Binance Coin: The Surprising New Leader in Cryptocurrency
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Chapter 1: Introduction to Binance Coin
Recently, the cryptocurrency landscape has witnessed a new contender rising to the fourth position, and it’s quite an unexpected entrant. This is BNB, or Binance Coin, which boasts a market capitalization nearing $30 billion.
BNB serves as the backbone of the Binance Ecosystem. As the native currency of Binance Chain, it offers various applications: it facilitates transactions on the Chain, covers fees on the Binance Exchange, allows for in-store purchases, and much more. — binance.com
Chapter 1.1: The Origins of Binance Coin
Initially, BNB was created to settle trading fees on Binance. For frequent users of this exchange, BNB presents an appealing payment option due to a 25% discount on transaction costs. Additionally, BNB can be utilized to invest in Initial Exchange Offerings (IEOs), enabling users to support new crypto projects via Binance’s Launchpad.
The token was unveiled in July 2017 through an Initial Coin Offering (ICO), distributing 20 million BNB to early investors, 80 million to project partners, and the remaining 100 million to ICO participants. The capital amassed from the BNB sale was allocated for exchange development, branding, and marketing efforts.
Chapter 1.2: The Rise in Value
In light of BNB’s recent price surges, it has become a target for speculation. As of March 2021, Binance Coin is trading above $250, reflecting a fourfold increase in just a month. This impressive growth has propelled BNB past competitors like Cardano (ADA) and Polkadot (DOT), securing the fourth spot in the cryptocurrency rankings, trailing only Bitcoin, Ethereum, and Tether. This positioning underscores Binance’s substantial influence in the crypto arena, with trading volumes vastly outpacing rivals such as Coinbase, Kraken, or Huobi, excluding the US-based Binance.US.
Chapter 2: Competitive Landscape
Despite its successes, BNB faces stiff competition from established tokens like Polkadot and Cardano.
Section 2.1: Cardano's Potential
Cardano is generating buzz due to its innovative features and scalability. With a focus on energy-efficient and transparent transaction processes through its Proof of Stake (PoS) algorithm, Cardano is positioning itself as a serious contender in the cryptocurrency domain.
Section 2.2: Polkadot's Unique Approach
Polkadot has made its mark by enabling diverse blockchains to connect via its relay chain, demonstrating its unique interoperability. Since its launch in August 2020, the DOT token has gained significant traction in trading venues.
Chapter 3: Evolution of Binance Coin
Though BNB is labeled a "coin," it primarily functions as a utility token offering various benefits. Initially introduced by Binance under founder Changpeng Zhao, BNB was built on the Ethereum ERC-20 standard but has since transitioned to the proprietary Binance Chain. With a total of 200 million BNB tokens, regular token burns have reduced the circulating supply to around 154 million.
Binance is expanding BNB's utility beyond trading fee discounts. The coin can now be used for travel expenses (e.g., hotel and flight bookings), online shopping, and even purchasing virtual gifts. Various online retailers and applications, such as Trip.io and Crypto.com, have begun to accept BNB as a payment option.
Chapter 4: The Binance Boom
The current surge in Binance’s popularity can be attributed to the Binance Smart Chain (BSC). This platform provides developers an alternative to Ethereum for creating decentralized applications (dApps) and executing smart contracts. A growing number of wallet providers and development tools are turning to BSC, enhancing its appeal.
Section 4.1: Understanding Smart Contracts
Smart contracts are automated agreements triggered by specific conditions. They facilitate the exchange of cryptocurrencies or digital assets, ensuring that once conditions are met, transactions proceed without human intervention. Essentially, they are coded agreements that execute particular actions based on predetermined criteria. — binance.com
Chapter 5: Conclusion
Originally, Binance Coin was intended solely as a utility within the Binance ecosystem. However, its adaptability and robust technological framework have led to significant increases in its value, transforming it into a trading asset. BNB remains integral to the Binance platform, ensuring a seamless experience for its users.
As the cryptocurrency market evolves, so too does the landscape with other exchanges introducing their own tokens. For example, platforms like Crypto.com have introduced their own currencies, inviting further exploration into the crypto realm.
The first video discusses the staggering loss of $1.4 billion experienced by the founder of Binance in a single day and speculates on the future trajectory of BNB Coin.
The second video examines the new Binance Launchpool and the introduction of the Notcoin (NOT), detailing how to stake BNB and FDUSD to farm NOT.