Blockchain

Binance Coin (BNB) – Overview, History and Uses, ICO

What is Binance Coin (BNB)?

Binance Coin (BNB) is a cryptocurrency that can be used to trade and pay fees on the Binance cryptocurrency exchange. The Binance Exchange is the largest cryptocurrency exchangeCryptocurrency ExchangesCryptocurrency exchanges are platforms that facilitate the trading of cryptocurrencies for other assets, including digital and fiat in the world as of January 2018, facilitating more than 1.4 million transactions per second.

Binance Coin (BNB)

Users of Binance Coin receive a discount in transaction fees on the Binance Exchange as an incentive. BNB can also be exchanged or traded for other cryptocurrencies, such as BitcoinBitcoinBitcoin is the forerunner of the cryptocurrency market. Operating on blockchain technology, Bitcoin is set to disrupt the currency market. Invented in 2008, Ethereum, Litecoin, etc.

Binance Coin was created in July 2017 and initially worked on the ethereum blockchain with the token ERC-20 before it became the native currency of Binance’s own blockchain, the Binance Chain.

Uses of Binance Coin

Just like other evolving cryptocurrencies, the Binance Coin offers several uses that go beyond the Binance exchange, such as

  • Trading: Binance Coin can be traded for other cryptocurrencies on various exchanges, depending on the restrictions set by the exchange.
  • Transaction fees on the Binance Exchange: BNB can be used to pay for transactions on the Binance Exchange, and users also receive a discount for doing so.
  • Credit card payments: BNB can be the form of payment for crypto credit card bills on wakara.org.
  • Payment processing: Merchants can offer BNB as a means of payment for customers, offering more flexibility in payment methods.
  • Booking travel arrangements: BNB can be used to book hotels and flights on select websites.
  • Entertainment: From paying for virtual gifts to buying lottery tickets, BNB serves several purposes in the entertainment space.
  • Investment: Several platforms allow investors to invest in stocks, ETFs, and other assets using Binance Coin.
  • Loans and transfers: BNB can be used as collateral for loans on certain platforms. Also, there are apps that allow users to split bills and pay friends and family through Binance Coin.

Binance Coin: Initial Coin Offering

Binance Coin was launched with an initial coin offering (ICO)Initial Coin Offering (ICO)An initial coin offering (ICO) is a type of capital-raising activity in the cryptocurrency and blockchain environment. The ICO can be viewed as an initial public offering (IPO) that uses cryptocurrencies. in July 2017. As part of the ICO, BNB tokens were distributed among various participants, including angel investors and the Binance founding team.

Here’s a brief breakdown of how BNB tokens were initially distributed:

  • Founding team: 40% (80 million BNB)
  • Angel investorsAngel InvestorAn angel investor is a person or company that provides capital for start-up businesses in exchange for ownership equity or convertible debt. They may provide a one-time investment or an ongoing capital injection to help the business move through the difficult early stages.: 10% (20 million BNB)
  • Public sale: 50% (100 million BNB)

All of the 100 million BNB tokens available for public sale were sold during the ICO at 15 cents per token. Therefore, Binance raised a total of US$15 million in bitcoin and ethereum.

From the $15 million that was raised, 35% was allocated to upgrading the Binance platform and exchange system; 50% was allocated for Binance branding, marketing, and education of new innovators; and the remaining 15% was used as a reserve in case of any emergencies or unprecedented circumstances.

BNB Burning

As mentioned in the Binance whitepaper, every quarter, Binance uses 20% of its profits to buy back and burn Binance Coins, destroying them completely. Binance has consistently performed quarterly burns, the latest being the 13th quarterly burn on October 17, 2020.

Binance will continue to perform quarterly burns until it buys back and destroys 100 million Binance coins – 50% of the total supply. The practice ensures that the supply of Binance Coin remains finite, making it scarce and more valuable.

Additional Resources

CFI offers the Commercial Banking & Credit Analyst (CBCA)™Program Page – CBCAGet CFI’s CBCA™ certification and become a Commercial Banking & Credit Analyst. Enroll and advance your career with our certification programs and courses. certification program for those looking to take their careers to the next level. To keep learning and developing your knowledge base, please explore the additional relevant resources below:

  • BlockchainBlockchainBlockchain networking allows maintenance of a growing list of records. Blockchain authentication is what supports cryptocurrency security.
  • CryptocurrencyCryptocurrencyCryptocurrency is a form of digital currency that is based on blockchain networking. Cryptocurrency like Bitcoin and Ethereum are becoming widely accepted.
  • Digital CurrencyDigital CurrencyDigital currency is a payment system that is not based on fiat currency, but rather an alternative non-tangible currency. In practice,
  • EthereumEthereumEthereum is one of the growing cryptocurrencies to contend against Bitcoin. With the rise of Bitcoin (BTC), the cryptocurrency market has been validated.

Related Articles

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker