What is Binance Coin? A Definitive Guide for Beginners

Binance, short for Binary Finance, is the largest and most liquid cryptocurrency exchange in the world.

Processing over 1.4 million orders per second, the platform aims to push cryptocurrency exchanges to the mainstream of financial activities.

It is among the crypto exchanges with the lowest transaction fee where users can trade over 500 cryptocurrencies and virtual tokens.

Top traded coins on the Binance Exchange include Litecoin, Dogecoin, Bitcoin, Ether, and its own internal coin, the Binance Coin (BNB).

The Binance Coin (BNB) is used as a utility token to cover trading costs on the Binance Exchange and can also be traded for other Coins. Users who pay in the BNB coin receive discounts on their transaction fees.

The Binance Exchange was launched in 2017 in Hong Kong by Changpeng Zhao, who has a background in finance and technology, and his co-founder, Yi He.

Initially, the exchange ran on the Ethereum blockchain following the ERC-20 standards but has since launched its blockchain, the Binance Chain (BC) and Binance Smart Chain (BSC).

According to recent data from CoinMarketCap, Binance has a market cap of over $78 billion and a daily trading volume of more than $2 billion.

Due to strict regulations in the crypto exchanges business by Chinese authorities, Binance moved its headquarters to Malta, EU.

What’s Binance Coin?

Binance Coin is the native cryptocurrency issued by Binance Exchange. The coin trades with the symbol BNB and is used to trade and pay transaction fees on the Binance exchange.

Following its launch in 2017, the BNB token was an ERC-20 token that ran on the Ethereum network but has since become the internal currency of the Binance blockchain.

As an incentive, users receive discounts on transaction fees when they pay with the BNB coin.

Users can also trade the BNB coin for other cryptocurrencies like Ethereum, Bitcoin, Litecoin, and over 500 others listed on the Binance Exchange.

Today, the Binance coin is valued at about $464 and is ranked as the fourth most valuable blockchain-based token by market cap behind Bitcoin, Ethereum, and USD Tether.

Currently, there is a maximum circulating supply of over 168 million BNB coins.

Binance Coin Initial Offering

The Binance Coin was launched in 2017 with an initial coin offering (ICO) where a strict maximum supply of 200 million BNB tokens was released into the market.

As part of the ICO, tokens were distributed as follows:

  • Founding team: 10%, which is 20 million BNB tokens, went to the founding team
  • Angel investors: 40%, which is 80 million BNB coins, were given to angel investors
  • Public: The remaining 50%, which is 100 million BNB tokens, were issued for public sale to public participants in the ICO process.

The 100 million BNB coins issued for public sale during the ICO were sold for 15 cents per token. Therefore, Binance managed to raise $15 million in Bitcoin and Ethereum from the public through the ICO.

The funds raised were allocated as follows:

  • Upgrades: 35% of the funds went into building and performing necessary upgrades to the Binance exchange ecosystem.
  • Marketing: 50% was used for branding, marketing, and educating investors about the Binance platform.
  • Reserve: The remaining 15% was reserved for emergencies to anticipate unprecedented circumstances.

Binance Coin Uses

Back in 2017, the Binance coin was purposely created as a utility token to offer traders discounted trading fees. But its use cases have expanded considerably beyond the Binance platform.

Today, the Binance coin offers several uses on a wide number of platforms. Here’s a rundown of some of the common uses of the BNB Coin.

  • Cover transaction fees: Users can use Binance tokens to pay discounted transaction fees on the Binance Exchange, including Binance DEX, Binance Chain, and Binance.com.
  • Trading: The Binance coin can be traded for other cryptocurrencies listed on the Binance platform. Users can trade over 500 virtual assets on the platform including Bitcoin, USD Tether, Ethereum, Litecoin, Dogecoin, BNB coins, among others.
  • Credit card payments:  BNB can be used to cover crypto credit card bills on select sites like Cyrpto.com, HTC, and Monetha. Binance coin is also supported by the VISA debit card of Monaco.
  • Investment: Platforms like Moeda allow users to invest in stocks, ETFs, and other securities with the Binance Coin. The Binance’s Launchpad Program also lists certain ICOs that users can invest in using the Binance Coin.
  • Loans and transfers: You can use Binance Coin as collateral to take out a loan on certain platforms like ETHLend. Some platforms and apps allow users to split bills and make payments using the Binance coin.
  • Entertainment: BNB Tokens can be used to purchase lottery tickets, virtual gift cards, card packs, and pay for online services like Canva, Storm, and BitTorrent.
  • Booking travel services: BNB can also be used to book hotels and flights on websites like Trip.io, Travala.com, and TravelbyBit.

