In 2022, the place of the second cryptocurrency no longer looks as unshakable as before, since direct competitors of Ethereum - Cardano and Polkadot - have become more active. But who really surprised and showed phenomenal growth in recent months is BNB, the token of the largest cryptocurrency exchange Binance. BNB has already reached third place in terms of capitalization among all cryptocurrencies, and given the development of the situation, it seems that this is not the limit.
Just since the beginning of 2022, the price of BNB has increased by more than 700%, and has gained more than 2,300% in a year. Such a rapid growth in the BNB rate is primarily due to the expansion of practical use of the token in the Binance ecosystems - DeFi and CeFi.
Of course, a significant contribution to the growth of BNB quotes was made by the general bullish trend in the crypto market and a significant increase in the popularity of the crypto exchange among users, and as a result, additional registrations, trading volumes and the use of BNB by traders for discounts on commissions and staking.
Description
The Binance blockchain that runs BNB uses a consensus mechanism, Tendermint BFT. This is a simplified version of the protocol called Byzantine Fault Tolerance. The security of the blockchain is guaranteed as long as the number of validators working correctly exceeds ⅔.
Important: Using such a consensus mechanism means that you cannot mine tokens using the principle used in Bitcoin mining.
The blockchain on which BNB operates has a high transaction speed. This is achieved through a minimal set of functions. The developers even sacrificed the ability to support smart contracts. At the same time, the deployment of third-party blockchain projects is allowed on the base chain.
Binance Coin has around 200 use cases in 2022. For example, tokens are used to perform the following operations:
- Payment of trading commissions for the purchase of cryptocurrency on the Binance and Binance DEX exchanges. This is more profitable than paying a commission with the coins that the user trades, because the exchange gives a discount. But its size is halved every year and soon this privilege will be abolished.
- Payment for transactions made on Binance Chain and Binance Smart Chain.
- Purchase goods and pay for services using Binance Card or Binance Pay.
- Purchases and reservations on sites that accept cryptocurrency (for example, Travala.com, Axie Infinity, etc.).
- Staking in Binance Liquid Swap.
- Lending and trading, for example on the Nexo or Bitcoin Suisse platforms.
Having this cryptocurrency in a person’s account gives him the right to participate in token sales on Binance Launchpad. In addition, on the Binance exchange itself you can buy almost any other coins for these coins.
Binance is constantly burning its coins. This is done to protect against inflation and to increase the exchange rate. A new batch of tokens is destroyed once every quarter. Its size depends on the number of transactions made on the exchange during this period of time. Usually this is about 20% of the profit received from commissions. It is planned to continue the procedure until only 100 million coins remain.
Where to store Binance Coin
The Binance coin developers have not yet resolved the issue of creating a branded wallet for cryptocurrency, but since the ERC20 standard is quite popular, we can use the following as the main wallets:
- MyEtherWallet;
- Mist;
- MetaMask;
- Mobile ImToken;
- Hardware wallets.
Please note: for most wallets, BNB is not added automatically, so before working with it (sending funds to the exchange or withdrawing), the token is added manually./div>
This needs to be done, because when studying investor reviews after withdrawing funds from sites, you may encounter indignation that the money was lost. In fact, they have arrived, but the user simply does not see them automatically.
ERC20 standard
This is not to say that this is surprising, but the BNB developers have relied on working with the popular Ethereum algorithm, which will allow the network to be expanded in the future and work with smart contracts. As in the case of Bitcoin Binance, the coin has a strict emission, which is quite important for success when introducing a currency to the market, the size of which is 200 million.
And the officials themselves, representing the Hong Kong company, have already clarified that although the standard provides for an increase in emission, this will never happen with the BNB coin. On the contrary, over time, most of the binance coin will be destroyed, but smoothly and gradually. According to the developers, 20% of the profits are regularly spent to systematically buy back 50% of all tokens that are already stored in the hands of investors, and this will continue until the total emission in circulation reaches 100 million. So such investments on the Internet today are more popular than ever, while the coin is just being promoted and offers a good rate for work.
History of the creation of BNB tokens
The founder of the Binance exchange and the creator of BNB was Changpeng Zhao. This is a programmer from China. He is known for his work with Bloomberg and the Tokyo Stock Exchange. Zhao became interested in investing in cryptocurrency in 2014.
Other developers also participated in the project:
- Roger Wang;
- James Hofbauer;
- Paul Yankunas;
- Allan Yang;
- Sunny Lee.
Tokens were offered through an ICO, but their purchase does not constitute an investment in the Binance exchange. Initially, 200 million BNB were issued, which ran on the ERC-20 protocol. In 2022, it was replaced by BNB BEP-2. In 2022, another variety appeared - BNB BEP-20.
At the time of issue, only 50% of the coins were distributed among ordinary users, another 10% were received by venture investors. The exchange has 40% of the coins left. Of this share, 15% was reserved, and the rest was used for the development and promotion of the site.
BNB became the first utility token of a cryptocurrency exchange. Subsequently, Binance’s experience in issuing its own coins was repeated by other platforms, for example KuCoin.
Technical analysis
Recently, despite the unstable state of Bitcoin, we can observe a clear upward trend. BNB is one of the few cryptocurrencies that should be in your portfolio for 2022. Recently, Forbes has been devoting more and more time to the platform, which affects its rate.
