All About Binance coin: Is It Really a Good Investment?

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In early 2021, Binance coin broke into the top 3 cryptocurrencies, becoming one of the most popular and discussed crypto assets. In the past 10 months, the coin has seen a 1700% growth rate, which is an impressive result. Many crypto enthusiasts and potential investors are wondering – has BNB already reached the limit, and is it worth buying at the end of 2021? To predict the future of this coin, we need to understand what exactly this coin is.

Binance coin (BNB) is a currency created by the developers of one of the largest cryptocurrency exchanges in the world – Binance. The main purpose of this cryptocurrency is the development of a platform of the same name and the use of BNB within it as a financial asset.

How Binance Coin appeared

Binance launched its ICO in July 2017. In just 3 minutes, the developers managed to raise the required amount – $15,000,000. After which the ICO has been deemed a success.

A total of 200,000,000 BNB tokens were issued. Of these, exactly half hit the market through the sale at the ICO. 40% of the remainder were reserved for the needs of the Binance team. The remaining 10% were received by the first investors.

Economical characteristics of Binance Coin

As of the end of October 2021, there are about 166,801,148 coins in circulation. This is caused by the fact that once a quarter there is a regular “burning”, i.e. irrevocable withdrawal of coins from circulation (more details – below). This is done to increase the value of the currency and interest from investors.

The rate of BNB at the time of writing, that is, in November 2021, is about $600. And this although a year ago the value of the coin was only $30! The total capitalization of Binance coin is about $2,307,640,000, which is the third-highest among all cryptocurrencies in the world. And the trading volume is almost $2,308,000,000 per day.

Buying and storing Binance coin

The process of buying a digital BNB token is similar to that of other cryptocurrencies.

The easiest way is to buy the token on a specialized cryptocurrency exchange. At the moment, the currency BNB is presented on exchanges CoinBene, Bilaxy, HitBTC and others. A complete list of exchanges where BNB digital currency is traded can be found on Coinmarketcap.

You can also buy Binance coin tokens through popular specialized cryptocurrency exchanges.

To store BNB tokens, the developers of Binance recommend using the Trust Wallet. It is a multi-currency wallet that supports more than 40 popular coins. The wallet was launched in November 2017. And in July 2018, the project was bought by the owners of the Binance exchange and now the wallet is part of the ecosystem of the Binance platform and its official wallet for storage. You can download it from the official site for Android and iOS.

If you need a wallet for another device, then you can choose one from the list of supported Binance coin cryptocurrency wallets. The list of all wallets with the possibility of storing BNB tokens is available on the website of Binance exchange, in the appropriate section.

Relatively recently, there is an online wallet BNB, which you can use directly in your browser, without installing it to your device. This wallet works in BEP20 (Binance Smart Chain), which is the newest and most advanced blockchain of Binance coin. 

You can also store Binance Coin tokens on the Binance platform itself, using them to pay fees for exchange services, participate in IEO, sign up for a savings account and more.

Binance Chain

Initially, the Binance coin network did not have its own blockchain and worked on the Ethereum cryptocurrency blockchain, but in April 2019 it successfully switched to a blockchain of its own design called Binance Chain.

As project CEO Changpeng Zhao noted, Binance Chain is a network with a minimal set of available features, the main advantages of which are almost instant transactions, low fees, fast block generation that takes less than 1 second, and the network’s ability to withstand high loads.

Another advantage of the Binance Chain blockchain is the ability to create tokens of other projects with subsequent full access to them.

Difference from Bitcoin and other cryptocurrencies

The main difference between Binance coin and other cryptocurrencies is that it is a token that provides the ecosystem of a major exchange, which in turn provides a wide range of opportunities for its use. For example, using BNB tokens when trading on the Binance exchange, you can pay the commission for buying and selling cryptocurrencies, thereby getting a discount on the amount of commission.

You can also pay transfer and withdrawal fees, you can participate in IEO (on Binance you can only participate in IEO with BNB), buy digital currencies available for trading on the exchange, store tokens and get extra dividends, borrow cryptocurrency and leave BNB tokens as collateral, and even possibly make donations to a charity fund.

As you can see, the token has a very wide application and is an integral part of the infrastructure of the Binance exchange, which shows its high demand among the users of the platform and provides great potential for further development and distribution.

Advantages of Binance Coin

Good Prospects

BNB is growing at a dizzying pace in 2021 and this is most likely not the limit. There are many reasons for that, which we will talk about below. For now, let’s make a few points:

  • The project has great potential for development.
  • The Binance coin token is an important part of the infrastructure of the Binance platform, which is the flagship of the cryptocurrency industry. This platform throughout 2018, 2019 and at the beginning of 2020 is firmly in first place in terms of trading volume among all cryptocurrency exchanges in the world.
  • There is also a constant addition of new services, introduction of advanced technologies, expansion of available functions and features, which gives confidence in the demand for Binance coin token in the future.

