What Is Binance Coin? (BNB)

Last updated Mar 05, 2024 | 05:14 PM UTC

Have you heard about Binance Coin?

It may sound familiar, but you might still need some more information.

What is Binance coin, and what are its specific qualities, essence and usage?

I've prepared a detailed, but succinct guide, so you can familiarize yourself with the coin’s features and applications.

This article will also cover the following topics:

  • The history of Binance Coin
  • Core features of the token
  • Benefits and drawbacks of using it
  • Details about BNB coin  price history

Let's begin!

Binance Coin: A Quick Explanation

Binance Coin is a digital cryptocurrency issued by the Binance crypto exchange.

It has a BNB ticker on trading charts and continues to increase in popularity among worldwide users.

 What is the BNB base?

BNB initially ran on the Ethereum network but then turned into the native currency of the Binance chain.

It appeared during an initial coin offering (ICO) in 2017, with a limited maximum of 200 million tokens. 

As part of the ICO, it offered 10% BNB coins to angel investors, 40% tokens to the founders, and the rest of the 50% to different participants in the ICO process.

Binance utilizes one-fifth of its gains to rebuy and permanently burn or destroy Binance coins kept in its treasury. 

These burns occur every quarter, thus decreasing the total supply of coins.

As of May 28, 2022, BNB became the fifth-largest crypto based on market capitalization, behind Bitcoin, ETH, Tether (USDT), and USD Coin.

Binance Coin History

Binance coin’s history is not long. 

Established in 2017, the coin has quickly flourished in the crypto market and become an irreplaceable option for many people around the world.

Its launch was part of an Initial Coin offering in July 2017, which saw the distribution of BNB tokens to different participants. 

It looked like this:

  • 40% of tokens went to the Founding Team (80 million)
  • 10% of coins to Angel Investors (20 million)
  • 50% of the coins went to The Public Auction (100 million)

The ICO also saw the sale of all 100 million BNB tokens at the price of 15 cents each. At the same time, Binance took $15 million in Bitcoin and Ethereum from the ICO.

What Is Binance Coin: Initial Coin Offering

The provider used 35% of the raised amount for the upgrades of the platform and exchange system. In addition, it used 50% for marketing, branding, and education.

Finally, the rest of the 15% was kept as a reserve in case of emergencies and extraordinary circumstances.

After working on the ERC-20 network for some time, Binance launched its exchange platform 11 days after the end of the mid-2017 ICO. 

It launched the native blockchain in 2019 known as Binance Chain (BC). 

This led to the launch of the BNB native coin, where users received BNB coins as a replacement for ERC-20 via a token swap in 2019. 

Now that we have explained Binance coin, let’s also dive into the platform's operations.

Shortly after its launch in 2017, it became one of the major platforms in the crypto market.

However, the brand faced difficulties in 2021 from different regions such as the Cayman Islands, Malta, Japan, the Netherlands, the United Kingdom, Malaysia, and Thailand.

One of the problems it faced was in 2017, when The United Kingdom Financial Conduct Authority ordered the company to stop all U.K. regulated activities.

According to the regulator, Binance lacked the required registration, authorization, and license to conduct its operations.

Only a month later, Malaysian authorities filed a criminal complaint against the brand for working as an unallowed virtual asset service provider (VASP).

If we take a look at the company’s position in the United States, the situation is still unclear. 

The country did not ban the company from performing its activities; however, it  investigated Binance. 

The investigation started in 2018, with the main focus on the brand’s compliance with U.S. anti-money laundering prescriptions and sanctions. 

The majority of federal prosecutors involved in the process believe that the currently gathered evidence justifies taking aggressive measures against the brand, as well as filing criminal charges against executives and the founder Changpeng Zhao.

However, other officials involved in the case have advised the collection of further evidence. 

We have yet to see what will happen in the upcoming period. 

How Does Binance Coin Work?

How does Binance coin work? This may be an enigma for people who've never used it before.

However, things are not so complicated, so we'll try to explain them quickly.

BNB consists of two blockchains - BNB Beacon Chain and BNB Smart Chain.

What Is Binance Coin: BNB Blockchains

The first one governs the BNB Chain involving staking and voting. Another one is a smart contract platform compatible with the widely known coin Ethereum.

However,  is Binance coin proof of stake?

The short answer is a resounding yes!

To authenticate all transactions on the network, BNB Chain benefits from a proof of stake mechanism.

This blends elements of the proof-of-staked authority with the proof-of-authority system.

BNB Chain consists of 41 validators, alongside 21 blocks of transactions

To become a validator, customers first need to stake a minimum of 10,000 BNB tokens to become one of the selected candidates.

However, other holders of BNB can also become delegators and engage in staking behind selected candidates. BNB Chain typically elects 21 candidates and names them validators. 

As a result, validators take part in governance decisions.

For participation in the validation process, users and delegators get block rewards for each block of transactions. 

These rewards come from BNB Chain's transfer fees.

BNB Burning

Binance uses a good part of its revenues every quarter to reclaim and burn Binance coins. 

This leads to the entire destruction of coins. It is worth noting that Binance has been carrying out these burns since 2017.

The platform will proceed to burn BNB coins until it has bought and demolished 100 million coins, or half of the original maximum supply. The process reduces Binance Coin's supply and impacts its rarity, which can also affect the value of assets. 

Binance is also famous for its BNB Pioneer Burn Program. As part of the same, it estimates certain instances in which BNB holders irretrievably lost their coins, and repays them. 

This deducts the sum from the upcoming BNB burn.

Real Benefits of Binance Coin

You have your answers to these crucial questions: What is BNB Binance? When was Binance coin launched? Therefore, it's time to learn about other elements of crypto.

Before deciding to purchase some coins, you need to know their pros and cons.

