Binance Coin – BNB The Ultimate Platform Token

According to CoinMarketCap, there are over 5,400 cryptocurrencies listed globally. All of them have varying levels of utility and fulfill different functions. For example, Bitcoin (BTC) is a global cryptocurrency, while Tether (USDT) is a stable coin.

In this article, we’ll unpack the features and utility of Binance Coin (BNB). Many exchanges list tokens that customers can use on the exchange to fulfill certain transactional duties. Think of it as an incentive program offered by a credit card company.

A credit card company might offer you frequent flyer miles for using their payment platform. It’s the same with crypto exchanges; they also run the model of using platform tokens to help you reduce your transactional costs on the platform.

Binance Coin (BNB) is the token from the Binance crypto exchange. Binance is possibly one of the most successful all-round exchanges. It’s the third-leading exchange in terms of liquidity, and one of only four exchanges with reserves over $70-billion.

Binance also does more than $5-billion in daily volume on its trading platform and provides customers with access to over 600 crypto markets. The platforms token, Binance Coin, trades under the ticker symbol BNB. This token runs on the Ethereum Blockchain with ERC-20 standard protocols and a maximum limit of 200-million BNB tokens available.

What is BNB?

The original whitepaper for Binance Coin suggested that the function of the token was to fulfill operations on the Binance crypto exchange as well as its ecosystem. Holders of the tokens can use them to pay for all fees on the Binance exchange and receive up to a 50% discount on exchange, listing, or trading fees.

Binance Coin launched through an ICO in July 2017. The ICO process provided angel investors with access to 20-million BNB tokens, 80-million tokens went to the development team, and the rest of the 100-million tokens went to the investing public taking part in the ICO.

How Does It Work?

Binance Coin is running a tiered waterfall discount structure for using the tokens to pay for fees. In the first year of launch, Binance provides a 50% reduction in fees. In the second year, holders get a 25% reduction, and in the third, 12.5% discount. Holders get 6.25% in the fourth, and the bonus discounts on the token ending in the fifth year.

Holders of BNB tokens can also use the cryptocurrency to invest in ICOs on the Binance platform through the launchpad program. BNB also has commercial partnerships with several high-level consumer brands.

Some of the BNB partners include Uplive – one of Asia’s favorite live streaming platforms with a 20-million user base, as well as Visa Card of Monaco.

Binance runs a buyback program on Binance tokens. The Binance team dedicate the company to repurchase tokens up to the value of 20% of its profits. The exchange will “burn” these tokens until they remove 100-million of them from the supply, or 50% deflation of the total BNB token supply. During burns, Binance regularly destroys up to $30-million in BNB each quarter.

What are the Features of BNB?

Binance Coin is only for use on the Binance trading platform. However, the flamboyant founder and entrepreneur, “CZ,” is doing his best to spread the adoption of BNB into other markets, such as retail. The company recently announced that it’s looking into partnerships with other merchant platforms and companies to expand BNB growth throughout the retail economy.

BNB recently acquired an Australian crypto travel startup called “TravelbyBit,” which services 150-businesses in the Australian travel industry, including Brisbane Airport. Testing is ongoing, and CZ remains confident that BNB will continue to grow in global markets as an alternative to facilitate fast and efficient payments for goods and services.

Other crypto startups are testing the utility of BNB as a payment-based system for point-of-sale solutions in nightclubs and other venues. Binance expects the growth and expansion of BNB to continue as Binance Labs and Binance Launchpad continue to thrive.

What are the Features of BNB?

Binance Coin is only for use on the Binance trading platform. However, the flamboyant founder and entrepreneur, “CZ,” is doing his best to spread the adoption of BNB into other markets, such as retail. The company recently announced that it’s looking into partnerships with other merchant platforms and companies to expand BNB growth throughout the retail economy.

BNB recently acquired an Australian crypto travel startup called “TravelbyBit,” which services 150-businesses in the Australian travel industry, including Brisbane Airport. Testing is ongoing, and CZ remains confident that BNB will continue to grow in global markets as an alternative to facilitate fast and efficient payments for goods and services.

Other crypto startups are testing the utility of BNB as a payment-based system for point-of-sale solutions in nightclubs and other venues. Binance expects the growth and expansion of BNB to continue as Binance Labs and Binance Launchpad continue to thrive.

Pros of Binance Coin

  • Backed by the Binance reputation – BNB is the brainchild of CZ, the founder of the platform, and Binance is one of the leading exchanges in liquidity and volume.

  • Fast transaction times – The BNB protocol can handle 1.4-million transactions per second, making it a lightning-fast alternative to BTC, and even LTC. BNB transaction times can even start putting pressure on Visa and other credit card systems in terms of capacity.

  • Great platform discounts – Binance account holders get excellent discounts on fees on the Binance exchange.

Cons of Binance Coin

  • Limited to The Binance Exchange – BNB has a restriction being that users can only trade it on the Binance exchange. Therefore, you can’t take your Binance Coin and load it onto Coinbase to trade. BNB markets are limited to the Binance platform only.

  • Binance burn strategy may reduce value – The deflationary aspect of the burning strategy by Binance for BNB may be reducing the value of the crypto asset.

How do I Buy BNB?

If you want to purchase BNB tokens, you can do so through your dashboard on your Binance trading platform. BNB is only available for purchase using credit cards or another cryptocurrency.

How Does Bitcoin Compare to BNB?

Bitcoin is a vastly different crypto asset to BNB. BNB is a platform token designed to facilitate trading on the Binance platform. The sole objective of the token is to reduce trading fees with Binance account holders. There are trading markets available in BNB, and the price fluctuates, but its usually between a $10 range at most.

BNB is not an investment-style crypto asset like Bitcoin. It’s more of a trading vehicle, and it doesn’t fulfill all the characteristics of money in the same manner as Bitcoin.

For instance, the value of BNB on the Binance exchange is different from all other exchanges, because none of the other exchanges trade with BNB. Therefore, BNB does not have the same “fungibility” like Bitcoin, which is one of the critical factors of sound money.

BNB serves its purpose as a token, but it doesn’t have much value or utility outside of the Binance trading platform.