Binance Coin (BNB) Explained
Binance Coin (BNB) Explained

Binance Coin (BNB) Explained

By Thatsjanrey | Crypto by thatsjanrey | 14 Jan 2022


Do you want to know what BNB or Binance Coin is? What is it for and why is it possible for its value to increase? So read this article to the end to find out.

What is BNB?
BNB or Binance coin is the native coin within the Binance ecosystem or within the Binance Smart Chain, for those unfamiliar Binance is the largest crypto exchange in the world it will compete with Coinbase, Kucoin and others.

When BNB launched in 2017, it was an ERC20 token running using the Ethereum Network and that time it had a supply of 200 million BNB coins but now BNB has its own network and the total supply of BNB coin decreased.

So originally BNB didn't really have such a big purpose other than being a native coin within the Binance ecosystem but everything changed with the sudden explosion of Ethereum where the cryptocurrency that first implemented the so -called Smart Contracts, this was a revolutionary idea where we can create applications using the blockchain, because here you can also create various tokens in the blockchain, mint NFT's, games and more. During this time DeFi or Decentralized Finance also exploded which is also powered by Smart Contracts, basically too much can be done with cryptocurrencies due to the existence of Smart Contracts.

So why are we talking about Smart Contracts?
Because this is one of the reasons why BNB will be a better crypto, because when the Smart Contracts explode, Binance launched their own version of Binance Smart Chain, so it also has Smart Contracts like in Ethereum, so what anything that can be done in Ethereum like making tokens, minting NFT's, having DeFi, making apps and games and other complex things can also be done in Binance Smart Chain but so far it is better in Ethereum because it has low transaction fees here at Binance Smart Chain and even faster unlike Ethereum which has a high gas fee and the transaction is a bit slow, but instead of making their own code they just modeled or copied what the code in Ethereum so they have the same features and of course they just changed something to make it faster and make transactions cheaper.

Of course before we invest in a cryptocurrency we must know what its use case is or what it can do? but before that do you know that the price of the lowest value of BNB according to coingecko is only around $ 0.05 and that was 4 years ago and its maximum value was around $ 700.

What is the use case of BNB?
1. Trading
Of course, just like any cryptocurrency you can also trade or swap BNB to another crypto.

2. Transaction Fees and Trading Fees
So within the Binance Ecosystem you can use your BNB to reduce fees or get discounts on various features of Binance.

3. Credit Card Payments
You can also pay BNB with your credit card but of course not all credit cards are available, mostly on crypto related credit cards only.

4. Payment
Other online stores also accept BNBs as payment for their products or services.

5. Book Hotels and Flights
You can also use BNB to book your travels, from Binance partners like travala.com.

6. Loans
So BNB can also be used as collateral for loans using other crypto platforms.

7. Charity Donation
Using BNB you can donate to Charity partners of Binance.

8. Binance Liquid Swap
With your BNB, you can also become a liquidity provider or provide liquidity to Binance to make it easier to swap different cryptocurrencies.

9. Binance Launchpad
So for those unfamiliar, this launchpad is an exclusive token launch platform using Binance, its aim is to support new crypto or new crypto projects. Many cryptocurrencies have also been launched using Binance Launchpad, I know every month or every other month new tokens are launched here, so if you have a BNB you can stake it so you can farm new tokens on the launchpad and eventually when officially listed on Binance you can also sell it. So basically it's like free money. Of course you just stake and then you'll have new tokens and many people participate in this because it's so easy and at the same time you'll earn more money.

10. DEX
So like Uniswap and Ethereum there is also Dex or Decentralized Exchange that runs on Binance or the Binance Smart Chain and this is PancakeSwap and it is one of the most popular and used Dex in the world, you can swap tokens to new tokens, there are pools, there are farms and many other functions using BNB here at PancakeSwap and of course there are also many scam tokens that appear here at PancakeSwap so be careful there as well.

Why is it that the value of BNB has the potential to increase?
So I said earlier that BNB originally had a total supply of 200 million BNB coins, so that's a lot but now the total circulating supply of BNB is only around 160 million BNB coins, this is because of Tokenomics that BNB has which is having what is called coin burning so its supply decreases and when that happens the price of BNB which is based on the pre-history of BNB and so on will potentially increase. So every 3 months Binance permanently burns the BNB supply, the BNB that is burned is based on the overall quarterly trading volume in Binance and this will continue until the total supply of BNB reaches only 100 million BNB coins or 50% of its total original total supply.

 

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*DISCLAIMER*

 

The content of this article is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. 

 

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Thatsjanrey
Thatsjanrey

I love writing articles about crypto.


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