Let's explore the key benefits of BNB.

Unique Burndown Policy

Burning is an important feature of BNB that guarantees its growth and steadiness.

Binance utilizes 20% of its gains to reclaim tokens and burn them. 

This reduces the total supply of BNB.  The company also looks to continue with the same practice until only 100 million coins remain.

A deflationary nature of the coin could also result in increased prices, leading to more speculations. 

Fast Transactions  and Low Fees

Binance enables fast transactions, with the most affordable fees in the sector stabilizing at around 0.1%.

Fees and speed are related. If a blockchain is busy with regular transactions, it leads to higher transaction fees.

In theory, Binance can tackle up to 1.4 million transfers per second. In addition, the platform allows traders to claim prizes to raise interest among customers.

Users of the platform can also benefit from discounts to pay their fees. 

This is an excellent incentive for people and a good way to build an increasing community of customers. 

Binance Exchange Is Popular

BNB has become one of the most popular cryptos thanks to the Binance platform and its reputation. 

Binance is a fast-increasing company and one of the major crypto exchanges, with a range of cryptocurrency pairs.

The enterprise has closed various partnerships in the market, including the deal with Uplive - a social video entertainment brand.

The company also takes care of security, despite some breaches it experienced in the past. This has enhanced the credibility of the coin and helped to speed up its adoption.

Real Drawbacks of Binance Coin

However, Binance is far from the ideal crypto for people interested in buying it.

Many of them will probably wonder “is Binance coin a good investment”?

While this depends on your personal preferences, you should also consider the drawbacks of the popular coin.

High Centralization

Binance is a well-known crypto exchange looking to make profits in the market.

The company has full control over BNB, with up to 80% of tokens held by the brand in various wallets.

The control over the token is not great news for the holders, because the company can decide who will be a validator.  

This opens up the space for different malpractices related to double spending and blockchain manipulation.

Regulators’ Disapproval

Since Binance appeared in the market, it has had to face many challenges. Regulators from different countries used to accuse the brand of non-compliance.

In April 2017, Germany’s BaFin warned that Binance “risked being fined for offering its securities-tracking digital tokens without publishing an investor prospectus”.

Two months later, the company faced accusations from Japan’s Financial Services Agency for not having regulatory approval to operate in Japan. 

In addition, Thailand’s Securities and Exchange Commission submitted a complaint against the company in July 2021. 

The extent of regulators' disapproval may be a reason to worry, despite the company’s commitment to meet all the requirements.

Tough Competition

Binance has received massive attention from people around the world. However, Ethereum 2.0 could impede the coin’s success. 

A new ETH project will make a great impact in the crypto market, with the potential to outshine all the competitors like BNB.

Another threat to Binance progress is Cardano, which has recently adopted smart contracts, with some of the most progressive features.

Binance Coin Price History

Is Binance coin worth buying?

Such decisions depend on different factors, most importantly price fluctuations.

You can also consider past performance if you want to make better decisions and predictions regarding the future price.

Historically speaking, BNB appeared in 2017 in the crypto gambling market. 

The first three years of its existence saw the price fluctuating anywhere between $1 - $40. In 2021, the coin recorded its all-time high while reaching $690.93 on 10 May.

The summer season of 2021 saw a 30% decrease when the crypto dropped below $400.

However, the Binance coin slowly returned to its stable value in November 2021, reaching $600.

The beginning of 2022 wasn't so successful for the token, which decreased to $371.37 on 24 January, and to $361.23 on 24 February.

Between March to April, the value of BNB oscillated between $360.30 to $459.81. 

 How much is Binance coin today?

At the time of writing this review, the BNB’s price is $247.93. This is significantly lower than its all-time high.

Despite all the fluctuations, Binance Coin was one of the top 10 most expensive cryptos in 2022.

How Many People Own Binance Coin?

Is BNB coin a good investment and how many people possess this popular crypto?

Right from its beginnings, BNB marked a steady growth. In 2017, the exchange had more than 1.5 million users.

A year later, the platform had already reported about 13.2 million users. 2019 was equally successful for the brand, as it registered 16.5 million customers.

From that point on, BNB made regular progress in the market, reaching 21.5 million users in 2020 and 28.6 in 2021.

Based on the company’s research, more than 48% of users are hobbyists.

At the same time, more than 15% of the customers say that they utilize the platform as their main source of income. 

Interestingly, more than 90% of customers are males, with an average age of 35 years. 

What Is Binance Coin Used For? 

One of the main questions you may have is “what is BNB coin used for”?

Apart from using it on popular crypto exchanges, people can utilize the coin for other purposes.

Below you can find the most common applications of the coin, other than exchanges and trading:

  • Travel arrangement bookings. You can book your flights and hotels with the token.
  • Entertainment. This includes purchasing different gifts, lottery tickets, and many more.
  • Investments. You can also invest in different assets such as stocks or EFTs.
  • Loans. Another option is using BNB as collateral when applying for a loan on popular platforms

What Is Binance Coin: BNB Use Cases

When it comes to companies that accept BNB payments, the list includes Trip.io, Travala.com, TravelbyBit.com, VIBE, AERON, Loom Network, BitTorrent, Canya, and more.

What Is The Future Of Binance Coin?

From the present perspective, it is tough to predict the future of Binance Coin.

Cryptocurrencies are volatile, and most predictions are usually wrong and based on an algorithm.

As the economic situation constantly changes, the value can go up and down in a matter of hours or days.

Your decision on whether or not to buy BNB should always be logical and backed by proven parameters.

Focus on current market trends, but never underestimate other sources like expert opinions, technical analysis, and the latest crypto news. 

This will be a proven method for making the right predictions about the BNB price and making optimal decisions.