What is Binance Coin?
Binance Coin is a cryptocurrency that is exclusive on the Binance exchange, which is one of the fastest growing exchanges in the cryptocurrency market. Binance Coin tokens are traded as BNB on the exchange. Based on the ERC20 standard, Binance Coin uses the Ethereum network. The currency is used to pay posting expenses, transaction fees, exchange charges and others on the trading platform. BNB tokens are used in Binance as a way to reduce fees. The coins can also be traded on Binance for other coins. Binance has a unique repurchasing plan by which it will use 20% of its profits to buy back BNB coins and destroy them, until they buy 50% of all the BNB tokens back. Binance eventually aims to destroy 100 million BNB token and leave the remaining 100 million.
Features of Binance Coin
The main aim to use BNB is to get a discount on fees. The discount keeps decreasing year on year in line with the 20% bought back each year. For the first year, users get a fee discount of 50% while in the second year the fee discount is 25%. Going forward, in the third and fourth year, the fee discount is 12.5% and 6.75% respectively. Finally, from the fifth year onward, zero fee discount is offered. In addition to paying fees, the BNB tokens can also be used to invest in the ICOs that are part of the Binance’s Launchpad program.
Where to buy Binance Coin?
BNB is a native token for Bianance exchange and is therefore not listed on any other exchanges. As Binance Exchange does not currently accept fiat currency purchases, it is necessary to buy a cryptocurrency like Ethereum (ETH) or Bitcoin (BTC) before trading it for BNB on Binance exchange.
Binance Coin Mining
BNB token supply is capped at 200 million. BNB tokens cannot be mined.
Binance Coin Wallets
The market capitalisation of Binance Coin wallets at the time of writing this article was $1,517,729,914 while the price of 1 BNB token was $13.31. As BNB is an ERC20 token, it can be stored on MyEtherWallet and Trezor hardware wallet.
Risks involved with investing in Binance Coin
The usage of Binance Coin is limited to the Binance Exchange. Moreover, just like any other cryptocurrency, Binance Coin is volatile and risky in nature. Therefore, we would suggest you to invest in mutual funds instead as they are more secure and reliable.
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