What is Binance Coin (BNB)?
Binance Coin (BNB) is the signature digital currency issued by the Binance exchange and trades under the symbol BNB. As of August 2023, Binance stands as the largest cryptocurrency exchange globally, boasting a daily transaction volume of $6.7 billion.
Key Takeaways
- Custom-Built Currency: BNB transitioned from the Ethereum network to become the native coin of Binance Chain.
- Regular Coin Burning: Binance uses one-fifth of its profits quarterly to repurchase and permanently destroy their BNB tokens.
- Broad Utility: Originally intended for discounted trading fees, BNB now supports various applications like transaction fees, travel bookings, entertainment, and financial services.
- Market Cap: As per the latest data, Binance Coin’s market capitalization exceeds $36 billion, ranking it among the top cryptocurrencies.
- Legal Challenges: Despite its financial prowess, Binance faced legal hurdles in 2023 related to money laundering and securities law violations.
Understanding Binance Coin (BNB)
Initially launched on the Ethereum blockchain with the ERC-20 standard, BNB has since transitioned to be the native cryptocurrency of Binance Chain. BNB was introduced during an initial coin offering (ICO) in July 2017 with a strict cap of 200 million tokens.
Allocation
- Angel Investors: 10%
- Founding Team: 40%
- ICO Participants: 50%
Roughly half of the ICO funds were allocated to branding and marketing, with a third designated for platform development and ecosystem upgrades.
The Phenomenal Reach of Binance Coin
As of mid-August 2023, BNB was listed as the fourth-largest cryptocurrency by market cap, trailing only Bitcoin, Ethereum, and USD Tether.
Binance Coin Burning Explained
While 100 million BNB tokens were initially released during the ICO, subsequent token burns have reduced the circulating supply. Binance conducts quarterly burns, utilizing 20% of its profits for this purpose. The most recent burn on April 14, 2023, saw 2,020,132.25 BNB tokens (worth $676,744,304 USD) eliminated from supply, marking one of the largest burns in U.S. dollar terms.
Expanding Binance Coin Uses
Originally a utility token for discounted trading fees, BNB’s functionality has expanded to include numerous applications:
- Fees: Payment for transaction fees on Binance.com, Binance DEX, and Binance Chain.
- Payments: Accepted by various merchants and services, including Crypto.com, Monetha, and HTC.
- Travel: Can be used for bookings via TravelbyBit, Trip.io, and Travala.com.
- Entertainment: Facilitates purchases of virtual gifts, card packs, and more.
- Online Services: Usable for BitTorrent, Canva, and Storm services, among others.
- Financial Applications: Eligible for loans at ETHLend and investments through Moeda.
Binance Smart Chain: A Deeper Dive
By August 2023, Binance Smart Chain was executing approximately 3.9 million daily transactions, surpassing Ethereum’s record. This figure was slightly down from the peak of nearly 16 million daily transactions recorded in November 2021.
Binance’s ICO Launchpad program offers an avenue for investing BNB in new cryptocurrency projects. Projects launching on Binance exchange ensure a seamless trading environment for a variety of tokens.
Strategic partnerships have further strengthened BNB’s utility. For instance, Asia’s luxury video streaming platform, Uplive, utilizes BNB tokens for virtual gifts, engaging a 20 million-strong user base. Additionally, Monaco’s VISA debit card and mobile application accept and support Binance Coin, making financial transactions simpler and more accessible.
Unique Features of BNB Coin
BNB Coin Overview
BNB primarily facilitates transaction and trading fee payments on the Binance exchange.
Diverse Usage
BNB proves versatile beyond Binance, enabling:
- Credit card payments
- Travel bookings
- Virtual gifts
- Payment processing
- Investments
- Loans and transfers
- Charitable donations
Converting to BNB
In crypto parlance, “dust” refers to minute coin fractions that remain post-trades. Binance offers a feature to convert this dust into BNB.
BNB Market Insights
The BNB market is the primary vehicle for buying and selling this cryptocurrency, with most transactions occurring on the secondary market.
Regulatory Landscape
While Binance is not banned in the U.S., it faced scrutiny and investigation by the Justice Department and IRS in May 2021. Binance maintains strict compliance, continually ensuring adherence to legal standards and cooperation with regulators globally. Incorporated in the Cayman Islands, the platform remains committed to reliable operations and transparency.
Related Terms: Ethereum, Bitcoin, cryptocurrency exchange, initial coin offering, smart contracts.
References
- CoinMarketCap. “Today’s Cryptocurrency Prices by Market Cap”.
- Binance.us. “Why Can’t I Withdraw or Trade?”
- SEC.gov. “SEC Files 13 Charges Against Binance Entities and Founder Changpeng Zhao.”
- Binance. “BNB Price”.
- KuCoin. “What Is Binance Coin (BNB) and How Does It Work?”
- Binance Academy. “What Is a Coin Burn?”
- Binance. “23rd BNB Burn”.
- Binance. “What is BNB?”, Select How to Use BNB.
- Etherscan. “Ethereum Daily Transactions Chart”.
- BscScan. “Binance Smart Chain Daily Transactions Chart”.
- BusinessWire. “World’s Leading Crypto Exchange Binance Partners With Uplive - Asia’s Premier Live Video Platform”.
- Binance Charity. “Mission”.
- Binance. “How to Convert Small Account Balance to BNB”.
- Bloomberg. “Binances Faces Probe by U.S. Money Laundering and Tax Sleuths”.
