Since the beginning of this year in 2021, you may have heard the name of the virtual currency BNB (Binance Coin) more often.
In this article, we will introduce what is BNB (Binance Coin), which is a popular virtual currency, how to purchase BNB, recommended BNB wallet, what you can do with BNB, and so on.
table of contents:
What is BNB (Binance Coin)?
Binance, a major cryptocurrency exchange, will be known to anyone who has experience trading cryptocurrencies. Binance, one of the most used cryptocurrency exchanges in the world, conducted an ICO in July 2017 to raise funds to operate the exchange.
ICO is an abbreviation of "Initial Coin Offering" and means the release of new virtual currency. The cryptocurrency token issued as part of the ICO is called Binance Coin (BNB) and was sold at a price of $ 0.1 per BNB.
The price of BNB, which was only 0.1 dollars (about 10 yen in Japanese yen) at the start of sales, has risen steadily, reaching the highest price ever as of April 2021, and the price of 1BNB has reached 60,000 yen. It has arrived.
Initially, BNB was an ERC-20 token issued on the Ethereum blockchain, but later moved to its own blockchain, Binance Chain.
There are a total of 200 million BNB tokens, and their allocations are as follows.
- 100 million BNB (50%): ICO investors
- 80 million BNB (40%): Founding team
- 20 million BNB (10%): Angel investor
Interestingly, Binance also has a unique plan to use 20% of the company's profits to buy back BNB tokens and destroy up to 50% of BNB until they are bought back. This process is called "burn" in the cryptocurrency industry, and its purpose is to leave only 100 million tokens in circulation in order to maintain and gradually grow the value of BNB.
Benefits of BNB
Maybe some people are thinking about investing in BNB because of the popularity of BNB these days. Here, let's take a look at the merits of why BNB is attracting so much attention.
BNB is one of the best utility tokens:
BNB is said to be one of the best utility tokens in 2021 today. BNB tokens can be used not only for transactions on Binance exchanges and payment of fees, but also for payment of various services such as cryptocurrency credit card invoices, online purchases, travel, entertainment and remittances.
Adopt your own burn:
As explained above, burn is an essential process to ensure the growth and stability of BNB's value. Binance uses 20% of its profits to get BNB tokens and discards coins to reduce the total supply until 100 million coins remain (or 50% of the total supply). In addition, this deflation method may increase the price over time, which also leads investors to speculate on the price over time.
Has the role of a discount coupon:
One of the big benefits of investing in BNB is that Binance users get a discount when they pay fees on the exchange. Providing this incentive, or reduction in fees, is a clever way to expand the community of supporters and also encourages traders in their day-to-day operations.
The popularity of the Binance Exchange itself is high:
BNB tokens have gained a stable position among the top cryptocurrencies in the coin market cap, thanks to the popularity of the Binance Exchange. Binance is a fast-growing company and one of the largest crypto exchanges in the world. It's no wonder that this BNB token has gained the support of various partners such as major companies.
And despite several security breaches in the past, Binance takes security very seriously. This is one of the factors that further enhances the reliability of Binance Coin and promotes its adoption.
Disadvantages of BNB
This is true for cryptocurrencies, not just any BNB, but keep in mind that investing in a BNB has its advantages as well as its disadvantages. Knowing the disadvantages of BNB is also essential to determine if buying and investing in this cryptocurrency is the right choice for you.
Here, we will introduce the main disadvantages of Binance Coin.
The ever-decreasing discount amount:
Binance offers discounts to traders who trade using BNB on exchanges, but discount rates continue to decline, which can be frustrating for traders. According to the Binance White Paper, the discount rate will be further reduced to 6.75% in the fourth year, which will be realized in 2021.
Regulations could affect BNB holdings and transactions:
Regulations within China, the home of Binance, are just one of the issues that can affect BNB tokens in the long run. Relations with Binance US are also complicated, and previously more than 15% of website traffic came from the United States, which could have a negative impact on US passport holders. Of note here is that Binance has opened a US-only exchange to address its legality issues.
Only available within the Binance Exchange:
BNB relies heavily on the reputation of the Binance Exchange and cannot fly on its own. What's more, some users haven't rated the customer support provided by Binance very well (for example, long delays or lack of phone support).
