Binance Coin is an intriguing cryptocurrency that has proved popular among Canadian investors. It serves as the native token on the world’s most popular crypto exchange, Binance, where it can be used to participate in ICOs and IEO investments.
Binance Coin has also provided traders with discounted fees when buying and selling crypto on the Binance exchange, so it has generated a great deal of publicity. This Binance Coin trading guide helps you identify the best sites to buy Binance Coin, and arms you with all the information you need about this altcoin.
Binance Coin (BNB) began life in 2017 as the native cryptocurrency for the Binance exchange, which was founded by Changpeng Zhao in China. Binance has been on a wild ride since launching in 2017, having quickly established itself as the world’s most popular crypto exchange by visits, liquidity and overall trading volume. The business has had to perform a globetrotting act after feeling the heat from regulators, moving to Japan, Taiwan and Malta before ending up in the Cayman Islands.
Yet Binance continues to go from strength to strength, and that has benefited anyone that decided to buy Binance Coin in the early days. BNB began trading at just US$0.08 when it launched in July 2017 and had reached US$8.86 by December that year. Binance Coin peaked at US$36.41 in July 2019 before tumbling amid bearish conditions.
Yet many people decided they wanted to buy Binance Coin during the long bull run of 2020, as it helped them unlock discounted fees on Binance, and it shot up in value. In January 2021, BNB set a new all-time high of $42.44, giving it a market cap of around $6 billion. The list of use cases for Binance Coin has increased over the years, and it has managed to hold down a position among the top 10 largest cryptocurrencies.
Zhao and his team developed Binance Coin as an ERC20 token on the Ethereum blockchain. They sold BNB tokens to crypto enthusiasts and ploughed the proceeds into developing the Binance ecosystem, and boosting branding and marketing efforts.
In April 2019, Binance Coin moved off the Ethereum blockchain and onto its new custom blockchain, Binance Chain. Old Ethereum-based tokens were destroyed as new BNB tokens were created on Binance Chain in order to maintain a constant supply across both networks. Binance Chain Explorer and Web Wallet opened to the public on April 23, 2019.
Zhou wanted Binance to become a broader ecosystem as opposed to a straightforward exchange like its rivals. Binance Coin is the native cryptocurrency, which allows it to reduce its reliance on traditional money when fuelling this ecosystem.
Binance initially offered users a 50% discount on trading fees when they used Binance Coin to pay those charges. Anyone that wanted to buy crypto currency online could buy Bitcoin, buy Bitcoin Cash, buy Ethereum and so on, but pay the fees in BNB rather than fiat currency or another cryptocurrency, and receive a much better deal, which created the initial demand for people to buy Binance Coin. However, the discount halved each year, dropping to 25% in 2018, 12.5% in 2019, and 6.25% in 2020, and it will soon be phased out, so that is not really an incentive to buy Binance Coin any longer.
The initial total supply for Binance Coin tokens was 200 million. The founding team took 80 million BNB, 20 million went to angel investors and 100 million were earmarked for ICO participants. Binance also uses 20% of its profits on a quarterly basis to buy Binance Coin and burn it. This is designed to reduce supply and make the remaining tokens more valuable.
The inaugural Binance Coin burn saw Binance snap up 986,000 BNB and destroy them, equating to 0.49% of the total supply. More than 11.5 million BNB had been burned by the time it migrated to the Binance Chain in April 2019.
The value of BNB has shot up by more than 40,000% since it launched, but Binance’s profits have also increased substantially, so it has managed to continue burning a significant amount of BNB each quarter. In January 2021, it destroyed 3.6 million coins, equivalent to 1.81% of supply, as part of the 14th burn.
Binance Coin is now the native coin on two blockchains within the Binance ecosystem: Binance Chain and Binance Smart Chain. The former is optimized for ultra-fast trading, while the latter provides a fully-fledged environment for developing high-performance decentralized apps (dapps). It was designed to address scalability issues and allow smart contracts that do not congest the network.
Binance Coin never set out to usurp Bitcoin. It is more focused on facilitating a huge number of transactions per day in the role of an application-level token. The Binance team wants it to eventually fuel billions of transactions each day, and while it is nowhere close to achieving such an ambitious target, it is good to dream big.
You can buy Binance Coin and trade it for various other cryptocurrencies on sites that allow Canadians to buy crypto online. You can also use it to pay credit card bills on Crypto.com. A few ecommerce retailers allow you to spend Binance Coin on things like travel, hospitality services and consumer goods, but adoption is much lower than the likes of Bitcoin, Litecoin and Bitcoin Cash.
Yet merchants can offer BNB as a means of processing payments, and the list is increasing with each passing year. Several platforms allow people that buy Binance Coin to invest in stocks, ETFs and other assets using BNB. It can also be used as collateral for loans on certain platforms, and anyone that holds BNB can pay friends and family or split bills using it.
