A Beginners Guide: What is Binance Coin (BNB) and how does it work?

Binance Chain is a blockchain network that supports multiple assets and smart contracts, it’s an evolution of Binance Coin (BNB). Binance Chain (BNB) will focus on performance, ease-of-use, and liquidity. Binance Coin (BNB) to become a “world-class blockchain platform” that provides Binance Coin (BNB) users with more opportunities and greater flexibility. Binance Chain is a blockchain that Binance uses to issue tokens, run decentralized applications, and create a new governance method. The main chain of Binance Chain is the transfer and trading of assets, based on the smart contract, users can transfer, deposit, and withdraw digital assets with their private keys.

Binance Chain is the underlying infrastructure of Binance Coin (BNB). It is a high-performance blockchain that is developed to handle trading of digital assets. The native coin of Binance Chain, BNB was initially issued on the Ethereum blockchain as an ERC20 token. However, with the launch of Binance Chain, it has migrated to its own blockchain. The main purpose of migrating to Binance Chain is to improve the trading experience and liquidity for users.

How Does its work?

Specifically, BNB is the name of a utility token used on two blockchains called Binance Chain and Binance Smart Chain (BSC). BC is a blockchain that was built for optimal performance when trading on-chain, which is the only type of trading offered by the Binance DEX. Meanwhile, BSC is another blockchain that runs parallel to BC and offers different features than BC such as smart contract capability.

Uses of Binance Coin (BNB)?

Binance Coin (BNB) offers many uses that go beyond the company’s exchange. For example, it can be used to pay for transactions on the Binance Exchange and users also receive a discount when using it. They can also be the form of payment for crypto credit card bills on Crypto.com, or they can be used to buy travel arrangements on select websites. BNB can even be used to purchase items in entertainment spaces such as virtual gifts, lottery tickets and much more. In addition, various companies offer investments with BNB such as stocks, ETFs and other assets. Lastly, there are apps that allow users to split bills and pay friends and family through Binance Coin (BNB).

Binance Coin BNB Initial Coin Offering

This is how Binance Coin (BNB) was initially distributed:

FOUNDING TEAM: 40% (80 million BNB)

ANGEL INVESTORS: 10% (20 million BBN)

PUBLIC SALE: 50% (100 million BNB)

In 2017, a total of 100 million BNB tokens were distributed to public investors in an ICO. All of these tokens were sold during the ICO at a rate of $0.15 cents per token, raising $15 million in bitcoin and ethereum. Out of this $15 million, 35% was allocated to upgrading their platform and exchange system, 50% went towards branding and marketing, and the remaining 15% was kept as a reserve in case of any emergencies or unprecedented circumstances.

What is BNB burn?

Binance spends some of its revenue each quarter on buying back and “burning” Binance coins (BNB). The process decreases to BNB coin supply, so it can have an effect on the asset’s value. For example, if there are three billion Binance tokens on the market, and Binance burns one billion of them, then in theory the price should rise to account for the decreased supply.

Binance will continue burning BNB coins until it has bought up 100 million coins (or half of their original max supply), which will happen around December 2018.

In addition to doing quarterly burns, they also have a Pioneer Burn Program in which they repay holders who lose BNB coins unrecoverable. And when I say “unrecoverable” I mean unrecoverable because these losses are 100% from negligence or outside factors (i.e., hacks). So when someone loses their private keys and coins, for instance, that’s not considered a case for the Pioneer Burn Program as it was not lost through negligence or outside factors—they just simply misplaced their private key and can’t get it back.

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About The Author

My fascination with cryptocurrency and blockchain technology began in 2013. I also have an entrepreneurial spirit that has led to the creation of CryptoGuideToday, a blog that covers everything related to Blockchain and cryptocurrencies. I am passionate about educating people about cryptocurrencies and providing insight on blockchain technology. I am a strong believer in self-education being the key to success.

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