What Is Binance Coin?
Binance Coin (BNB) is a cryptocurrency created and issued by Binance, the world’s largest cryptocurrency exchange by trading volume. It was launched in 2017 as a utility token to provide discounted trading fees on the Binance platform. However, BNB has since evolved into a multi-purpose asset with a variety of use cases within the Binance ecosystem and beyond.
Key features of Binance Coin include:
- Payment of transaction fees: BNB’s primary function is to facilitate fee payments on both the Binance exchange and Binance Smart Chain (BSC), a blockchain platform developed by Binance.
- Access to Binance features: Users can leverage BNB to participate in various activities on Binance, such as staking to earn rewards, borrowing funds, and gaining early access to new token launches through Binance Launchpad.
- Payments for goods and services: BNB is increasingly accepted by merchants as a payment method for both online and offline transactions.
- Binance Coin is a cryptocurrency exchange asset that was created by the Binance exchange.
- Binance Coin was initially sold during Binance’s ICO and was designed to help users pay lower trading fees on the platform.
- Binance Coin has since become an important part of Binance’s ecosystem, serving a variety of purposes beyond just trading fees.
What Is The History of Binance Coin (BNB)?
Binance Coin (BNB) was launched in July 2017 as part of an initial coin offering (ICO) by the Binance exchange. During the ICO, 100 million BNB tokens were sold for 15 cents each, raising a total of $15 million in Bitcoin (BTC) and Ethereum (ETH) from various participants, including angel investors and the Binance founding team.
Of the $15 million raised, 35% was allocated to upgrading the Binance platform and exchange system, 50% was earmarked for branding, marketing, and education of new innovators, and the remaining 15% was set aside as a reserve for emergencies or unusual circumstances.
Initially, BNB was an ERC-20 token built on the Ethereum blockchain. However, in 2019, Binance launched its own native blockchain called Binance Chain, which introduced the blockchain’s own native BNB coin1. Users were able to exchange their BNB ERC-20 tokens for the new BNB coin via a token swap.
Today, Binance Coin is one of the most popular exchange tokens in the world. It is used to pay for transaction fees on the Binance exchange and offers users discounts on trading fees. Binance Coin has also been integrated into various blockchain-based applications and services, such as decentralized exchanges and payment gateways2.
Overall, Binance Coin’s history is closely intertwined with the history of the Binance exchange, and its evolution from an ERC-20 token to a native blockchain coin reflects the exchange’s commitment to innovation and growth in the cryptocurrency industry.
What Is Binance Coin (BNB) Used For?
Binance Coin (BNB) was initially created as a fundraising vehicle for the Binance exchange. As Binance expanded into an ecosystem under the Binance brand umbrella, BNB grew in tandem.
BNB has several use cases, including paying for transactions on the Binance Exchange. Historically, BNB has been used as a method of fee reduction on the Binance crypto exchange, with customers of the exchange paying lower fees by holding BNB and paying platform fees in BNB.
Merchants can also accept BNB as a form of payment, giving customers more options in terms of payment methods. BNB has also become a component of other Binance products, including Binance’s decentralized exchange (DEX), two blockchains, a peer-to-peer (P2P) crypto trading option, an option for crypto borrowing, and more3.
On some platforms, BNB can be used as collateral for loans. Some apps also allow users to use Binance Coin to split expenses and pay friends and relatives. Furthermore, BNB is used for various things in the entertainment industry, from paying for virtual gifts to purchasing lottery tickets.
Overall, Binance Coin has several use cases within and beyond the Binance ecosystem, making it a versatile asset for those looking to invest in cryptocurrencies or use them for day-to-day transactions.
What Are The Tokenomics of Binance Coin (BNB)?
BNB has a maximum supply of 200 million, of which 153 million are in circulation, according to data from CoinGecko4. However, it’s important to note that the BNB burn mechanism is actively withdrawing BNB from circulation, meaning the total supply could drop in the future. BNB has a market capitalization just shy of $50 billion and reached an all-time high of $686.
How Has Binance Coin (BNB) Traded In The Past Year, And What Is The Binance Coin Price Prediction?
BNB has gained just under 30% in the past year, which is a modest performance when compared to the rest of the market. However, if we zoom out, we find that the token has rallied by over 5,200% in the past five years, pushing its value from a mere $5 to its current price of $316.
Coincodex5 is very bullish on BNB with a 2024 high price target of $1k, which would imply a 300% surge from its current price point. They expect BNB to trade between $400 and $900 between 2025 and 2028.
Changelly6 expects BNB to have a poor 2024, with an average end-of-year price target set at $302. However, they expect things to improve in the long term, with a $600 target for 2025 and $700+ for 2026.
Remember that crypto prices are extremely volatile, and you should always do your own research before risking your capital. Nothing in this post should be considered as financial advice.
Final Thoughts on Binance Coin
Binance Coin (BNB) is closely linked to the Binance exchange, and as a result, it has enjoyed huge success in the past few years. It has become an extremely popular chain for developers as it offers a smart contract platform with low transaction fees, fast speeds, and good security. The BNB token has struggled in the past year largely due to the regulatory scrutiny of Binance by the SEC, but it has nonetheless rewarded long-term investors with huge returns.
Frequently Asked Questions
What are the primary uses of Binance Coin (BNB)?
Binance Coin (BNB) has several primary uses, including paying for transaction fees on the Binance exchange, participating in token sales on the Binance Launchpad, and purchasing virtual gifts on the Binance DEX. Additionally, Binance has also partnered with several merchants who accept BNB as a form of payment.
How can one convert Binance Coin (BNB) to USD?
To convert Binance Coin (BNB) to USD, one can trade BNB for USD on several cryptocurrency exchanges, including Binance, Bittrex, and Kraken. Additionally, Binance has also launched its own fiat-to-crypto trading platform, which allows users to buy and sell cryptocurrencies, including BNB, using fiat currencies.
What is the significance of BNB since its initial launch?
Since its initial launch, Binance Coin (BNB) has grown in popularity and has become one of the top cryptocurrencies by market capitalization. BNB has also become an integral part of the Binance ecosystem, with several use cases, including paying transaction fees and participating in token sales.