What is Binance Coin (BNB)
What is Binance Coin (BNB)
It is an ERC-20 type token built within the Ethereum blockchain and was launched just with the launch of the centralized exchange. A total of 200 million BNB tokens were issued in July 2017 in an ICO to finance the development of the exchange. Subsequently, the coins were transferred to the platform's own blockchain called Binance Chain .

This cryptocurrency incorporates a mechanism that reduces the amount of BNB in circulation. The burning of 100 million BNB (50% of the initial issue) is planned, which will mean an adjustment in the price of the currency. The long-term idea is that the price becomes more stable.

Note that BNB cannot be mined, as all the coins have been issued.

What is Binance Coin (BNB) for

This cryptocurrency is created to be able to pay for transactions within the platform's exchange. Binance Coin can be used on the blockchain, at third party exhcange , to make everyday payments , for different research and development projects , for the recently launched Binance Smart Blockchain (BSC).

The current uses of Binance Coin are:

Transaction fees: Performing transactions within the Binance Chain has a discount on transaction fees.

Discount on trading: During the launch the trading commissions within Binance with the BNB cryptocurrency had a 50% discount. Currently the discount offered in transactions is 25%.

User levels: Those users who have large amounts of BNB and who have been trading for a period of 30 days have access to the VIP level . This level, among others, offers additional discounts on tranding fees.

Trade: BNB can be exchanged for other cryptocurrencies , both on its own exchange and on a third-party exchange.

Non-tradeable conversion: Those who have cryptocurrencies in their Binance account that can no longer be exchanged (called "dust"), can be converted to BNB.

IEO Lottery: Binance has a program called Initial Exchange Offerings (IEO). This system allows users to request a kind of lottery tickets according to the amount of BNB tokens they have. The winning tickets allow the winner to obtain a certain amount of BNB tokens.

Governance: Those who have BNB have the right to the governance mechanism of the Binance Chain . The level of entitlement depends on the amount of BNB leveraged

Payments: Physical stores can accept payment for goods and services through the BNB cryptocurrency.

Binance Smart Chain (BSC): Launched in September 2020 as a blockchain development company parallel to the Binance Chain. BSC is a smart contracts platform that is compatible with the Ethereum EMV. It allows tools, applications and anything else created through smart contracts on Ethereum to be ported and deployed on BSC. Binance Chain and BSC can exchange assets and information as they are very similar in architecture.

BNB Features

We can highlight the following benefits that BNB offers us thanks in part to its Binance Chain blockchain. These are:

Fast transactions: This cryptocurrency can theoretically support up to 1.4 million transactions per second.

Security: Binance uses a system of clusters and tiers to safeguard funds. Additionally, these funds are backed by a safe assets fund for users (SAFU)

Discounts: If we operate BNB exchanges with any other cryptocurrency or token we will have a 25% discount.

Payments: Merchants can support Binance Coin, like any other cryptocurrency, to pay for goods and services.

Privacy at BNB

One of the characteristics of Bitcoin and Etuereum , among other cryptocurrencies , is high privacy . Privacy is only "broken" when we carry out a transaction in these cryptocurrencies. To preserve privacy in transactions, it is recommended to use an address for each transaction, since the possibility of generating addresses is almost infinite.

Binance Coin at this point is quite a bit worse, as this cryptocurrency is on the Binance exchange. To operate on Binance you must go through a process called "know your customer" (KYC) and "anti money laundering" (AML) which remove the privacy feature.

We must bear in mind that any incoming, outgoing or intra-platform transaction will be recorded by Binance and by the governments with which it "collaborates". This eliminates the privacy of the user in an irreparable way.

Binance Coin (BNB) -vs- Bitcoin (BTC)

Let's now see the differences between both cryptocurrencies:

Bitcoin on the other hand is a growing issuance with a limit of 21 million. BNB has an initial issue against BTC, which has a gradual issue.

Processing capacity: Currently Bitcoin supports between 5-8 transactions per second , which is very little. As they indicate, Binance Chain , the blockchain on which BNB works, has the capacity to support up to 1.5 million transactions per second.

Privacy: The use of Bitcoin is free and does not require permissions or disclosure of personal information for its use. BNB operates on Binance, a centralized exchange that requires verification of our identity, which suppresses privacy.

Decentralization: Bitcoin works in a decentralized way in its entirety. The problem with BNB is that it has been developed for a decentralized exchenge, so its decentralization is really limited.

Consensus: Both cryptocurrencies have consensus rules for their use that must be respected.

Final words from Binance Coin (BNB)

This cryptocurrency shares some properties with respect to the rest of the cryptocurrencies on the market. The particularity of Binance Coin is that it has been developed to be used in the centralized exchange of Binance. Although it can be used by third-party exchanges or by merchants to accept payments, the offer in these senses is still scarce.