Binance Coin (BNB) Review 2018: What Is Binance Coin? | VKOOL

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Binance is not just one of the most popular marketplaces for trading in cryptocurrency. It also has its own “token,” called Binance Coin, whose value has gone up as the service has become more and more popular. Now that Binance has taken the industry by storm, now is the perfect time to familiarize yourself with Binance Coin, what it is, how it works, and how it's tied in with the future of this swiftly-growing marketplace that's become the number-one way for people to get the most out of their cryptocurrency experience.

First, What Is Binance?

Binance is the largest and most popular cryptocurrency trading marketplace in the world. And they're not even that old, either. They launched in mid-2017, and in a matter of months they went from just another exchange to the premier marketplace, where $6 billion in various assets is now traded every single day. In fact, so many people have been rushing to sign up for the service that they had to put a temporary hold on new membership applications. Since they removed the hold, however, the tally has risen to the millions.

How Does the Binance Exchange Work?

An exchange is a place where people do just that – they exchange, usually currency for assets of some kind (including other currencies). An exchange works by matching people up: if one person wants to sell at a certain price, the service matches them up with someone else who wants to buy it at that price. Then if the trade goes through, each party gets what they want, and the exchange service charges a fee to both parties as a part of the price of using their system. In this way, the exchange makes their living.
The problem in many cases is that exchanges can't always keep up with the amount of transactions people want to do, leading to delays due to software and network slowdown. The result? Some people can miss out on buying at the price they want.
Binance has addressed this by creating a powerful and innovating matching engine that can perform 1.4 million trades per second. That's incredibly fast, and is one reason why people have been making the move to Binance, since their software offers a speed that most others can't.

They also outdo others by offering liquidity. Liquidity basically means the rate at which different assets move. A busy “orderbook,” as it's called, is more attractive, and therefore is more desirable for investing. Binance has an extremely busy orderbook (the busiest worldwide, in fact), so it's one of the safest and most competitive place to invest.

Another benefit of using Binance is that it has a very low fee: 0.1% per transaction. Not only that, they offer reduced fees the more transactions you perform, but only if you use their own proprietary token, Binance Coin.

What Is Binance Coin?

Binance Coin is not necessarily a currency, in the sense that Bitcoin or the euro are. Binance Coin is more of an arcade token, something which can only be used within the Binance network, but which already has a very important use that makes it very valuable.

The Binance Coin is an electronic asset that follows a set of standards called the ERC-20, a system that grew out of the Ethereum blockchain. That means there are rules and codes that it follows that have been determined by the larger community to lead to it being stable and safe to use. It has the same built-in ledger that other blockchain applications have, meaning you don't have to worry about it being exploited and copied or pirated.

So what good is Binance Coin, if it's not a currency as such? Well, we mentioned earlier that Binance charges a fee per transaction which, while low, are still fees. Don't want to pay the fee using the currency you're trading in? Just use the Binance Coin to pay the fee.

That's right, you can use these tokens to pay the trading fees, much like you use arcade tokens to play an arcade game. While they have no value outside the arcade, they can be mighty useful within the arcade.

Here's where Binance Coin becomes a smart investment: Binance offers a rebate for people who use Binance Coin to pay their fees for the first few years. In the first year, when you use Binance Coins to pay your transaction fees, you get a 50% discount. That discount goes down by half each year, until the fifth year, when no discount applies. But that's still five years of rebates, which could save you some serious money.
What happens after that? If the value keeps going down, won't the token be worthless? Well they've already considered that, and as a result of the lowering value, Binance will be cutting the amount of total Binance Coins in circulation by half, keeping the price and value stable.

Where Do I Store Binance Coin?

You store Binance Coin the same way you would store any other currency: in a wallet. After purchasing the coins from Binance (or through EtherDelta), you can move it off of the exchange and into MyEtherWallet, a software wallet that works especially with tokens and Ethereum.

The Future of Binance Coin

Right now Binance Coin is, like we said, more of an arcade token than a true currency. Unless you're using it to pay for trading fees, there's not much you can get out of it. Yet.

