What Is BNB Crypto? Exploring Its Uses

The diverse landscape of the cryptocurrency and blockchain industry encompasses a multitude of projects and assets with distinct objectives.

It is not uncommon to observe initiatives addressing similar needs.

Within this industry, numerous crypto exchanges coexist, each tailored with unique structures and features.

Despite the variations, their overarching purpose is to provide a platform for cryptocurrency traders to exchange assets.

In some instances, a cryptocurrency exchange may introduce its own native asset, serving specific functions within its ecosystem, such as facilitating fee discounts on the trading platform.

An example of such a crypto exchange asset is Binance Coin (BNB), valued at $302 on the Binance exchange.

BNB started with Binance’s ICO, giving users lower trading fees.

It has grown beyond a simple exchange tool for Binance, becoming vital to their expanding ecosystem.

what is BNB crypto
BNB is the native token of Binance, the largest cryptocurrency exchange in the world by daily trading volume Photo source (Binance)

Binance Coin’s history

Binance exchange introduced Binance Coin in July 2017 through an ICO.

In the ICO, investors purchased 100 million BNB tokens at 15 cents each, generating $15 million in Bitcoin and Ethereum.

The allocated funds supported platform upgrades (35%), branding and marketing (50%), and emergency reserves (15%).

Initially, BNB operated as an ERC-20 token on the Ethereum blockchain.

Binance swiftly launched its exchange platform a few days after the mid-2017 ICO.

In 2019, Binance introduced its native blockchain, Binance Chain (BC), along with the native BNB coin.

Users exchanged their BNB ERC-20 tokens for the new BNB coin through a token swap in 2019.

How does Binance Coin work?

BNB operates like other digital assets, experiencing fluctuations in value based on usage and trading.

Users can store BNB in compatible wallets, conduct direct transactions, and purchase it through platforms like Binance’s exchange, ensuring adherence to relevant laws.

Technically, Binance’s layer-1 blockchain forms the BNB Chain, previously known as the Binance Smart Chain and Binance Chain.

Tailored for optimal trading performance, it serves as the foundation for Binance DEX, the decentralized exchange.

Transactions on the Binance coin Chain use the gas token BNB (Build and Build).

The chain comprises the BNB beacon chain for governance and participation in staking, and the BNB Smart Chain for consensus, Ethereum Virtual Machine compatibility, and multi-chain hubs.

Binance Coin (BNB) Burning

Binance regularly uses part of its quarterly revenues to buy and burn Binance Coins, wiping them out completely.

This started in 2017 and will persist until 100 million BNB coins, half of the original maximum supply, are acquired and eliminated.

This systematic burning lessens the supply of Binance Coin, affecting its rarity and potentially affecting its value.

Binance also has the BNB Pioneer Burn Program, compensating Binance coin holders for unrecoverable losses and subtracting the amount from the next BNB burn.

What is Binance Coin (BNB), and how does it work?
Image courtesy (Binance)

What is Binance Coin used for?

Binance Coin’s role aligns with Binance’s evolution from a fundraising tool for the exchange to a key asset in the growing Binance ecosystem.

BNB is integral to various Binance products and services, offering fee reductions on the exchange and extending benefits until July 13, 2022.

It has expanded beyond the exchange to be accepted by merchants, used in entertainment, and even employed for investments in stocks and ETFs on diverse platforms.

BNB’s versatility extends to collateral for loans, splitting expenses, and facilitating payments among friends and relatives.

BNB pricing and dynamics

BNB’s price has historically mirrored the fluctuations common in the crypto market.

Its market cap has exceeded $70 billion, a substantial growth.

Initially priced at $0.10 during Binance’s ICO, BNB has surged to over $600 per coin at times, potentially proving profitable for early investors.

Whether Binance Coin remains a good investment hinges on future price movements, making it uncertain but intriguing for prospective investors.]

Read more: Is Buff a Crypto Miner?

Binance and regulation

Since its establishment in 2017, Binance swiftly became a major player in the crypto industry.

In 2021, Binance encountered regulatory hurdles in various regions.

The UK’s Financial Conduct Authority instructed Binance to cease all UK-regulated activities, citing lack of authorization.

In Malaysia, authorities filed criminal complaints against Binance for unauthorized operation as a virtual asset service provider.

While Binance removed US customers from its main exchange in 2019, it introduced Binance.US to cater to US users.

In response to regulatory scrutiny, Binance plans to establish additional offices worldwide, obtain licenses in operating jurisdictions, enhance compliance measures, and phase out high-risk activities.

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