What Is Binance Coin (BNB)?

The Binance Coin (BNB) is the native cryptocurrency of the Binance Exchange. This digital coin was designed to allow traders to easily swap their cryptocurrencies through a common cryptocurrency.

When the BNB was introduced, it ran on the Ethereum blockchain as an ERC-20 coin. However, it soon left the Ethereum network when it became the native token of the Binance chain.

The Binance Coin (BNB) started with an Initial Coin Offering (ICO) of 200 million BNB tokens in July 2017. However, Binance gave 20 million tokens to angel investors and 80 million tokens to the founding team. They shared the remaining 100 million in a public auction during the ICO.

During the auction, all 100 million BNB got sold at 15 cents each. Through this process, Binance realized $15 million, where 35% of that was used to upgrade the Binance exchange. 50% of $15 million was used to market Binance and educate new users, while the remaining 15% was reserved for emergencies.

Who Created Binance Coin (BNB)?

The Binance Coin (BNB) was created by the founder of the Binance exchange, Changpeng Zhao, in 2017. Changpeng Zhao is a crypto expert with lots of experience regarding cryptocurrencies. He once worked as the Chief Technology Officer (CTO) of OKCoin before he founded Fusion Systems in 2005.

Binance had its headquarters in China when it first launched. However, it moved to Japan due to its strict cryptocurrency laws. They later left Japan for Malta due to the same reasons.

How Does Binance Coin (BNB) Work?

BNB is just like every other volatile cryptocurrency, with a value that fluctuates due to trades from various individuals. Users can use this cryptocurrency to trade on the Binance exchange or pay for hotel bookings, online shopping, etc.

Although 100 million BNB are supposed to be in circulation, the actual amount is much lower than this. That’s because Binance has always used one-fifth of its quarterly profits to destroy (burn) all BNB in its treasury. Binance declares that they’ll continue doing this until 100 million BNB are destroyed to increase its value.

Is Binance Coin (BNB) a Good Investment?

Binance is a very popular token making it acceptable as a medium of payment in many places. The low transaction fees and high transaction costs make BNB one of the most useful cryptocurrencies. Their unique burn policy allows the value of BNB to increase steadily, maintaining stability in the crypto market.

Individuals wishing to invest in Binance would have to consider the advantages above and the drawbacks as well. One of the drawbacks of BNB is that its value is tied to the Binance exchange. This makes it very hard to increase its value unless the Binance exchange becomes more popular.

BNB has only been around for a few years, making many investors skeptical of its capabilities. Another issue with this cryptocurrency is its online reputation. In May 2021, the Justice Department and Internal Revenue Service investigated Binance. This is believed to be a result of the various regulations and rules that Binance was supposedly breaking.

Other regulatory actions have been taken by the United Kingdom, Japan, Malaysia, and the Netherlands. In Malaysia, the government filed a complaint against Binance for operating as an Unauthorised Virtual Service member. The United Kingdom Financial authority stopped Binance from operating in the UK since it lacked the necessary regulatory licenses.

These are the most apparent disadvantages that Binance suffers. With these, you can agree that Binance faces many issues due to its regulations and rules. Apart from these, Binance is a highly recommendable digital coin, suitable for long-term advancements.