What is BNB coin and What you Can Do with It

What is BNB Coin?

At its core, Binance Coin (BNB) is the native cryptocurrency of Binance, one of the world's largest and most prominent cryptocurrency exchanges. It emerged as a fundamental element of Binance's ecosystem, serving diverse functions beyond traditional trading.

The Genesis of Binance Coin

To understand Binance Coin, we must first unravel the history of the Binance exchange itself. Binance Coin was conceived as part of Binance's Initial Coin Offering (ICO) in July 2017. During the ICO, 100 million BNB tokens were made available to the public at a price of 15 cents each, raising a total of $15 million in Bitcoin and Ethereum. The funds generated were strategically allocated, with 35% dedicated to upgrading the Binance platform, 50% allocated to branding and marketing efforts, and the remaining 15% reserved for emergencies. (source: wikipedia)

Originally, BNB was an ERC-20 token built on the Ethereum blockchain. Binance, wasting no time, launched its crypto exchange platform shortly after the conclusion of the ICO. However, a pivotal shift occurred in 2019 when Binance unveiled its native blockchain, aptly named Binance Chain (BC), along with the BNB coin native to this blockchain. Users were offered a token swap, transitioning their BNB ERC-20 tokens to the new BNB coins on Binance Chain.

How to use BNB tokens?

At its core, BNB operates much like any other digital asset, with its value subject to market supply and demand dynamics. Users can hold BNB in compatible wallets, facilitating peer-to-peer transactions, payments, and investments. To acquire BNB, individuals can utilize various avenues, including Binance's own exchange. 

On a technical level, BNB Chain, formerly known as Binance Smart Chain, forms the underlying infrastructure. BNB Chain is tailored for optimal on-chain trading performance and serves as the foundation for Binance's decentralized exchange (DEX), Binance DEX. Transactions on BNB Chain require a blockchain gas token called BNB (Build and Build), formerly known as Binance Coin. BNB Chain comprises the BNB beacon chain for governance and the BNB Smart Chain, which is Ethereum Virtual Machine compatible and supports multi-chain hubs.

Binance Ecosystem Integration

BNB's versatility is epitomized by its integration into various facets of the Binance ecosystem. It serves as a fee reduction mechanism on the Binance Exchange, where users holding BNB tokens enjoy substantial trading fee discounts. This incentive encourages traders to utilize BNB for transactions, fostering its utility.

Payment Method

Merchants can accept BNB as a form of payment, providing customers with an array of payment options. This flexibility enhances BNB's adoption in the broader commercial landscape.

Entertainment Industry

BNB finds applications in the entertainment sector, from purchasing virtual gifts to acquiring lottery tickets, underscoring its role in enhancing user experiences beyond traditional financial transactions.

Investment and Collateral

Outside the Binance ecosystem, BNB has found utility as an investment vehicle. It can be used to invest in stocks, exchange-traded funds (ETFs), and various assets on different platforms. Some lending platforms accept BNB as collateral, allowing users to secure loans with their holdings.

P2P Payments

Applications designed for peer-to-peer payments enable users to split expenses and settle payments with friends and family using BNB, adding a layer of convenience to everyday transactions.

BNB Burning

A unique feature of Binance Coin is its periodic burning, a process initiated by Binance itself. Each quarter, Binance allocates a portion of its revenue to repurchasing and permanently removing BNB coins from circulation. This strategy aims to eliminate 100 million BNB coins, effectively halving the original maximum supply. The reduction in BNB's supply enhances its rarity, potentially impacting its market value. Furthermore, Binance has introduced the BNB Pioneer Burn Program, compensating BNB holders who have lost their tokens, with the reimbursement amount deducted from the subsequent BNB burn.

The Multifaceted Utility of Binance Coin

Binance Coin's evolution mirrors the expansion of the Binance ecosystem. Originally conceived as a fundraising instrument for the Binance exchange, BNB has evolved in tandem with Binance's growth. Binance's transformation from a simple exchange platform into a multifaceted crypto conglomerate has seen BNB's role diversify.

One of BNB's primary utilities is facilitating reduced trading fees on the Binance Exchange. Users holding BNB tokens receive substantial fee discounts when conducting transactions on the platform using BNB. This incentive remains in effect until July 13, 2022, offering a 25% reduction in trading fees.

Moreover, BNB has seamlessly integrated into various Binance products and services. Merchants can accept BNB as a payment method, enhancing the range of options available to customers. In the entertainment sector, BNB serves multiple purposes, from purchasing virtual gifts to acquiring lottery tickets.

Outside of the Binance ecosystem, BNB is increasingly utilized for investments in stocks, exchange-traded funds (ETFs), and other assets on various platforms. Some lending platforms accept BNB as collateral, allowing users to secure loans. Additionally, specific applications enable the splitting of expenses among users and facilitate payments to friends and family using Binance Coin.

BNB Pricing and Dynamics

Binance Coin price history reflects the typical volatility of cryptocurrency markets. Since its ICO, BNB has experienced substantial price fluctuations, ranging from mere cents during its ICO to over $600 per coin at certain points in its history. Whether BNB proves to be a lucrative investment in the future remains uncertain, as market dynamics continually evolve.

Binance and Regulatory Challenges

As Binance rapidly rose to prominence after its launch in 2017, regulatory hurdles became a prominent concern in 2021. The exchange faced regulatory actions in multiple jurisdictions, including the Cayman Islands, Japan, Malta, Netherlands, Malaysia, the United Kingdom, and Thailand. Notably, the UK Financial Conduct Authority ordered Binance to cease all regulated operations in the country due to a lack of authorization and licensing. Malaysian authorities also filed a criminal complaint against Binance for operating as an unauthorized virtual asset service provider (VASP).

The United States posed its own set of challenges for Binance. In 2019, Binance excluded US customers from its main exchange but introduced Binance.US, a platform designed to cater to US users. In response to heightened regulatory scrutiny, Binance pledged to establish additional global offices, seek licenses in each jurisdiction of operation, enhance compliance measures, and phase out or restrict high-risk products.

Binance Coin (BNB) has emerged as a pivotal asset within the crypto industry, seamlessly integrating with the Binance ecosystem and serving a multitude of functions. Its history, from ICO to native blockchain, reflects the rapid evolution of the crypto space. While BNB's future price trajectory remains uncertain, its versatility and adaptability underscore its continued relevance. Nevertheless, Binance's encounters with global regulatory challenges highlight the complex landscape in which cryptocurrencies and exchanges operate. As the crypto community anticipates the unfolding developments in the crypto regulatory sphere, Binance Coin remains a symbol of innovation and adaptability in a dynamic industry.

BNB official website: https://www.binance.com/en/bnb