What is Binance Coin?
Binance Coin (BNB) is Binance Chain’s native crypto token and performs various functions on the network.
Binance coin is an Ethereum-based (ERC-20) token that can be used to trade cryptocurrencies and pay fees on the Binance exchange. The increase in the global use of Binance Coin reflects the popularity of the Binance exchange, which has become one of the world’s largest cryptocurrency exchanges in terms of transaction volume.
The Binance coin was created to provide an alternative payment method for fees charged from traders using the exchange and to operate a local crypto asset called BNB. Although this cryptocurrency was created to pay transaction fees on the Binance Exchange, its value and functionality has since gone beyond the platform, strengthening the thriving Binance ecosystem. Practically this means that BNB can be used in-chain, on third-party exchanges, real-world payments, a number of research and development projects, and the recently launched Binance Smart Chain (BSC).
Binance’s vision is to “increase freedom of money” with the development of BNB products that act as a “foundation” to grow the ecosystem.
BNB can be used to pay Binance’s 0.1% transaction fee per transaction, in addition to the withdrawal fee charged when users move cryptocurrencies from the exchange to a private wallet. Binance Coin users receive a discount on transaction fees on the Binance Exchange as an incentive. This incentive; This is because Binance offers some discounts for memberships of up to five years.
BNB can be traded with other cryptocurrencies. BNB tokens can be used to pay transaction fees at the exchange.
Binance is different from other crypto exchanges in that it operates entirely in cryptocurrencies, unlike exchanges that trade in fiat currencies. Founder Changpeng Zhao’s vision for Binance coin was to compete with other exchanges by offering solutions to numerous problems he saw in the cryptocurrency trading infrastructure.
Usage Areas of Binance Coin
Trading Fees: The original use of BNB was to pay discounted trading fees on the Binance blockchain, just as ETH was used to pay fees on the Ethereum Blockchain.
Trading Discounts: Users who initially paid their trading fees with BNB received a 50% discount. This discount is currently set at 25%.
Account Tiers: Users with higher BNB amounts and trading for at least 30 days can access certain “VIP” tiers in the Binance ecosystem, including additional trading fee discounts.
Cryptocurrency Trading: BNB is a tradable token that can be exchanged for Binance DEX and other crypto tokens of market value on third-party exchanges.
Non-Tradable Conversion: Users with non-tradable cryptocurrencies (known as “dust”) in amounts held in Binance accounts can convert these currencies into BNB.
Travel Booking Arrangements: BNB can be used to book hotels and flights on certain websites.
Entertainment: From paying for virtual gifts to buying lottery tickets, to entertainment services, including music and games, BNB serves a variety of purposes in the field of entertainment. Each winning ticket earns its holder a certain amount of BNB tokens.
Credit Card Payments: BNB can be a form of payment on Crypto.com for financial services such as crypto credit card bills, loans and investment products.
Payment Processing: Sellers can offer more flexibility in payment methods by offering BNB as a payment instrument for customers.
Management: BNB holders have management rights over the BNB blockchain based on the amount of BNB they stake.
Binance Smart Chain
Binance Smart Chain (BSC) was launched in September 2020 as a parallel blockchain to the original Binance Chain. BSC is a smart contract platform compatible with Ethereum Virtual Machine (EVM). This means that Ethereum tools, applications, and other infrastructure can be ported and used on the BSC. Binance Chain and BSC can work together as they take advantage of similar architecture. Therefore, transfer of assets between the two chains is possible.
BSC implements a Proof-of-Stake variant called Proof-of-Staked-Authority (PoSA). The PoSA ten BSC consists of 21 validators. This is a deliberate design choice that prioritizes scalability over decentralization. In contrast, other networks such as Bitcoin and Ethereum prioritize decentralization and consist of thousands of active nodes that have an impact on scalability.
Who is the Creator of Binance? Binance’s History
Binance Exchange was launched in 2017 by Changpeng Zhao, who brought a background in high-frequency trading and digital asset exchange markets to the role of CEO.
Binance was founded in China, but the Chinese government’s strict law on cryptocurrency trading