What is BNB in cryptocurrencies
What is Binance Coin (BNB)?
The Binance Coin (BNB) is the native currency of the Binance Chain. Recently, the cryptocurrency has not only made a move, but has made some headlines as well. In 2019 the BNB is in a permanent upswing, why is that and what is special about the coin?
Binance is currently the second largest crypto exchange in the world. Headquartered in Shanghai, the company has a daily trading volume of nearly US $ 3.5 billion in 473 different trading pairs. The trading exchange for cryptocurrencies went online in July 2017 and has grown rapidly since then. At the same time, they start an ICO and issued a total of 200 million Binance Coin. With the ICO, the company wanted to raise funds and attract investors.
At the beginning, BNB was an ERC-20 token and ran accordingly on the Ethereum blockchain. Since April 2019, Binance has launched its own blockchain called Binance Chain. As a result, the BNB Coin also had to move. So the coin switched to its own BEP-2 standard. Owners of the ERC-20 variant must now exchange their tokens for the new version. The name should remain Binance Coin.
BNB can be used for various purposes:
- to pay fees: At Binance, customers can pay the transaction fees with both BNB and the cryptocurrency being traded. The company would like to offer traders incentives to use the native coin as a means of payment with the aim of promoting customer loyalty. If customers pay the transaction fees with BNB it was 50% cheaper in comparison in the first year. In the second year there was a 25% discount. The discount is halved every year up to the 5th trading year. Then there will be no more advantage.
- Initial Exchange Offerings (IEO): Investors can also use the BNB to participate in IEOs offered by the trading exchange. For this purpose, Binance has created its own decentralized exchange.
- BNB as an investment: Trading the coin can also be exciting for traders. Since its inception and the move to its own blockchain, BNB has grown in value significantly. The coin burn also plays a key role in this.
The Binance Coin Burn and why it matters
In the Binance whitepaper, the process of Coin Burns firmly anchored and described in detail. The Coin Burn is powered by some cryptocurrencies. In general, it serves the purpose of increasing the value of a crypto currency and braking inflation. Because if the withdrawal of coins from the market leads to a reduction in the supply, the demand remains the same or even increases. Binance makes use of this basic principle of the free market economy.
When the Binance Coin was founded, the company committed itself to using 20% of its profits every quarter to buy back BNB and burn them. This procedure is continued until half of the originally generated coins, when 100 million BNB have been burned. For reasons of transparency, coin burning is always announced via the blockchain. The last burning took place in April 2019. Over 11 million coins have now been burned.
BNB is experiencing a strong bull run despite the latest hack
On May 7, 2019, it became known that the world's second largest exchange had fallen victim to a major hacker attack. Around 7,000 BTC (Bitcoin) worth over US $ 40 million were stolen. The Binance Coin then experienced a brief setback and fell just below the US $ 20 mark. One would think that such an attack should have a lasting effect on value. But just a few days after this report, Binance recovered from the shock and the coin climbed back to over US $ 26 within a few days. This is the first time it has passed the US $ 25 hurdle and has reached its previous peak value. As if the attack never happened. The Binance Coin forecast also looks good in the long term.
Many believe that the sudden jump may have something to do with recent speculation surrounding Binance. A leaked picture on Twitter is fueling the rumor mill that eBay wants to feel its way into the crypto market. BNB is said to be the primary or possibly the only crypto currency with which eBay customers can pay in the future. With over 179 million customers, eBay is one of the largest online marketplaces in the world. For Binance, this would be a great opportunity to expand its customer base and further promote its acceptance around the world. According to speculations, the cooperation could push the value of the Binance Coin to over US $ 40. Link tip: Binance Coin (BNB) price & charts
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