Binance is one of the main targets of cyber attacks:
Binance is an attractive target for hackers and others who make cyber attacks. In March 2018, an attempted attempt to overwhelm the system and hack it triggered the launch of the Binance Hacker Bounty Program. Binance provided $ 250,000 to hacker informants. However, sadly, another hacker attack occurred in May 2019, resulting in a loss of about 40 million dollars (about 4.3 billion yen).
The management team behind Binance takes security issues seriously, but some investors may be distracted by the potential risks.
Not compatible with smart contracts:
As mentioned earlier, BNB was published on the Ethereum blockchain, but later moved to its own blockchain, Binance Chain. However, this is one of the disadvantages of investing in BNB. Unlike the Ethereum blockchain, the binance chain does not support smart contracts. Smart contracts and decentralized applications bring great potential benefits to businesses and investors.
How to purchase BNB (Binance Coin)
Now that you know what BNB is and its advantages and disadvantages, you may want to buy Binance Coin.
Binance coins can be purchased in a very simple way. Here, we will introduce the purchase method step by step.
Step 1: Open a Binance account
To purchase BNB, you must first open a Binance account. Binance accounts are very easy and quick to open.
For more information on how to register for Binance, see this article:
Step ②: Purchase virtual currency
After successfully opening an account, open the Binance cryptocurrency purchase page . On this page, select the currency you want to pay (eg JPY), enter the purchase price, and select BNB as the currency to buy.
Step ③: Select payment method
Then select Select your preferred payment method. When purchasing with a credit card, please enter the card information.
Step ③: Confirm and purchase
Make sure you have entered all the information correctly and click the " Buy " button. If the final confirmation screen displayed next is correct, proceed to purchase as it is.
You can check the purchased BNB in the cryptocurrency balance on the " Wallet "-> " Fiat and physical " page .
Recommended BNB wallet
Assuming you purchase and own a BNB, the wallet that stores the BNB is important. Binance coins are basically Ethereum network tokens, so many wallets support them.
Here, we will introduce some BNB wallets that can be recommended according to type and application.
BNB hardware wallet: recommended for long-term storage
The safest way to store your BNB is to store it in your hardware wallet. A hardware wallet is a physical device such as a USB that stores the wallet's private key offline. With this method, no one can remotely access your cryptocurrency over the internet as long as the device is in your possession.
The most popular hardware wallet, " Ledger Nano X ", supports not only BNB but also more than 1,100 types of virtual currencies such as Bitcoin, Ethereum, and tether.
In addition, Ledger Nano X can be operated not only from a personal computer but also from a smartphone.
BNB software wallet: A balance between accessibility and safety ◎
Safety: ☆ ★★★★
A software wallet is a wallet that you install and use on your computer or smartphone.
The software wallet we recommend from among many is the " trust wallet ". The trust wallet that supports more than 40 types of virtual currencies including BNB is also an official wallet affiliated with Binance, so there is no doubt that it is one of the best wallets to store BNB.
The baptized design, which is easy to understand and intuitive for beginners, is also one of the reasons why we recommend the Trust Wallet.
BNB Web Wallet: For those who trade frequently
Safety: ☆☆ ★★★
A web wallet is a wallet that is connected to the Internet. Web wallets are always connected to the Internet, so there is a risk of hacking, but the convenience is very high.
If you want to store your BNB in your web wallet, we still recommend using the Binance Exchange wallet.
If you're looking to use BNB to save on binance fees and you don't have a lot of coins in your possession, it may be most cost effective to keep them on the exchange. However, in this case, you need to be careful because you will pass the management right of your coin to Binance.
What you can do with BNB (Usage example)
As mentioned above, BNB can be used to pay transaction fees for trading on Binance, as well as to pay for shopping and some web services.
But do you know that there are other uses for BNB besides the well-known methods mentioned above? For example, BNB can be used to deposit some Bitcoin casinos . This is great for game lovers, isn't it?
The method is very simple, just select the receiving currency in "Deposit with Altcoin" on the deposit page, set the deposit currency to BNB, and you can deposit virtual currency such as Bitcoin using BNB. .. If you are interested in games and online casinos, please give it a try.
As the Binance Exchange grows in popularity, BNB will be valued at the same time. BNB, unlike many other utility tokens, offers real value to Binance users in the form of transaction fee savings.
Even if you don't think the BNB token itself has a bright future, you may find value in the discounts on fees offered by BNB. If Binance really realizes the plan to build a decentralized exchange, BNB will be refocused and its value may increase further in the future.