Is Binance Coin a good investment
What is Binance Coin? Everything you need to know about the cryptocurrency BNB
What is Binance Coin?
Binance Coin, with the ticker symbol BNB, was launched by the renowned crypto exchange Binance. With the aim of promoting trading and developing your own ecosystem around your token. Traders can use the BNB for a variety of uses, including paying trading fees, exchange fees, or listing fees. During its introductory year in 2015, Binance offered a 50% discount on trading, which is reduced by 50% every year and finally ends in year five.
At the time of this writing, the Binance Coin is priced at $ 23.96 with a market capitalization of just over $ 3.4 billion. Binance also allows the coin to be used for ICO (Initial Coin Offering) investments, which are listed in the Launchpad section of the exchange. These new coins will then be offered on the exchange, giving them a stepping stone to start trading.
Is the Binance Coin a type of money?
The main reason for establishing the BNB is to strengthen the ecosystem of the cryptocurrency exchange. At the same time, it also serves to facilitate trading operations for traders on the platform. The tokens can in some cases be used to pay for selected services in the hospitality and tourism sectors, but the general acceptance compared to other currencies has so far been below average. For the same reason, it cannot be classified as a type of money.
Is it legally recognized?
Since the Binance Coin is a native token of a crypto exchange that already complies with all laws and regulations and is mainly used within the platform, there is really nothing that could question the legality of the coin itself. It should be noted that as a trading platform, Binance follows the rules of the KYC and AML regulations to ensure that traders' personal and financial information along with their funds remain safe and secure.
What do people use the Binance Coin for?
BNB can be used for a variety of reasons, including short and long term investments. Some of the most popular uses of the coin include the following:
Invest in BNB for daily trading to generate passive income quickly by taking advantage of the volatility of the cryptocurrency
Use the BNB to pay the Binance exchange listing fee or trading fees to save on transaction costs
Make ICO investments in new cryptocurrency tokens initiated using Binance's Launchpad feature
Staking BNS brands to generate passive income and get airdrops with the help of the Launchpool feature
Which merchants accept Binance Coin?
Binance has used its leverage to enter into partnership agreements with multiple vendors and service providers. This enables the exchange to offer its users the convenience and to spend BNB for a large number of sales outlets. Below are some of the best online and retail stores that accept BNS as a payment method:
TravelbyBit - You can use the service to travel the world and pay with BNB tokens at merchants in Australia
Crypto.com - If you want to pay your credit card bill with BNB, Crypto.com offers you the option to do so
Mithril - With this extended service, you can both stake and move BNB tokens and thus move them quickly and conveniently to the VAULT wallet
Gifto - Use your BNB tokens on this live video streaming platform to purchase virtual gifts with ease
Pundi X- Any business that uses the XPOS device manufactured by Pundi X will accept BNB from you as a valid mode of payment
AERON - You can use your BNB coins to pay for planes in the pilot shop that were powered by Aeron.
Moeda - If you want to invest with your BNB tokens, you can do so worldwide with Moeda
How does Binance Coin work?
Binance Coin took advantage of the Ethereum blockchain and initially relied on ERC20 tokens, which had the capacity to store and hold values. However, these were replaced by BEP2 BNB tokens in April 2019 when the exchange launched the Binance Chain Mainnet.
You do not have the option to mine the coins with the help of proof-of-work or proof-of-stake protocols, as all coins had already been mined beforehand and had already been distributed at the time of the ICO. The BNB coins currently in circulation are primarily used for discounted trading on the stock exchange. The discount rate was originally set at 50% in the first year of introduction, but has fallen by half every year since then.
In the fifth year, the tokens will no longer have a discount that could affect the BNB price. To counteract this depreciation of the BNB, Binance has pursued the strategy of buying back and burning BNB coins in order to limit the supply of coins. Binance plans to burn 50% of the BNB tokens in circulation.
How it all began - the story of the Binance Coin
The Binance Coin was introduced via an ICO in July 2017. This put 20 million BNB coins up for sale for investors, 80 million for various project participants and the remaining 100 million for retail investors who had participated in the ICO. The money raised through the BNB ICO was spent on developing barter, branding and marketing. A certain part of the investment was also used to significantly upgrade the BNB's trading exchange.
Binance Coin Mining - How are new coins made?
BNB cannot be mined according to the Proof-of-Work or Proof-of-Stake Protocol. Instead, it relies on the Byzantine Fault Tolerance (BFT) consensus method, which involves validators who earn the BNB tokens by verifying blocks on the network.
Supply - How many coins are available, what happens when they run out?
Originally, at the time of the ICO, Binance had limited the total to 200 million tokens. However, due to the incineration of the BNBs, which was done to counteract the depreciation, the total and maximum amount of BNB tokens is currently around 176 million. This means that almost 12% of the coins have been destroyed since inception. At the time of this writing, the BNB coins in circulation have a volume of 144 million with a market capitalization of over $ 3.4 billion.
Binance has no plans to create any more tokens and is relying on supply and demand to determine the price of the tokens.
Decentralization - what does it mean?
Decentralization is a concept that states that no single person, regulator, or organization should have complete or substantial control over the governance affairs of a network such as a blockchain. Instead, it is guided by the consensus of the people who contribute to its success and keep the operations going. There are different methods of operating a decentralized network, but they all have one thing in common: no central authority can control it alone.
This makes the network more democratic and unchangeable. It means that nothing can be censored based on the wishes of a few and that all matters are made public to increase transparency.
Invest in Binance Coin
In terms of investments, the Binance Coin is slightly different from other cryptocurrencies. Because it is a local currency on a popular exchange, it has the backing and resources to keep the price relatively stable. Therefore, it is not as volatile as some of the other cryptocurrencies, which often react quickly to market factors. The BNB is comparatively stable, especially in the short term. That means it might not be the best short-term investment incentive, but it is more promising in the long run. Find out how to buy Binance Coin here.
