Binance coin (BNB) is a native cryptocurrency of the world’s largest exchange platform by daily transaction volumes named Binance.
Among the various cryptocurrencies that exist, one of the most famous is BNB. As the name implies, it is the token of Binance Smart Chain, a trading platform that performs the following functions:
- as an exchange, it allows users trading cryptocurrencies and making profits;
- as a platform, it can be used for creating and applying smart contracts;
- being a platform for creating DApps;
- as well as a digital wallet in which you can store your cryptocurrencies.
In terms of daily transaction volumes, Binance is the largest exchange in the world (according to coinmarketcap).
The success of Binance Coin
Binance Coin was launched in 2017 as a trading currency for use on Binance. It was initially worth a few cents per coin, but within a few months its value increased by 2000%. The cryptocurrency continued to rise in the following years, reaching $330 in February 2021 and $670 in May of that year. Its value has fluctuated slightly over the past 12 months, settling near $300 at the end of May 2022.
Binance Coin’s success has certainly depended on the popularity of the exchange platform on which it relies. BNB uses a consensus algorithm called Proof-of-Stake (PoS), which is tasked with validating transactions that have been executed. This algorithm does not include cryptocurrency mining.
Today, the Binance Smart Chain platform has a fairly extensive ecosystem. And day by day, developers worldwide add some new features to the community of BNB owners.
Benefits offered by the cryptocurrency
For users who are trading on Binance, utilizing the BNB token is quite beneficial. In fact, by using it to pay commissions, you can get attractive discounts (even on services offered by the platform). However, over the years, the number and size of discounts has decreased.
Like all other cryptocurrencies, Binance Coin can also be exchanged for other tokens or converted back into fiat money. These transactions can be done on the Binance exchange, which due to its popularity is almost always the best option available to investors.
How to Buy Binance Coin
Investors who want to buy Binance Coin directly can rely on trading on exchange platforms (such as the aforementioned Binance). Alternatively, you can bet on trading with CFD (contracts for difference) brokers such as e-Toro or BitPanda. In the latter case, you don’t own the cryptocurrency directly, but you can speculate on its rise or fall. However, by buying Binance Coin directly, you can trade the digital currency or use it as an investment expecting prices to rise and making possible profits. To do that, obviously, you need to buy the token when it’s cheap and resell it when prices go up.
The best way to understand when to perform these transactions is to monitor Binance Coin’s fluctuations with updated price charts.
Those who are interested in mining should keep in mind that this activity is not possible with Binance Coin, because this cryptocurrency is not based on PoW (Proof Of Work) consensus algorithm. But it is possible to earn on it, giving coins to staking. At the moment the profit is 5% per year.