently used to take out loans on ETHLend and Nexo, split bills and expenses on LNDR, and more.
To meet service needs, ranging from getting a dedicated server on PureVPN to creating Smart contract on MyWish, hiring freelancers on Canya to buying virtual gifts on Dent and more, BNB is accepted.
BNB can also be utilized in exchange for other digital currencies on the Binance Exchange and other crypto platforms. It can likewise be used to pay for trades on the Binance Exchange. Users get a discount whenever they pay for exchanges using BNB.
BNB powers the Binance ecosystem.
What makes BNB unique?
BNB is similar to other assets since they are all cryptocurrencies, nonetheless, some factors distinguish it from other cryptocurrencies or digital forms of money. The fundamental one is that BNB is the official digital currency of the Binance and Binance US exchanges. That was pretty obvious, right? But that’s not all.
BNB also serves as the local token of Binance’s BNB Chain, a collection of two parallel blockchains that involve the Binance Beacon Chain and Binance Smart Chain. At the point when you pay with BNB on Binance, trading fees are lower.
BNB’s role on the BNB Smart Chain has been particularly crucial to Binance’s expansion. Smart contracts can be executed on the programmable blockchain known as the BNB Smart Chain. This means software engineers can utilize it in various ways, such as developing blockchain games, producing non-fungible resources, and developing decentralized applications (DApps).
Crypto trades on the BNB Smart Chain (BSC) process quickly and have low gas charges. While Ethereum has remained broadly utilized, many engineers and consumers are moving to different platforms like BSC for lower gas fees. No engineer wants to build a product that the public doesn’t want to use, do they? The need to develop and use BSC has raised considerable interest in BNB.
BNB is not the same as BNB Beacon Chain and BNB Smart Chain.
- BNB is a coin, while BNB Beacon Chain and BNB Smart Contracts are not. BNB fuels the entire Binance ecosystem, which comprises, amongst others, BNB Beacon Chain and BNB Smart Chain.
- BNB Beacon Chain, formerly Binance Chain, is a decentralized blockchain that enables anyone store his or her crypto funds securely and create trading pairs with other cryptocurrencies.
- BNB Smart Chain (BSC), formerly Binance Smart Chain, is compatible with Ethereum Virtual Machine (EVM), thus supports Ethereum-bases applications and smart contracts. It is a consensus layer and accommodates multi-chains. BSC is not a layer two or off-chain scalability solution but an independent blockchain that could still run even if BNB Beacon Chain became unavailable. It provides a permissionless platform for decentralized applications (DApps).
Both BNB Beacon Chain and BSC run in parallel. Essentially, both blockchains operate side-by-side.
The BSC Ecosystem
There are thousands of projects built on BSC. Some notable projects in the BSC Ecosystem include the following in alphabetical order:
- Avalanche (AVAX): Avalanche boasts to be the fastest Smart contract blockchain in terms of time and finality. It is low cost and green. AVAX is the native token of Avalanche.
- BakerySwap (BAKE): BakerySwap is an automated market maker (AMM) and a marketplace for non-fungible tokens hosted on BNB Smart Chain. BakerySwap is the first open-source AMM and decentralized exchange (DEX). BAKE is available on major cryptocurrency exchanges. It’s creators are anonymous.
- Binance USD (BUSD): As the name suggests, this is the stablecoin created by Binance. BUSD is pegged to USD that has received approval from the New York State Department of Financial Services (NYDFS). It is available for direct purchase and redemption at a rate of 1 BUSD = 1 USD.
- Coin98 (C98): Coin98 is a DeFi solution that provides cross-chain staking, swaps, and yield farming. It is a multi-chain liquidity aggregator supporting variety of blockchains. Limuted to a maximum supply of 1,000,000,000, C98 is the native token.
- EOS Network (EOS): Built by Block.One, EOS is a blockchain that enables developers build Dapps. EOS is an open-source blockchain platform. According to EOS, it offers high performance, flexibility, security, and developer freedom.
- Ethereum Classic (ETC): Ethereum is the hard fork of Ethereum (ETH). A smart-contract blockchain, Ethereum Classic supports DApps. ETC is the native coin of Ethereum Classic. A total of 210,700,000 ETH will be supplied. Ethereum Classic is hosted and supported on BNB Smart Chain because BNB Smart Chain is EVM compatible.
- Flux (FLUX): Providing a blockchain and Web3 development environment to developers, Flux is a new generation of scalable decentralized cloud infrastructure. It applies proof of work (PoW). The maximum total of FLUX to be circulated is 440,000,000.
- PancakeSwap (CAKE): PancakeSwap is a DEX that allows users to trade BEP20 tokens, provide liquidity, and earn fees. CAKE is not cake but the native token of PancakeSwap.
- THORChain (RUNE): THORChain enables users exchange crypto assets across a range of networks without the users losing full custody of their crypto assets. THORChain is a decentralized liquidity protocol. RUNE, with a total supply of 500,000,000 tokens, is the native token of THORChain.
- Venus Protocol (XVS): Venus is a decentralized finance (DeFi) algorithmic money-market protocol on BNB Smart Chain. Venus Protocol offers high transaction fee and low trading fees. XVS is the native token of Venus Protocol.
- WazirX (WRX): WazirX is an Indian crypto exchange. Its native token is WRX. The maximum supply of WRX is 1,000,000,000, from which 150,000,000 is available to WazirX users for free.
Why HODL BNB?
A great part of investing is knowing what value a digital currency holds. In the crypto space, a coin’s value is measured by the advantages it presents. BNB has a lot of advantages that attract investors. One such advantage is its utility.
BNB is regarded as a great utility token because of the present status of the crypto sector and the development of Binance. You can put resources into this coin to bring in cash as well as utilize it to complete trades on the Binance market. Additionally, you can purchase things online like gift cards, entertainment, travel, and more.
The fact that users get reductions in the fee charged is one of the most significant benefits of BNB. It’s also a terrific way to expand the neighborhood.
The burning of BNB is another important factor. Burning BNB preserves the coin’s resilience and continuous improvement. Binance limits the stock of BNB by burning it using a special policy.
With new coins and projects entering the market daily, the crypto market is quite congested. But BNB is one of those cryptocurrencies that has not only made remarkable development since inception but also has room to grow. With millions of enthusiastic users all over the world, BNB has a very strong community. We hope that this article has helped you understand what BNB is and help you decide whether it is the right choice for your short-term, mid-term, or long-term investment goals.
Credit: Ndianabasi Tom