Binance is planning on broadening the scope of what Binance Coin can do, especially as its value goes up with the increasing numbers of people who will be wanting to use it as they sign up for Binance.

Right now, users can use Binance Coin to invest in ICOs (early investing periods for new cryptocurrencies) that Binance incubates and hosts on their service, meaning there's already a way to make some sort of return on investing.
Binance is growing, which means the number of things you'll be able to do with Binance Coin will only increase. As a commodity, you can already get something out of it by buying in, waiting for it to increase in value, and then sell it off – something people are already doing.

Binance Coin vs KuCoin

These assets are pretty similar to each other. Binance Coin is an in-house token used to pay for fees on Binance, and KuCoin (more specifically KuCoin Shares) is a token to pay fees on KuCoin, a Chinese cryptocurrency exchange service. There's a bit of a difference in how each one can be used, however. While Binance Coin's advantage is primarily in how it can get users a rebate on trading fees, KuCoin goes a step further – not only does it give users discounts in trading fees, but owning KuCoins entitles the owner to a portion of the 50% of all trading fees that get redistributed to owners of KuCoin.

Binance Coin vs KuCoin

These are very different coins, even if their names are quite similar. Binance Coin is a token that can be used to pay transaction fees on the Binance platform, but it doesn't have much use outside of that at the moment. Bitcoin, on the other hand, is a cryptocurrency that has value and can be used to pay for goods and services. Both are based on blockchain tehcnology, and both can be stored in wallets (although Binance Coin should be stored in Ethereum-compatible wallets).

Frequently Asked Questions

  1. Where is the Binance Coin exchange?
    The primary exchange to get Binance Coin is Binance itself. You can also buy it on the more ether-oriented exchange EtherDelta.
  2. Can I get information about Binance Coin on Reddit?
    Yes, there is an active community of cryptocurrency enthusiasts and there are several subreddits where users are actively discussing Binance and Binance Coin.
  3. What is the price of Binance Coin?
    If you would like to know the price of a cryptocurrency or token, it's better to check out the exchanges, since the prices can fluctuate.
  4. Can I buy Binance Coin?
    Yes, you can buy Binance Coin outright at the Binance website or at EtherDelta.
  5. What is Binance Coin?
    In short, it's a token that can be used to pay for transaction fees for trades placed on the Binance exchange service.
  6. Is there  a prediction for the price of the BNB (Binance) Coin?
    There's no sure way to predict how a currency or token is going to perform. You may have to monitor the markets and trends closely.
  7. What about BNB Coin?
    That's just the shorthand form of “Binance Coin.”
  8. Why do they call it a “Binance Coin”?
    It's a casual way of referring to the “Binance ERC-20-compliant token,” which is more clumsy.
  9. Where can I see the latest news for Binance Coin?
    You can check out updates for Binance Coin and how it's doing by keeping tabs on cryptocurrency marketplaces and current events.
  10. Will there be a Binance Coin Burn?
    As far as we know, there will only be a coin burn (“destruction” of a certain amount of coins to reduce supply) after a couple years, as Binance Coin's value becomes threatened by the lessened amount of rebates users can get by using it for their fees.
  11. Can I vote for Binance Coin?
    Since Binance Coin isn't much of a currency yet, there likely isn't much of a reason to vote for it in any exchange-driven popularity contests.

Conclusion

The fates of Binance Coin and Binance are intimately intertwined. As Binance grows in popularity and use, so will Binance Coin's value and usage. Even though Binance plans to phase out parts of their rebate program, they still plan to keep the price competitive and the Binance Coin valuable by reducing the stock of it. Not only that, but the coin could also see its uses extend beyond merely paying for transaction fees, something which will also improve its value and lengthen its life even further.

But it all hinges on Binance. Outside of the service, the coin has almost no use, but if Binance can manage to keep its upward trajectory and remain competitive, robust, and faster than all its competition, there's a chance that Binance Coin will be around for a long time.

Peter Lehmann

Peter is a blockchain investor and cryptocurrency writer at Vkool.com. Since 2014 Peter has advised blockchain startups and ICOs on content marketing, strategy and business development.

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