The ability to use the services of the Binance platform

Using BNB token on the Binance cryptocurrency exchange allows you to save on commissions when buying and selling cryptocurrencies, participate in IEO, receive additional dividends for keeping coins on the exchange, and borrow cryptocurrency. All of this provides opportunities for savings and additional earnings for BNB cryptocurrency owners.

Application of Binance coin:

  • Paying a commission for trading transactions. In this case, traders receive a discount when paying the commission with BNB tokens.
  • Payment of withdrawal fees from the exchange.
  • Paying for new coin listings.
  • Buying other digital currencies on the Binance platform.
  • Participation in IEO.
  • Subscribing to a savings account and receiving dividends for it.

Disadvantages of Binance Coin

BNB usage is limited to one platform

BNB token is used only within the Binance platform and has no other use outside of that platform. At other exchanges where the token is traded, you can only buy and sell it, store it in your account, and transfer it somewhere to another wallet – that’s where the possibilities end.

For example, Ethereum was once the first cryptocurrency to support smart contracts, which made ICOs possible at all. With other cryptocurrencies – the same story, all of them are created with some unique features that are important for the crypto community as well as beyond.

BNB cryptocurrency outside of the Binance platform completely loses its uniqueness. This means that the fate of this coin completely depends on the success of the Binance platform and the decisions made by its owners.

A large number of tokens in the wallets of developers

During the ICO process, Binance developers kept 40% of the total number of all BNB tokens. This fact gives a potential opportunity to make various manipulations of the price of the currency in the interests of the company.

What causes the growth of BNB

The number of new users of the Binance platform has been growing steadily since its launch. One of the reasons is that the owners of the platform attach great importance to advertising and promotion of their brand, on which a significant part of the exchange’s revenues is spent.

Since there are discounts when paying commissions for trading BNB currency, many traders prefer to buy Binance coin for these purposes and pay the commission, which against the background of the ever-increasing number of users and trading volumes has a positive effect on the demand and price of the token.

Also, the Binance platform is actively developing. New services constantly appear on it, from rather traditional cryptocurrency exchanges, such as margin trading or cryptocurrency futures trading, to unique ones. Of the latest, we can highlight the service to launch their own cryptocurrency trading platforms Binance Cloud and Binance Launchpad – a platform for IEO.

In addition, the developers have big plans for the future: they plan to launch Open Platform – a global decentralized infrastructure for the entire cryptocurrency industry.

The emergence of new services leads to increased interest in the platform from the cryptocurrency community and an influx of new users to the exchange.

Another factor that has a positive impact on the price of a token is the regular “burning” of coins. Each quarter, the owners of the Binance project spend 20% of their profits to redeem and further irrevocably remove these tokens from circulation.

This will occur until there are 100,000,000,000 of the original 200,000,000,000 left in circulation in the market. This fact contributes to the shortage of supply in the market with a high demand for the token and this situation also speaks in favor of the long-term growth of the price of Binance coin.

BNB Mining

The software algorithm of this coin does not provide the possibility to mine it. At the moment, the only available way to get Binance Coin is to buy it on the crypto exchange or through specialized exchangers.

How to earn and multiply Binance Coin?

Trading on a cryptocurrency exchange. This option is quite risky and rather suitable for people who already have experience in trading. If you have little experience and you don’t know where to start trading, we advise you to read educational articles in the School of Investment and Trading section of our website.

Use the LaunchPad service on the Binance exchange, which gives you an opportunity to invest at the IEO stage in various projects selected by a special Binance team. Available projects for investment can be found in the appropriate section of LaunchPad on the Binance exchange.

Use the service Binance Saving, where you can receive interest on funds subscribed to a savings account. Two options are available: open-ended savings and savings with a fixed period of time.

That being said, is it worth investing in BNB?

BNB is one of the most popular and successful cryptocurrencies worldwide. The coin has shown continuous growth over time, and many financial experts believe it will continue in the coming years. At the moment, the prospects of Binance coin look positive. It is possible that gradually BNB will occupy the niche of Ethereum, due to the constantly growing cost of transactions in the network of the latter. 

The fact that Binance coin is based on the largest cryptocurrency exchange in the world indicates the high stability of the coin. However, it should be taken into account that the extremely centralized nature of BNB makes its fate dependent on the decisions made by a single organization.

As for the specific prospects of the coin in the near future, according to experts, a rollback in the value of BNB after the rapid growth is not excluded. Then the growth will resume, but not at the same pace as at the beginning of this year. In the medium term token cryptocurrency exchange Binance may rise in price to $ 1 thousand.

So, most likely, BNB will be a good asset for long-term investors. On the other hand, due to its high market volatility, short-term investors can lose their investments.

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