Why should you invest?
If you want to invest in Binance Coin or any other altcoins, make sure you know the underlying cause of your investment. There are a variety of reasons why people trade BNB and other tokens.
You want to make passive income by trading BNB tokens and other cryptocurrencies
You want to get a long term return by holding the BNB tokens for a while
You want to park your capital in a secure and reliable decentralized network
You believe in the Binance Coin project and would like to support it with your finances
Don't forget that different investors have different trading goals and you need a unique and well-designed strategy to achieve those goals. This is why it is important to determine why you want to invest in BNB.
Price and volatility - why is the BNB price so volatile?
When it comes to cryptocurrencies, there is no strict one-handed and centralized surveillance like a state bank's monetary policy. This means that they are completely driven by market forces and sentiment, resulting in high volatility due to a variety of factors including regulations, technology updates, expressions of opinion, virality or social acceptance. Even so, BNB is one of the more stable cryptocurrencies as it is a native coin of an established trading platform.
This means that while the volatility is sufficient to generate profits, it is relatively stable compared to the other tokens that have seen a massive dip and rise within a few hours.
Where to buy Binance Coin
BNB is offered by many cryptocurrency exchanges and of course the native Binance platform is the best place to buy it. However, when looking for other options there are several factors to consider, including fees, ease of use, customer support, and reputation. Three of our preferred and verified trading platforms are listed below:
eToro - One of the best social trading platforms that offer cryptocurrency CFDs and make trading fast, convenient and affordable. With its ease of use, professional analysis, and low fees, eToro is one of the best options.
Plus500 - With years of experience, Plus500 has positioned itself as one of the leading providers of cryptocurrencies. On this platform you can buy BNB and all other popular cryptocurrencies like XRP, BTC, ETH, XLM and more.
FXTB - Another prestigious platform that was created for Forex trading but has used its exceptional market position to become one of the best cryptocurrency exchanges for buying BNB.
Binance Coin Wallets - Keep BNB safe
When buying BNB, do not keep it in the exchange's account for long periods of time as it is quite insecure. This means you need a safer, more robust option. Cryptocurrency wallets, specifically designed to store all types of tokens, are one of the safest options.
What are wallets?
Cryptocurrency wallets are physical devices or software programs with the ability to securely store a wide variety of tokens and digital assets, including Binance Coin, Bitcoin, Dash, Bitcoin Cash, Iota, Ethereum, Tezos, Monero, Ripple and more. They have modern security features to keep your money safe for a longer period of time.
What types of wallets are available?
When looking for the best wallet to hold your BNB tokens in, there are several options you need to consider.
Web wallets use browser extensions or are built into the cryptocurrency platform that you can easily access using your credentials. They're easy to use, but don't have a lot of security features.
If you are looking for more portability and want to trade on the go, you need a mobile wallet. Mobile wallets are offered as iOS or Android apps that you can install on your mobile phone to store your cryptocurrencies. These wallets offer adequate security and features. Some of Binance's mobile wallets include Atomic Wallet, Exodus, and Coinomi Wallet.
These are software programs that you can install on your Windows or macOS computer to store your tokens. They offer more security features and offer integrated trading which can be very useful for traders. Coinomi, Exodus, and Atomic wallets are good options.
If you prioritize security over everything else, a cold or hardware wallet is your best bet. They are completely separated from the external networks, which can make devices vulnerable. They also offer leading security features like passphrases and 2FA. You can use Ledger Nano S and Trezor to store the Binance coin.
You also have the option of combining different types of wallets for the best features of a wide variety of wallets including reliability, security, convenience and ease of use. You can use Ledger Nano S in combination with the Atomic wallet.
Storing the wallet on an exchange, the possible advantages and disadvantages
While there is nothing fundamentally wrong with storing your BNB in a swap account, it is not the best idea to keep your tokens there for long periods of time. While crypto exchanges offer improved usability, ease of use and quick access, they are not the best in security. That being said, if the website is temporarily unavailable, hacked, or breached, your BNB tokens will either get stuck or may be stolen.
What are the pros and cons of Binance Coin?
BNB offers a number of advantages, but also some disadvantages.
Binance Coin benefits
As already mentioned, using BNB saves fees when trading on Binance. In the first few years in particular, up to 50% of the fees can be redeemed by using BNB. The coin is now also used as a means of payment, for example on the Binance Lunchpad or with other providers around the crypto exchange. All in all, BNB has so far been able to record satisfactory profits. Due to the artificial shortage and the planned coin burn, the trading platform is aiming for a positive value development of the coin. Since BNB is a classic ERC20 token, it can also be stored on an external wallet outside of Binance.
Binance Coin cons
Since the Binance Coin is an exclusive coin of the Binance crypto exchange, it can only be used on the platform. Investors and traders are tied to the exchange because the coin has no purpose on other trading venues. Accordingly, the coin and its value are always closely linked to the success of the crypto exchange. BNB help with active trading on the platform and save considerable transaction fees, especially in the first few years. With the coin, Binance created an ideal opportunity to attract potential interested parties and to bind traders to the platform. Nevertheless, this bond can also be viewed critically, as the coin was only created for a very specific purpose.
The future of Binance Coin
The already mentioned shortage of the coin should help it to increase in value in the future. Of course, there is no guarantee that this will actually happen. Nevertheless, it can be assumed that due to the great popularity of the coin and the crypto exchange behind it, a positive development is possible. Of course, there is also a risk in this, because the whole construct behind the token is dependent on the success of the Chinese stock exchange.
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