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What is Binance Coin?

 


What is Binance?

Binance is the world's largest and most well-known crypto trading platform. The exchange was founded in 2017 by Chinese-Canadian businessman Changpeng Zhao. The company was initially based in China. Due to increasingly strict regulations in the country, the company relocated to Malta.


Binance

With the bull market in late 2017, the popularity of the platform skyrocketed. Binance is now by far the most used crypto exchange in the world. The trading volume is more than 10 times higher than the volume of the second largest trading platform (FTX). 


The crypto exchange

On Binance you have the opportunity to trade cryptocurrencies such as Bitcoin, Litecoin, Ethereum, Cardano and others. You can also buy bitcoins directly with a credit card or SEPA process. Binance also offers numerous other functions such as spot trading, margin trading, staking and derivatives.


What is Binance Coin (BNB)?

Binance Coin (BNB) is Binance's proprietary cryptocurrency. It was first introduced as part of an ICO as an ERC20 token. For example, Binance users who used BNB to pay fees received a 50 percent discount. A fixed limit of 200 million tokens was set at launch. However, 100 million tokens are to be burned in the next few years.


Binance Coin BNB

The Binance Coin (BNB) is expected to take on more and more governance functions at Binance over time. By burning new coins, the BNB has a deflationary structure, which should guarantee that the Binance Coin should grow in value over the next few years. However, the price increase also came with the increasing popularity of Binance, which has become by far the largest crypto exchange in the world.


What are the advantages of BNB on Binance?

The BNB plays a crucial role in controlling the two Binance blockchains (Binance Smart Chain and Binance Chain). The BNB is also important on the platform and can bring some benefits to users. Those who pay the fees at Binance with the BNB receive a discount of 25 percent. It is therefore more worthwhile for investors and traders to primarily use the Binance Coin on the platform.


What are the Binance Coin blockchains?

At the moment there are two blockchains in the Binance ecosystem that interact and communicate with each other:


Launched in April 2019, Binance Chain is a blockchain independent of Ethereum. The blockchain is used solely for trading on the Binance platform. The Binance Chain uses the Tendermint algorithm for consensus. You can read more about this consensus here .


The Binance Chain is currently still subject to a central authority. The Binance platform continues to control large parts of the blockchain. This should change in the future and decentralization should be promoted. 


Proof-of-stake is used for consensus finding at the BNB . This allows you to do staking with the BNB and thus receive rewards on Binance. In contrast to proof-of-work , operating the blockchain is less costly and energy-intensive than with proof-of-work.


Furthermore, the Binance Blockchain is easily scalable and the Tendermint mechanism is considered secure and has a high error tolerance. This combination makes the Binance Chain and thus the BNB so attractive. 


What is the Binance Smart Chain?

The second blockchain in the Binance ecosystem is the Binance Smart Chain. This blockchain is responsible for the execution of more complex smart contracts. The Binance Smart Chain (BSC) is compatible with the Ethereum Virtual Machine (EVM), so many smart contracts can be imported from the Ethereum blockchain to the Binance Smart Chain.


The aim of the BSC is more efficient communication with other blockchains. The consensus at the BSC is achieved with Proof-of-Stake-Authority (PoSA), a form of Delegated Proof-of-Stake. When you create your Binance Coins (BNBs), you can vote directly via the validators at the BSC. 


What is the Binance Coin (BNB) prediction?

Binance Coin (BNB) is currently ranked 5th on Coinmarketcap, with a price of $281 and a market cap of $45.3 billion (as of September 06, 2022). If we take out stablecoins, BNB ranks 3rd behind Bitcoin and Ethereum. The BNB has been in third place for some time now and is well ahead of other coins such as ADA or SOL.


BNB course since the beginning

Binance has experienced a rapid and massive rise to become the world's most popular crypto exchange over the past 5 years. This development also helped the BNB and ensured that the coin became more and more popular and rose sharply in price. Investors continue to appreciate the benefits and functionality of the BNB. 


In the next few years, it is very likely that Binance Coin (BNB) should continue to rise in price. This is for the following reasons:


Binance is by far the largest crypto exchange and should continue to expand its dominance over the next few years. Therefore, the benefit of the BNB remains great.

The Binance ecosystem with the Binance Chain and the Binance Smart Chain is still growing strongly , which should also push the BNB.

Binance Coin is deflationary in structure. By burning coins, the existing coins should naturally increase in value.

It would not be surprising if BNB were to reach a price of $10,000 in the next few years . 

Is an investment in the BNB worth it?

An investment in the BNB should be worthwhile right now. The price is currently at the low end of prices in the current cycle due to the bear market. In the future, the price of the Binance Coin should rise sharply again. The value should explode again, especially in the next bull market.

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