Binance Coin (BNB) is a cryptocurrency deployed by the company that operates the Binance virtual currency exchange platform. Originally developed on the Ethereum blockchain, before having its own blockchain, the BNB token is the cornerstone of the exchange platform project led by Changpeng Zhao. What do we think about Binance Coin? Is this cryptocurrency a good investment for speculative purposes? Where is the BNB price since its launch in 2017? Don’t panic, we tell you everything!
What is the Binance Coin (BNB)?
The Binance Coin (BNB) is a cryptocurrency distributed by the Binance exchange. As a reminder, this platform constitutes the greatest virtual currency exchange market in volume of assets traded on average per day (around $ 3 billion). Created in 2017, its dynamic is exponential. Why ? Because it provides thousands of transactions each second.
Compared to the competition, the costs on the exchange are low (around 0.1% the amount). In addition, the user is accompanied by a quality customer support, while having access to more than 500 cryptocurrencies. Even if some neophytes sometimes have a hard time with the interface and the handling, it can be interesting to try to know how the platform works, and this in particular thanks to the cryptocurrency which belongs to it, the Binance Coin (BNB).
What are the advantages of Binance Coin (BNB)?
Buying from Binance Coin (BNB) allows members registered on Binance to save money on the platform. Using this platform specific token, they benefit from a reduction on transaction fees, withdrawal fees and others. This is a significant advantage for small investors wishing to closely monitor the budget dedicated to this type of investment!
The existence of Binance Coin also allows users of the platform to convert their pennies BNB cryptocurrencies. With one click and at no cost, this tool is very practical for recovering virtual currency dust whose amounts are so small that they would not even cover commission costs. Since the user will have no interest in paying a withdrawal fee to recover this cryptocurrency dust, convert to Binance Coin !
Good to know : BNB is also used on the new version of the exchange platform Binance DEX as the sole means of payment for paying transaction costs (0.1 BNB per transaction).
Why choose the Binance Coin?
The fundraising (ICO) for the Binance platform has enabled the value of the BNB to grow at the same rate as the activity of the exchange platform with which it is associated. Result: the BNB token appears in the top 10 the classification of cryptocurrencies by market capitalization, more precisely at the 8th place at the time of writing the article. This recognition is not without effect on its adoption. This represents a huge score for a cryptocurrency supposed to be “simply” used to reduce fees on a platform.
Our opinion on the Binance Coin is therefore also based on the fact that there are more 100 use cases for using this cryptocurrency. Among the major partnerships forged, TravelbyBit has a special place. Australian society now allows book stays in hotel establishments and BNB flights. Bitcoin Rewards is another example of the spread of Binance Coin usage. This platform grants cryptocurrencies as reward if the user validates their shopping cart. The Binance Coin is now one of the virtual currencies offered. You can even donate your BNBs to Binance Charity.
How to understand the risks with Binance Coin?
As with all cryptocurrencies, the investor must have a clearly defined strategy upstream. And to establish it, he must know the risks involved and the specificities of each virtual currency.
What are the consequences of a limited number of BNB tokens?
The number of Binance Coin (BNB) is limited to 200 million tokens. After this figure, no more BNB will be created. Beyond this rule, a number of BNBs will be destroyed.
In addition, the discount offered on fees on the Binance platform is halved each year. Thus, at the first membership, the client benefited from a discount of 50%, in the second year, a discount of 25%, etc. Thus, in July 2021, no more discounts will be available on the platform.
Logically, the discount decreasing each year, the value of the token should follow the trend. In order to combat this depreciation, Binance has decided to destroy BNB tokens as they go, from a planned final stock of 200 million tokens to 100 million. So every quarter, Binance uses 20% of its profits to destroy an equivalent amount in BNB which the company has in reserve. By this mechanism of buy-and-burn, the platform wants stabilize value of the BNB over time, by contracting the money supply to offset the impact of the reduction in the discount. For more information, you can check this page.
What is the history of the Binance Coin (BNB) price?
In october 2018, the value of the Binance Coin was around 5 euros before following a significant rise during the first semester 2019, while all other cryptocurrencies suffered a major correction effect. A peak is reached end of June 2019 around 34 euros, before a downward trend which brings the price, in december 2019, at 11 euros.
It’s good to note that when the cryptocurrency bubble burst, the Binance Coin particularly well resisted, conceding a fall “only” of 67.5%, compared to January 2018, against a fall of 83% for the Bitcoin. This capacity is due to the solidity of the Binance platform within which it operates. Its value could therefore be based on the activity of the exchange, like a stock.
Our advice on Binance Coin: reviews and comments
Our opinion on the Binance Coin is primarily focused on vigilance, because the internal cryptocurrency at the Binance ecosystem could suffer from this addiction. Everything will depend on the activity of the exchange and its ability to attract customers and generate long-term transactions.
The future of Binance Coin also depends on its export and its use as means of payment in e-commerce. As an investor, it is therefore interesting, on the one hand, to follow BNB news to observe its expansion and, on the other hand, to monitor the correlation with the activity of the Binance platform.
For the time being, it has undeniable arguments such as the speed of transactions, low costs and his worldwide availability. The team led by Changpeng Zhao is recognized for its ability to develop technological products. Finally, its success allows it to envisage the ever more extensive implementation of programs and functionalities in order to maintain a virtuous circle.
A juggernaut in the cryptocurrency industry, Binance has managed to make profits to the tune of nearly $ 500 million in 2018, despite the delicate context of virtual currencies, which proves the solidity of its economic model. Illustration of his power, rumors dated of december 2019 reported a possible takeover of Union Bank AG by Binance, a bank in the Liechtenstein bankruptcy. Rumors rejected by CFO Wei Zhou.
Regarding cryptocurrency, considering that Binance is one of the best platforms of the moment, we have no doubt that it is, at the time of writing, a good cryptocurrency for an investment. It will remain to be seen whether from July 2021, when the end of the fee reductions ends, the BNB will continue to attract its investors through other features.
The exchange continues to deploy services, like its loan offer added at the end of summer 2019, which should allow it to collect deposits from its customers. By combining all these elements and taking into account the events, the year 2020 could greatly play in favor of Binance in terms of performance. However, this will depend in part on the results concerning the acquisition of CoinMarketCap.