The world of cryptocurrency can be a confusing one, with over 800 currencies in existence (not just Bitcoin). Various currencies are increasing in popularity, such as Binance (BNB). This is mainly due to its dedication as a trading platform for other cryptocurrencies.
What is Binance?
Binance is a cryptocurrency trading platform, while Binance coin is the currency of the platform. The name ‘Binance’ is a combination of binary and finance. This is also because it is not possible to trade fiat currencies against cryptocurrencies.
The platform has significant success globally, all within a short time. Its headquarters are in China. It uses the ERC 20 standard from Ethereum, which means that it works very well for Ethereum users.
The workings of the platform and coin are still unknown largely, since the currency is still new. However, you can only trade cryptocurrency pairs on the platform.
Why is Binance different?
The blockchain technology of Ethereum acts as a basis of improving Binance. Since it is among the vital Ethereum components, it seeks to improve user experience in providing a cheaper alternative for trading different currencies, all to the benefit of investors.
Alternative coins to use
Binance has the potential for increasing popularity with time. However, other coins provide viable alternatives, and we have put a list of some of them.
Lisk – founded in 2016, it aims to simplify development of blockchain technology, therefore allowing for faster transactions.
Bitcoin/XBT – the most famous cryptocurrency, from 2009. It is similar to Binance.IN because of blockchain application system.
Ripple/XRP – based on open-source internet protocol currency, and formed in 2012.
Cardano – thought to be an open-source digital currency, and constantly evolves itself from research and scientific philosophies.
Ethereum/ETH – this is a 2015 decentralized software platform allowing smart contracts to operate without interference from third parties.
NEM – this is another blockchain currency from 2015, and utilizes Java script in its coding.
How Binance works
As stated above, you can only trade cryptocurrency pairs on the Binance platform. The most common currencies are Ethereum, Bitcoin and Bitcoin cash, though the platform is also useful for other currencies such as NEO Coin, QTUM coin and other currencies – new ones receive approval to trade on the site on a daily basis.
Most of the currencies you will get are from Asia. It is unique that many of them are on one platform, and this may be due to the developer headquarters location in China. Another unique aspect is the recent ‘community coin per month’, where users of the platform get an opportunity to decide the coin they want to trade that month without transaction fees.
Binance prices and trading history
Since the platform is recent, it does not have an extensive history – but so far, the indications have been positive in terms of its value and the security it gives its users.
Binance coin has an interesting distribution standard:
ICO handles 50% of the coins (purchases by investors)
40% of the tokens goes to the developers
10% goes to Angel investors (these are investors who purchase large amounts of coins at once).
You can use the coin to pay fees at Binance exchanges, and these include transaction fees, trading fees, listing fees, and so on. When you use BNB to pay these fees, Binance gives you a large discount, compared to when you pay them in BTC.
Another thing to note is the fees charges. In your first year, you get 50% discounts on all fees you incur, in the second year, you receive 25%, the third year gets 12.5%, and the fourth year 6.75%, with no discount after the fifth year. This benefit is useful as an incentive to users to purchase BNB tokens and transact using them instead of other currencies.
Two benefits to using BNB coins:
The trading fees on the platform are in BNB, so it is easier for you to handle than using other currencies and trying to convert them (keep in mind that Binance does not trade in decimals).
You get to pay half of the trading fee.
In case there are some BNB tokens you will not use, you can always sell them off. Note that transactions cost 0.1% of the trading amount.
Is it worth trading in it?
This answer to this question is complicated, since even experts generally see investing in cryptocurrency as a risky venture with low returns.
The success of investment will however, depend on the uptake by individuals and businesses. This platform offers you a wide range of services, so we consider it a wise investment to make, provided you conduct your research properly.
Binance gives its users (particularly Ethereum users) a good choice, though not much information is available on its workings. The platform trades only with currency pairs, and it allows you to trade currencies on an independent level.