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11/08/2021

Binance coin - more than a virtual currency

The popularization of the Internet has undoubtedly revolutionized the world of finance. This sector has opened up in recent years to the general public, mainly to individual investors, thanks to online crypto trading. 

New forms of currencies are created to exchange, trade, invest and trade online, known as virtual currencies or cryptocurrencies. 

Better known by the acronym BNB, Binance Coin is one of the world's leading cryptocurrencies. But it is also the name of a cryptocurrency exchange platform. 

Binance is now among the most important cryptocurrency exchange platforms.  

Binance: a cryptocurrency exchange platform 

Over the past few years, Binance has carved out a major place for itself in the world of cryptocurrency exchanges. The company is among the top 5 best crypto exchange platforms in the world. 

Since its creation, the company has experienced fast expansion and become a leader in a field where competition is fierce.

History of Binance:

Binance's website came into existence in 2017. The founder and CEO of the exchange platform is Zhao Changpeng. The group's headquarters are based in Hong Kong. 

The site was up and running from the first day of launch and the platform rapidly became successful with traders and investors.  

In just a few months, Zhao Changpeng became a billionaire. A year later, he was featured in Forbes.

Note that the name Binance is a portmanteau of the words binary and finance.

In 2020, the health crisis caused by the spread of Covid-19 slowed down the world economy and affected many business sectors. However, the sector in which Binance operates seems to be out of danger and is even experiencing a favorable business environment. In April 2020, the company bought CoinMarketCap, a data provider of cryptocurrency markets.

In the wake of this, the group also announced the launch of a new type of marketplace for NFTs, or non-fungible tokens, which enables the creation, purchase and sale of digital collectibles.

Regulations:

Binance is not regulated by global institutions. Furthermore, it is impossible to determine the official address of the company's headquarters. 

In 2018, Bloomberg ruled that Binance's headquarters are in Malta. Two years later, the Malta Department of Financial Services issued a statement. This institution notes that the MFSA has not given Binance a license to operate in cryptocurrencies.

Binance's business and revenue stream:

On the platform, traders and investors can:

  • Store cryptocurrencies 
  • Buy and sell, exchange crypto-currencies for other crypto-currencies or fiat currencies like the dollar or euro. Binance currently allows trading on a hundred cryptomineries including Bitcoin and Ethereum.
  • Perform financial transactions such as SEPA bank transfers and fund an account from a bank account.

The company's main source of revenue is the commission charged per transaction. The rates applied are among the lowest in the market. For this reason, the platform is very popular with traders.  

The charge rate is approximately 0.1% of the transaction amount for withdrawals and exchanges. Registration and deposits are free.

What is Binance coin?

The Binance platform works primarily with Binance Coin, the cryptocurrency known by the acronym BNB.

Description

The Binance coin or BNB is a cryptocurrency created by the Binance platform which corresponds to one ERC-20 token. The BNB crypto is generated on the Ethereum blockchain.  

BNB is positioned third after Bitcoin and Ethereum in terms of capitalization. For the record, cryptocurrency is a digital currency created and used exclusively on the internet. These virtual currencies are used to make purchases, sales and financial transactions such as trading.  

Binance Coin can be exchanged for other cryptocurrencies through the peer to peer trading system. Like fiat currencies, the Binance coin has a monetary value that fluctuates depending on many factors.

Price of a Binance Coin 

Binance started its ICO or Initial Coin Offering with its BNB cryptocurrency. Via the Ethereum blockchain, the company generated twenty million BNB tokens. Another 100 million tokens were shared among the ICO participants. 

The sale of the tokens allowed for the development of exchanges and the strategic development of the brand. Currently, the price is over $406.

Mechanical increase of the BNB value

Apart from the upward fluctuation determined by the cryptocurrency market, the value of a Binance Coin rises mechanically and periodically. The Binance company uses part of its profits to burn BNB of the same value that it has in reserve. 

This mechanism increases the value of active BNBs. Reducing the monetary volume of outstanding BNBs increases the unit value of a Binance coin.

Can you mine BNB?

Cryptocurrency mining is a complex process requiring the use of blockchain. It is a system that allows the creation of digital tokens. In the case of Binance coin, mining is not allowed. 

The two hundred million or so tokens in circulation are pre-mined and already created. Moreover, the creation of new tokens is contrary to the system set up by Binance to increase the value of the BNB. 

To date, nearly ten million tokens have been destroyed to maintain the value of the BNB and to limit bids.

The observable mining period is that of the fundraising initiated by the start-up. That is, eleven days before the official launch of BNB. As all BNB tokens are active and circulating on the market, no more tokens can be mined.

Where can you buy Binance?

The best way to acquire and store BNB tokens is to register on the Binance website. The platform offers different services, including wallets in hardware form or as applications or software. 

The use of the new Binance DEX exchange, a decentralized system, has improved the holding and storage of BNB tokens. The new decentralized start-up uses all of the classic features employed on the Binance.com website. The Trust Wallet is the official name for the BNB token wallet.

Since the Binance coin is among the main cryptocurrencies, most online brokers allow the purchase of BNB. Purchases can be made through PayPal, credit card and bank transfer. 

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