How to buy the Binance Coin – Trading tutorial for beginners
- How to buy the Binance Coin – Trading tutorial for beginners
- What is Binance Coin (BNB)?
- What makes BNB a good potential investment?
- What you need to know before investing in Binance Coin
Binance Coin (BNB) is the original token of Binance Exchange, one of the largest cryptocurrency exchanges in the world. And many have said that the market cap is over $3.15 billion and the daily trading volume is over $230 million. Because of its strong base and more and more use cases, it ranks among the top ten on Coinmarketcap. It can also be easily sold on multiple platforms including Binance and eToro.
With prices rising in recent weeks, it’s worth asking if Binance Coin is a perfect investment or if its explosive growth has been exaggerated. Let’s dive into it and see if BNB is a good investment.
(Risk warning: Your capital can be at risk)
What is Binance Coin (BNB)?
Binance Coin (BNB) is a cryptocurrency that can be used to trade and pay trading fees on the Binance platform. Binance Exchange is the largest cryptocurrency exchange in the world as of January 2018, with over 1.4 million transactions per second, and to date, it continues to be one of the top crypto exchanges in the world. Binance Coin users receive a discount on transaction fees on Binance Exchange as an incentive. BNB can also be exchanged for other cryptocurrencies such as Bitcoin, Ethereum, Litecoin, etc.
Binance Coin was created in July 2017 and after working on the Ethereum blockchain with the original ERC-20 token, it became Binance blockchain’s currency, Binance Chain.
Uses of Binance Coin
Like other emerging cryptocurrencies, Binance Coin offers a number of uses in addition to Binance Exchange, including:
- Transaction: Binance Coin can be exchanged for other cryptocurrencies on other exchanges depending on the restrictions imposed by the exchange.
- Transaction fees on Binance Exchange: BNB can be used to pay for transactions on Binance Exchange, and consumers also get a discount on it.
- Credit Card Payment: BNB can be a payment method for cryptocurrency credit card bills on Crypto.com.
- Payment: Affiliates can provide BNB as a payment method to their customers, increasing the flexibility of payment methods.
- Travel Management: BNB can be used to book hotels and flights on certain websites.
- Entertainment: From virtual gift payments to ticket purchases, BNB serves a variety of purposes in the entertainment industry.
- Investment: Multiple platforms allow investors to invest in stocks, ETFs, and other assets with Binance Coin.
- Loans and Transfers: BNB can be used as collateral for loans on certain platforms. There are also apps that allow users to share their bills and pay their friends and family via Binance Coin.
- Reduced transaction fees: By paying Binance’s trading fees in BNB, consumers can get a 25% discount on their fees.
- Binary Account Level: VIP Level is offered to consumers with a 30-day GNI account balance plus a cumulative trading volume above a certain threshold, with additional discounts and benefits.
- Dust Conversion: Users can convert various cryptocurrencies called Dust into an irrecoverable amount of BNB Binance accounts.
- IEO Lottery: Binance Initial Exchange Offers (IEO) is implemented using a lottery allocation determined by the number of BNB users held.
- Own Binance Chain token: Similar to how Ether (ETH) is used to pay fees on the Ethereum blockchain, BNB is used to pay fees on Binance Chain. BNB must be traded on Binance DEX.
- Spending in cryptocurrency form: In addition to being used on the Binance platform, BNB can be used for payments in a variety of ways, such as travel, credit card fees, donations, and more.
There may be other uses of BNB not covered here, but in general, BNB can be used to pay for goods and services like any other cryptocurrency if the seller has accepted it.
The primary creation of Binance Coin and ICO
Binance Coin originated in July 2017 with an initial coin offering (ICO). As part of the ICO, BNB tokens have been distributed to various participants, including business angels and the Binance team.
Here is a brief summary of how BNB tickets were originally distributed.