Binance Coin Burning

Coin burning is the process of removing tokens out of circulation to slow down inflation and maintain their stability in the market. To achieve that, Binance uses 15%-20% of its profits to repurchase and burn excess BNB coins held in its treasury.

The regular practice of permanently destroying  BNB coins is carried out every quarter to lower their supply and raise their demand. The most recent burn of BNB tokens was on April 15, 2021, where Binance burned more than 1 million Binance coins worth over $595 million.

This was Binance’s 15th quarterly burn and the largest ever in terms of U.S dollars. It helped reduce BNB coins in circulation from 170,532,825 to 169,432,937.

Binance aims to buy back and burn all the 100 million BNB coins that were sold to the public through the 2017 ICO. That will ensure a finite supply of BNB tokens in the market, making it a more scarce and valuable crypto asset.

Binance Coin Wallets

Trust Wallet is the official wallet for storing Binance coins. However, you can use other supported hardware or software wallets to store your BNB tokens securely, including:

  • Enjin Wallet
  • Ledger Wallet
  • Trezor Wallet
  • CoolWallet S
  • Metal Vault
  • Ethos Universal Wallets
  • Atomic Wallet
  • WinQ
  • Gifto
  • Jaxx

Where to Buy BNB coins

You won’t find many cryptocurrency exchanges that list BNB coins in the U.S. Part of the reason is that the BNB coin competes with other exchange’s native tokens.

Thus, your best bet is to purchase BNB coins through the Binance exchange itself. Binance also has the largest variety of BNB trading pairs and offers the best trading rates for the coin.

A few other places to buy BNB coins include:

  • KuCoin
  • FTX
  • eToro
  • Krypto.com

How to buy Binance coin

You can buy Binance coins directly from the Binance Exchange or through any other exchanges that list BNB coins. Follow these steps:

Sign up for an account

Binance follows KYC laws, and you’ll need to create a user account to purchase the BNB coin. So click sign up on your chosen platform and enter your email address to start the registration process. You’ll need to provide personal details like your full name, contact details, SSN, and a valid photo ID.

Deposit funds into your account

Once your account is set up, deposit some money. Most exchanges allow you to add funds through wire transfer, credit card, or ACH transfer. Alternatively, you can deposit cryptocurrency like Ethereum (ETH) or Bitcoin (BTC) from your crypto wallet.


Once you load money into your account, navigate to the markets section and choose the currency pairs you want to buy like BTC/BNB, USD/BNB, or ETH/BNB.

That’s how easy it’s to buy BNB coins.

Is Binance Coin a Good Investment?

If congestion on the Ethereum network continues, crypto-assets like BNB coin stand a chance to continue to capture the market. 

Frustrated developers and investors are likely to continue to seek opportunities on other programmable blockchains like Binance Smart Chain due to its lower transaction fees and high execution speed.

That’s evident with the rise of the BNB price to become the fourth valuable crypto-based asset in the market. The Binance community of users has also grown to make it the largest cryptocurrency exchange in the world by trade volume.

Apart from the discounted fee, BNB holders can also earn up to 10% APY or more depending on how long they want to hold their coins. There’s also something Binance calls launchpad, where investors can connect with developers to invest in newly listed ICO at lower fees.

All these developments are more likely to drive activities on the Binance exchange until Ethereum sorts issues on its congested network.

That said, all cryptocurrencies are highly risky and volatile investments. You should first research the coin you want to buy and only invest what you can afford to lose.

Binance and Regulators

Things haven’t been all smooth for the Binance exchange, though. The crypto exchange seems to have a strained relationship with regulatory authorities in some countries.

For instance,  Americans should only use the U.S site, Binance.US, to trade crypto assets on the Binance exchange. Both the Justice Department and IRS have concerns that the crypto exchange allows U.S. citizens to use their international sites to access derivative products.

Thus, Binance is under investigation by the two regulatory authorities. The outcome of the investigation and its impact on Binance’s performance remains to be seen.

Again, some Binance products are banned in certain countries, limiting their market. For instance, the U.K’s financial watchdog, FCA, banned Binance.com from offering derivatives and crypto assets to customers in Britain.

However, Binance maintains that the ban doesn’t have any effect on service offerings, like trading. German authorities have also had concerns about Binance’s move to offer stock tokens pegged on the value of stocks like Microsoft and Apple.

The company also recently pulled its operations from Ontario, Canada, listing it as a restricted jurisdiction due to regulatory pressures.

However, all these have had little impact on Binance’s performance. So, if you’re going to invest in the BNB coin, keep your eyes on its relationship with regulators, and monitor how Ethereum’s new upgrades unfold.


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