Like the Binance Exchange, the Binance Coin token is only a year old, but it is already in the top 20 cryptocurrency with the highest capitalization. We describe how the platform ensures the growth of the BNB rate, what future awaits this token and why it can be an excellent choice for a long-term investor.
Today Binance is the world's largest cryptocurrency exchange with a turnover of more than 6 billion dollars per day. Every week, millions of users register on the site.
In addition, Binance Coin is the name of a cryptomonet (BNB), traded and used on the Binance exchange. It appeared about a year ago, during the ICO, became more expensive with the growth of the exchange and today it is in the top 20 cryptocurrency with the highest capitalization.
Binance Benefits
Speed. A typical exchange works as a market maker for buy and sell orders. It is important to note that the platform itself does not buy or sell currency when making an exchange - it finds another user who is ready to buy at the price you requested.
Actually, this is the key function of the exchanger. When a match is found and the transaction is completed, the exchange charges a transaction fee from both sides, and this is the source of its income.
There is a problem here: if your software cannot cope with the flow of orders, there are delays in the execution of applications. With today's popularity of Bitcoin and Altcoins on popular exchanges, this is millions of requests per minute, and delays are critical for business.
So the main know-how of Binance is their “engine” capable of processing 1,4 million transactions per second, one of the fastest in the market. Thus, many cryptoinvestors choose Binance because of the speed of processing orders.
Liquidity. Another important factor is liquidity. Liquidity is the number of assets on the exchange and the frequency of transactions. To quickly find a response offer and execute an order at a competitive price, you need to have a large flow of orders. The exchanger, which has few orders, does not work well. Binance has the most orders, which means it is a safe and competitive exchange platform.
And Binance provides high liquidity, not only for Bitcoin and a couple of leading coins, but for many different assets. As a result, new coins often choose Binance, rather than their competitors - for example, there are many coins from Asia that are not available on Western exchanges. And this is another advantage of Binance and the reason for the rapid growth of the site.
How to use the Binance Exchange
Interface. The Binance team did a great job creating an intuitive interface with graphs, charts and other information necessary to make informed investment decisions. Trading is easy, in order to complete a transaction, you need just a few mouse clicks: choose a currency pair and create an order. There are iOS and Android mobile applications, as well as a website.
Another factor contributing to the rapid growth of Binance is the support of eight languages - English, Chinese, Japanese, Korean, Russian, Spanish, French and German.
Low fees. It is also very important that Binance takes a low commission. The account is replenished free of charge, and for the order charge a standard fee of 0,1% of the amount. Thus, the frequency of transactions is limited because you lose a tenth of a percent on each transaction. (However, Binance allows you to reduce these transaction fees, and a little later we will tell about it.) If you calculate how much Binance receives in the form of commissions, it becomes obvious that this is a profitable business.
Binance also charges for the withdrawal of funds in private wallets. The size of this commission depends on the coin, but it is a fixed amount, not a percentage.
Binance Coin (BNB)
At the same time with the launch of the exchange, the founders held an ICO, releasing the Binance Coin (BNB) coin, an ERC-20 standard token built on the Ethereum platform. The total supply is limited to 200 million BNB, and there will be no more coins.
With the help of Binance Coin, you can pay the exchange commission. You can pay directly in the cryptocurrency you are trading, but as an incentive, Binance offers a discount when paying BNB. In the first year after registering on the stock exchange 50% discount, then it decreases with each subsequent year. By the fifth year of using Binance, the discount disappears completely.
The discount falls, and the value of Binance Coin should also fall with it. To combat this, Binance plans to gradually destroy half of the BNB, with the result that 100 million will remain. Reducing the money supply should compensate for the reduction in discount. The purpose of these actions is the stable price of Binance Coin.
Although Binance Coin was created to pay for the services of the exchange, now it can also be used to invest in certain ICOs participating in the Launchpad Binance program. As soon as the ICO ends, these new tokens will automatically begin to trade on the exchange, so the border between the ICO and the exchanger for the user is erased.
Future Binance Coin
Binance hopes that the token will stimulate customer loyalty. Of course, the discount is a good bait, but, probably, even after the discount is reduced, customers will have a cryptocurrency, and it can be used. Moreover, since Binance is the largest stock exchange in the world, it can be expected that its tokens will spread quite widely, which means that their price will rise.
While Binance Coin is mainly used in the framework of the exchange. This makes BNB unique compared to most tokens, since it already has a practical use - most investors benefit from owning this token.
However, in the future, BNB may begin to grow in value as an asset, and the first investors have already seen this. If this direction is successful, of course, Binance will build around many more different functions and programs that use BNB. For example, the aforementioned Launchpad project is one example of such an initiative, and probably not the last.
Where to buy and store Binance Coin
BNBs can be bought directly at Binance. For any cryptocurrency supported by Binance, a trading pair with BNB is available.
If you need a Binance Coin as an investment, you need to transfer the tokens to your own wallet, and since this is an ERC-20 standard token, you can save them in MyEtherWallet. If you need additional security, you can use the Trezor hardware wallet.
Hack and predictor Aviator
The incredible growth of Binance over the past six months has its reasons: it is a fast, inexpensive and affordable stock exchange around the world. The growth of Binance contributed to the growth of the price of Binance Coin, and judging by the efforts that the exchange makes, this token can be an excellent long-term investment.
Although Binance Coin was created to pay for the services of the exchange, now it can also be used to invest in certain ICOs participating in the Launchpad Binance program. As soon as the ICO ends, these new tokens will automatically begin to trade on the exchange, so the border between the ICO and the exchanger for the user is erased.