- Induction Team: 40% (80 million BNB)
- Business Angels: 10% (BNB 20 million)
- Public Sales: 50% (100 million BNB)
All 100 million BNB tickets sold to the public during the ICO were sold for 15 cents per ticket. Thus, Binance has raised a total of $15 million in Bitcoin and Ethereum. Of the $15 million raised, 35% was spent modernizing the Binance platform and exchange system. 50% participated in Binance branding, marketing, and innovative training. The remaining 15% was used as a reserve in emergency or unexpected situations.
Burning of Binance coin
According to Binance white paper, Binance uses 20% of its profits every quarter to buy Binance Coin again, burn it, and destroy it completely. Binance has continued to carry out quarterly incineration. The last and most incineration is the 13th quarter and this took place on October 17, 2020. Binance will buy and continue to burn quarterly until it destroys 100 million Binance Coins, which is 50% of its total supply. Through the strategy, it hopes to make Binance Coin limited, rare, and more valuable.
Strong foundation of BNB reveals Profit potential for investors
Binance Coin (BNB) originated from Binance, one of the largest cryptocurrency exchanges in the world. Binance is a partly-regulated cryptocurrency exchange that allows you to trade over 100 cryptocurrencies. Trading apps for Android, Apple, and Windows are also available. In terms of trading volume, this is one of the largest cryptocurrency exchanges in the world.
Binance’s success cannot be ignored and represent the possibility of making a profit by investing in BNB. The platform offer crypto swaps with various cryptocurrencies and new cryptocurrencies are constantly being added. In most cases, transactions are made in exchange for BTC, ETH, USDT (Stablecoin), or BNB. With outstanding products and leadership, Binance is one of the most trusted cryptocurrency exchanges globally. The CEO Changpeng Zhao has loads of Twitter followers, where he frequently announces Binance development to the followers.
Binance is best known as an exchange but has also launched several other projects. Many people are working to improve the entire cryptocurrency and blockchain ecosystem. Binance Labs is an incubator aimed at empowering and investing in cryptocurrency and blockchain companies. Binance Labs also offers advice in areas such as finance and the creation of crypto tokens.
Binance has launched several educational initiatives. Binance Info offers fundamental information about each crypto coin such as price, market cap, 24-hour trading volume, and more. The site also has links to research reports that are part of the ways Binance manages accountability problems. There are many details about various individual cryptocurrency projects. In addition to basic information such as project overview and features, it includes financial, management, technical overview, and more. Binance Academy offers free educational videos on blockchain, cryptocurrency, economy, and security. The content also includes tutorials.
As the name suggests, Binance Launchpad is an easy-to-use crypto token launching platform made user-friendly for companies. This allows Binance Coin holders to invest their tokens in selected projects. For example, Binance 2019 launched the BitTorrent Launchpad to the blockchain world and launched the Initial Exchange Offer (IEO), for concord with IEO offering staking service in 2020.
Binance Charity Foundation (BCF)
You can donate to BTC and choose one of the submitted projects or donate to the Binance Charity Wallet, which allows the BCF to distribute funds at its own discretion between supported targets.
Binance also offers wallets. Trust Wallet is available for iOS and Android and supports any ERC20, ERC223, or ERC721 ticket. There is also an App browser that adds verified DApps to Trust’s DApps Market.
Binance Coin is subject to at least a second review. It starts with a trusted but not fully regulated exchange and offers many attractive features (many trading pairs, trading apps, close team, and customer support). It has also successfully launched several blockchain projects, including helping the entire ecosystem. But is that all it takes to make an investment attractive? Let’s dig deeper into BNB to find out if it is a good investment.
What makes BNB a good potential investment?
Popular coins increase in value as demand increases. Binance support really helps with adoption as the exchange brings millions of users. Binance Coin has several attractive features, most of which are purely for users. Once released, there were more ways to spend BNB than many other cryptocurrencies. And new apps are still coming, and more new apps will be added in 2021.
Burning of tokens every quarter
One characteristic that many investors can appreciate is BNB’s quarterly incineration of tokens. In short, every quarter, 20% of the platform’s revenue is used to repurchase and burn tokens (sent to an inaccessible address). It is a common mechanism to increase the value of each coin by reducing the supply.
