Binance Coin is the cryptocurrency of Binance Exchange which is one of the biggest crypto exchanges along with Coinbase, Gemini, and FTX. It is currently the 4th biggest crypto with a market capitalization of over 61 Billion Dollars. In this article, We will discuss its origin, how it became so successful, and answer some frequently asked questions related to the Binance coin.
Origin of Binance Coin
Binance Coin is the currency of Binance Smart Chain and Crypto Exchange. It was created to be used as a utility coin. You could use it for discounted trading fees and rewards on staking. It is traded as BNB on crypto exchanges and it is different from BUSD. Originally BNB was a token on the Ethereum blockchain but later shifted to the Binance Blockchain network after its creation in 2018.
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The Binance Exchange was founded by Changpeng Zhao in 2017 who previously created a high-frequency trading software. The Binance coin was launched soon after with a limited supply of 200 Million coins. It meant that there will only be 200 Million Binance coins and not any more than that.
100 Million of the coins were sold off to the public in an Initial Coin Offering (ICO) in July 2017. The rest 40%, or 80 Million was given to founders and 10%, or 20 Million was given to angel investors. The money collected from the ICO was used to build the blockchain and improve Binance Exchange.
Understanding the Success Of Binance Coin
Binance Coin has seen massive growth over the years. It was launched at less than a dollar per coin but is now valued at over 400$. There are a few factors that helped in such growth and success of Binance Coin. Let us take a look at them.
Creation of Binance Smart Chain
Binance was based on the Ethereum blockchain but later created its blockchain. But it lacked Smart contracts. Smart contracts allow creating of new tokens, Dapps, and NFTs and enable a DeFi Ecosystem. Binance used the code of Ethereum, made some adjustments to it to create their blockchain with smart contracts, and called it the Binance Smart Chain. This allowed for more tokens and exchanges to use the Binance network, increasing the value of the Binance Coin.
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Burning the Coin
Burning is the process of locking away cryptocurrency in an unknown crypto wallet address so no one has access to it and it is lost forever. \We discussed that Binance only has a supply of 200 Million coins. This helps in increasing the value of the coin as there will be a limited supply just like Bitcoin.
Binance further accelerates this process by using 20% of their profits every quarter and using it to buy the BNB from the market and burn it. This lowers the number of available coins and increases their value. The current supply has gone down from 200 to 168 Million.
Wide Application and Partnerships
Binance Coin started as a utility token for the Binance exchange. You can still use it for discounted transaction fees on different Binance platforms, but its applications have grown. It can be used as a payment option on Crypto.com and Monetha. You can buy a monthly subscription to online services like Canva and BitTorrent with it and book flight tickets on Trip.io and TravelybyBit.
You can buy NFTs with it on the Binance NFT and invest in new tokens listed on the Binance Launchpad platform. Partnerships with other brands allow you to buy gift items and lotteries with BNB coins. And you can even use them to take crypto-based loans on ETHLend.
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F.A.Q. on Binance and Binance Coin
Q. What is the Difference between BNB and BUSD?
A. BNB stands for Binance coin, and it is the native cryptocurrency of the Binance Smart chain. It’s an exchange coin and can be used for several applications on the exchange. Its value is constantly changing, and it is not backed by any real currency.
BUSD is an Ethereum-based ERC 20 token. Its value is backed by the value of the American Dollar. It’s a stablecoin since it’s less volatile. The transaction fees on BUSD is extremely low and they will maintain their value over a longer period.
Q. What is the country of Origin of Binance?
A. Binance is registered in the Cayman Islands which is a self-governing British Territory. It was initially founded in China but later moved its servers and headquarters to Japan due to increasing regulations on cryptocurrency.
Q. Is Binance related to WazirX?
A. Yes, Binance is related to WazirX. The popular Indian crypto exchange platform WazirX was acquired by Binance and it currently owns WazirX.
Also, read | How to Signup on WazirX NFT Marketplace to Buy and Sell NFTs
Q. What is Dust?
A. Dust is the Small number of coins or tokens that are left out after trading. Since the value of crypto is ever-changing, there will always be some small amount left in your wallet after trading. Binance allows you to turn this small amount into BNB so you can use it to pay transaction fees and not let it just sit in your wallet collecting Dust.
Wrapping Up
Binance Coin already has a good amount of applications outside the crypto exchange and will see more adoption in the future. This was our article to help you understand more about Binance Coin. We hope that we were able to help you explain all about the Binance coin, understand its origin, and answer some of its frequently asked questions.
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