Binance Coin uses the Tendermint byzantine-fault-tolerant (BFT) consensus mechanism. It requires validator nodes, witness nodes and accelerator nodes, who are tasked with speeding up the validation process. Fees are distributed among the three groups once blocks are produced.
You can buy Binance Coin and use it to make quick, secure transactions online. However, the Binance exchange has been hacked in the past. It was attacked in May 2019, when hackers snatched 7,000 Bitcoins from unsuspecting members.
If you are planning to take part in regular Binance Coin trading and engage in Litecoin trading, XRP trading and so on, you might like to keep your BNB in the Binance exchange spot wallet. However, it might make sense to buy Binance Coin and transfer it to an external wallet if you plan on holding it for a longer period of time, or using it for other purposes. Software wallets are popular, but hardware wallets are generally safer. Always beware Binance Coin trading scams. If something sounds too good to be true, you should perform due diligence and walk away if you suspect foul play.
First off you need to find the best Binance Coin trading sites. You can read Binance Coin trading reviews to help you identify the exchanges that best suit your requirements as a trader. eToro, Coinbase, Coinmama and CEX.io are among the sites that offer Binance Coin trading, but most people buy Binance Coin on the Binance exchange.
Binance did not achieve its market leading position without delivering an impressive array of features. Some beginners might prefer a slightly more user friendly site like Coinbase, but Binance offers more advanced tools, cheaper trading fees and more coins to trade.
If you decide you want to buy Binance Coin at Binance, visit the site and click on the yellow box that reads “Register” at the top of the homepage. Enter your name and email address, move the jigsaw piece to the middle of the screen to prove you are not a robot and agree to the terms and conditions. You will have to complete a two-factor authentication process whenever you log into your account. It simply requires you to enter a code sent to your phone.
If you click the “Buy Now” button, you will bring up the buy / sell box. It will automatically be set to buy. Set your currency as CAD and choose BNB as the coin you wish to buy. Enter the amount you would like to spend in CAD, and click “Buy BNB”. You will then be presented with the amount of BNB you will receive, and the Binance fee, and you can confirm the transaction if you are happy with it.
If you buy Binance Coin and have it in your account, you can sell it, exchange it or trade it with ease. Binance is arguably the best Binance Coin trading site, but the buying and selling process is similar at rival sites. You can click “Withdraw” if you want to move your BNB to an external, hard wallet for safe keeping.
The future outlook of Binance coin is a fascinating subject. On the one hand, its chances of future success could be dented when it no longer offers discounted fees for traders on the Binance exchange. You might therefore expect a bearish Binance Coin price prediction.
However, those discounts have dropped from 50% to 6.25% in recent years, and BNB has remained in the top 10 or 11 cryptocurrencies by market cap. The Binance Coin price has continued to increase, and many a Binance Coin prediction that expected it to fail has proved incorrect.
Its fortunes are inextricably linked to the success of the Binance ecosystem, including the exchange, the Launchpad and its two native blockchains. If the Binance team succeeds in turning it into a genuine rival to Ethereum, Binance Coin could flourish long into the future. The Binance Smart Chain was released towards the end of 2020, and within one quarter of launching it reached roughly 40% of Ethereum’s network activities, which represents a very encouraging start.
Within just a few months, more than 100 projects were using Binance Smart Chain, 15 wallets linked up with it, 820,000 unique addresses were created and 3 million BNB were staked by validators. If Binance Smart Chain maintains its upward curve, Binance Coin could benefit from its association and its status as the native token within this broader ecosystem.
Most people that buy Binance Coin are happy with the service they receive. If you buy Binance Coin on the Binance exchange, the process should be very smooth, quick, simple and effective, and you can then use Binance Coin throughout the ecosystem.
Some BNB holders would prefer it to have more retail uses and broader adoption, while they have understandably expressed their disappointment when the discounted trading fees were halved. However, Binance has always been transparent about this process, and it has worked hard to maintain BNB’s relevance even as the discounts are being phased out.
Binance has a broadly positive reputation among the crypto community. Most people agree that it is the best trading platform, as evidenced by the large trading volume it handles and the visitor numbers it receives on a daily basis. It is known to list new currencies as soon as an ICO is finished, and the development team constantly tweaks and improves the offering.
Make sure you choose a reputable Binance Coin trading site with high liquidity, low slippage, reasonable fees, a strong user experience and a robust recent security record. Many choose to buy Binance Coin at Binance, which is recommended, but you can also buy it at various other exchanges if you already have an account with them. It might make sense to store your Binance Coin in an external wallet as an extra safety precaution, and a hard, offline wallet is generally the safest option.
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