Regular burns will continue until a total of 100,000,000 BNB tickets are gone, which is 50% of the total. The number of tokens burned depends on the volume of transactions for a given period.
Binance and BNB cards
In April 2020, Binance launched the Binance Card, a cryptocurrency card. In this case, your Binance account will take over the role the bank plays with your regular card. You can fund your account with the Biobank Card app and use your card like a regular debit card. It has been announced that more than 46 million offline sellers in 200 locations will use the card.
Also, there are no monthly or annual fees. This card is currently in beta testing. The card was settled in several European markets including Spain, France, Germany, and Italy in August 2020. It will be released in the United States shortly after the requirements are met. How is Binance Coin related to Binance Card? BNB is one of the two cryptocurrencies currently on the card, and the other is Bitcoin.
(Risk warning: Your capital can be at risk)
BNB betting on Binance Chain
Binance Coin can now bet on the Binance Chain Trial Network, a new blockchain that aims to create an alternative trading platform for issuing, using, and exchanging decentralized digital assets with DEX. BNB has been the original symbol of the platform from the start, but the introduction of staking means passengers can earn annual interest. 3,000 BNBs were originally distributed as awards via the BNB test network, and the main net is scheduled for August or September 2020.
BNB as security
Kava, a decentralized financial platform (DeFi) that provides guaranteed loans (similar to MakerDAOs) to USDX, launched Kava stablecoin on the Cosmos blockchain in the summer of 2020 and chose Binance Coin as collateral. The company said it plans to include other cryptocurrencies as security in the future, including Bitcoin (BTC) and Ethereum (ETH), but BNB is the only option currently available. Kava was one of the projects launched on the Binance Launchpad, and this may be one of the reasons BNB was chosen as the first security. In addition, Kava Platform Developer Kava Labs has partnered with BNB Investor Club, BNB to raise awareness and market BNB applications on DeFi.
In summary, Binance Coin has been launched and is supported by one of the largest cryptocurrency exchanges in the world. The burn rate provides a limited supply (it drives demand, so the price increases), and the transaction fee discount drives consumption and increases the usefulness of the coin. When using Launchpad, BNB is also the only ticket you can use to buy tickets for sale. This is the original ticket for Binance DEX; a recently launched decentralized Binance Exchange, and has become the original mark of the Binance ecosystem. There are also several use cases where something new is always added. Given the number of previous partnerships and new applications, the BNB hypothesis is steadily increasing and showing no signs of the end.
What you need to know before investing in Binance Coin
BNB may seem like a very attractive investment, but there are a few things to remember before investing in Binance Coin. The following points are not meant to deter investing, but to encourage you to consider all aspects.
First, reliance on Binance can be a problem for some investors. Unlike Bitcoin, BNB originated from Binance, a well-known organization. Therefore, functionality and profitability are closely related to the popularity of the Binance platform. Of course, if something goes wrong with Binance, the BNB will be affected.
Second, Binance is a key exchange. Centralized exchanges often offer their own advantages, including advanced features and tools, user-friendliness (improving user experience), and perhaps most importantly liquidity. However, there are also downsides. Your funds are kept on the exchange, and the users are not allowed to hold their money. Centralized exchanges require KYC (Know Your Customer) and AML (Anti-Money Laundering) processes, which are sometimes tedious and infrequent. It also increases the risk of hacking and theft compared to its decentralized competitors. Reuters reported in 2016 that 33% of all bitcoin exchanges had been hacked since its launch in 2009. In addition, decentralized exchanges are putting more pressure on central exchanges.
Third, you can question its usefulness. Without the smart contract feature, you cannot use Apps on Binance. Apps have been existing for a long time, but the lack of this feature doesn’t necessarily exclude tokens. For BNB, the lack of smart contracts is offset by other use cases, such as the Binance Chain token.
The issue experienced by many tokens is distribution. Whether tickets are defined as security is an important moment in the project. There are many new regulatory issues that need to be addressed if the token is classified as secure. Often, tokens cannot be sold in attractive markets such as Canada or the United States. For Binance, this threat can be particularly important as the company has had similar problems in the past. And because of that, they transferred to a more controlled country-Malta.
As mentioned earlier, the above aspects are not meant to prevent investments in BNB. This is because the platform’s useful features (the usefulness of the Binance Chain) outweigh some drawbacks (e.g. lack of smart contracts), while other “disadvantages” have unique advantages like a centralized exchange. However, it is important to know the contradictions.
What factors affect the coin price?
In this part of the guide, we examine the factors that may affect cryptocurrency prices. It helps you to monitor the market and predict progress and decline based on current events.
The predictions reviewed here are generally based on the principles of technical analysis. For obvious reasons, they cannot take into account unpredictable events, so understanding how various factors can affect the price of a particular asset allows you to make smart investment decisions based on changing events. Let’s take a look at the three most important factors that can affect Binance Coin price:
Supply and demand
The relationship between supply and demand can always be considered a common factor in determining the price of Binance Coin. The relationship itself depends on many factors, but most importantly, if supply exceeds demand and demand increases more than price, the price of supply falls.
Total supply of Binance coin
We’re all used to dividing bitcoin’s total supply in half. This event happens about every four years and cuts the price of mining new blocks in half. Like Bitcoin, Binance Coin has the highest total assets. When first launched, the total offering was limited to 200 million, but Binance Exchange deliberately destroyed Binance Coin tokens over time.
The goal is to cut the supply in half until 100 million Binance Coins are available. This is to control the supply of cryptocurrencies and keep prices at a stable level. As the Binance fee discount offered to users by Binance Coin decreases annually, the team expects the value of BNB to decrease over time as well.
By reducing the total supply, Binance can control supply and demand. Over time, it will have a positive effect on the price of Binance Coin.
Another key factor that can affect the price of Binance Coin is the success of the ICO participating in the launchpad Binance plan. Helping Binance launch many new popular cryptocurrencies means that it gives Binance Coin users more options to trade their tokens. As there are more incentives to trade on the Binance platform, which is owned by BNB, the demand for Binance Coin will increase.
Storage and staking of Binance Coin (BNB)
Binance Coin (BNB) is supported by a variety of hardware and software wallet providers. Choosing between hardware and software wallets is essentially a balance between consumer convenience and security. Let’s take a quick look at this section.
- Hardware wallets (e.g. Ledger) are wallets that store private keys of offline wallets, not usually stored online, and only the owner knows the keys. This may be the safest storage option since the user completely owns the coin, but it is the least practical as the user has to use additional tools to use the cryptocurrency.
- Non-storage software wallets (e.g. Trust Wallet, Atomic Wallet) are the next security options compared to hardware wallets, but they are probably more convenient. The user also owns the private key, but there is a high risk of losing money because the wallet is stored on an online device (e.g. phone), which allows hackers to access devices connected to the internet.
- Finally, the most convenient but risky way to store money is to store money in a secure wallet (e.g. a central exchange like Binance) because the user does not own a private key for the funds. Hacking the vault could lead to the loss of consumer funds that occurred in the famous event of 2014. Hac Gox recorded a huge loss of 850,000 BTC, most of which came from customer funds.
(Risk warning: Your capital can be at risk)
Conclusion: Binance Coin is one of the most popular cryptocurrencies
All in all, Binance Coin is a possible investment in cryptocurrencies. As Binance Coin is one of the most popular cryptocurrencies on the market at the moment, it opens up great chances for traders. Like any other cryptocurrency, you should always be aware of saving your cryptocurrency safely. A wallet is always needed. For Binance Coin, there are a few wallet options that can be recommended. Moreover, don’t forget that Binance Coin has a big community of traders behind the cryptocurrency. Feel free to get in touch with other traders and analyze the falls and downs of the currency together.
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