When making an investment decision, it is worth considering that this analysis has an expiration date, and it will no longer be relevant after 2-3 days.
BNB chart
Difference from other cryptocurrencies
A comparison of the key parameters of BNB and other popular cryptocurrencies, such as xrp, bitcoin, etherium, is given in the table.
| Option/Coin | BNB cryptocurrency | XRP cryptocurrency | Bitcoin | Ethereum |
| Mining Possibility | No | No | Yes | Yes |
| Limit number of coins | 200 million (all already released) | 100 billion (all already issued) | 21 million (creation ongoing) | Not limited |
| Number of coins in circulation | 154.5 million (constantly decreasing) | 46.42 billion (growing) | 18.5 million (growing) | 116 million (growing) |
| Number of possible transactions per second | 1.5 million | 1500 | 7 | 15 |
| Interactions with world banks | Yes | Yes | No | No |
The table shows that the key difference between BNB is the speed of transactions. No leading coin can compare with it in this parameter.
Not everyone has access
By using the gift of hindsight, it is easy to see the winners. Those who were able to get their hands on any of the 13.3 million shares of CureVac for $16 looked like bandits. On the first day, investors saw a return of 249.4%. Not too shabby!
But here’s what’s interesting: not everyone immediately got access to it. During a typical IPO, individual investors may not receive shares immediately. In most cases, the IPO underwriter can allocate shares at his or her discretion. The first round of stock trading at the lowest price often goes to the underwriter's clients and other large investors.
In this respect, cryptocurrencies are similar to stocks. You cannot take any coin from any exchange. And in some cases, this is where the BNB cryptocurrency comes into play.
If you want to trade cash for cryptocurrency, of course, you can open your Robinhood account and choose from the seven tradable coins. Trading platform eToro has added cryptocurrency trading to its list of services in 2022. But right now it only offers access to 15 coins. PayPal also allows its customers to participate in cryptocurrency transactions. But it only gives access to four major coins. There are actually some other problematic aspects of PayPal's cryptocurrency feature, but let's leave that for now.
Advantages and disadvantages of BNB cryptocurrency
BNB tokens and the Binance ecosystem offer the following benefits:
- high level of protection against hacker attacks and transaction security;
- low commissions (0.1% of the amount);
- stable operation even under critical system loads;
- versatility – you can sell and buy BNB for many cryptocurrencies;
- demand for coins outside the Binance ecosystem;
- maximum transaction speed compared to other blockchains;
- protection against inflation.
Coin is interesting because it is backed by a leading business project on the cryptocurrency market. At the same time, the coin already has a wide range of applications not related to the Binance exchange itself. This provides a kind of risk diversification when investing in these tokens.
BNB has one well-recognized drawback. This is a lack of decentralization. Because of this, the cryptocurrency is considered potentially vulnerable. Over the years of its existence, Binance has been subject to many hacker attacks. And although it is considered quite stable, this does not guarantee complete safety in the future.
Important: Also, the disadvantages include the prospect of influencing the quotes of world regulators. Given the close connection between the price of the BNB cryptocurrency and the success of Binance, the claims against this exchange raised by the US Internal Revenue Service raise concerns. They accused the platform of money laundering.
BNB on Binance Chain and Binance Smart Chain
Binance Smart Chain (BSC) is a blockchain designed to work with dApps (decentralized applications). It works in parallel with the main Binance Chain blockchain and is completely autonomous. More information about them is given in the figure below.
The main advantage is the ability to transfer projects already running in the Ethereum system to it. When launching a contract, either one that already existed on another network or a new one, as well as when performing cross-chain operations, you need to pay a commission in BNB. These coins work on BSC in the same way as ETH on the Ethereum blockchain.
The project team
Binance founder Changpeng Zhao
BNB Coin was developed by a group of Chinese programmers who later merged into Beiji Technology. The creator and leader of the project is Changpeng Zhao. Even before the launch of Binance Coin and his own exchange, this person had experience in the field of blockchain technologies.
Thus, he led the development team in the famous Blockchain.com project. In addition, he was a co-founder of other crypto projects (OKCoin and BijieTech).
Above all, Changpeng Zhao is a well-known and respected figure in the crypto community. He leads an active “life” on social networks, where he discusses with members of the Binance community the future of his projects and the prospects for the development of the cryptosphere as a whole.
You can watch an interesting video on our channel about the founder of Binance Coin:
Who is Changpeng Zhao
How to make money on BNB cryptocurrency and store it
BNB cannot be mined. These tokens can only be purchased on Binance itself and on several other exchanges, including:
- EtherDelta;
- Gate.io;
- Trade Satoshi;
- ShapeShift and others
You can purchase Binance Coin for any of 46 fiat currencies, paying by credit card or transfer. Network validators who check blocks can earn coins through transaction processing fees. There is a chance to get coins for free - on faucet sites, as well as during promotions held by the Binance exchange.
You can earn money by owning the BNB cryptocurrency in two ways – through rate growth and through staking.
It is recommended to store these coins in an account on Binance or in a Trust Wallet wallet that has official support from the exchange. You can also use the Ledger hardware safe or multi-currency services:
- Guarda;
- Atomic Wallet;
- Coinomi et al.
Competitions
The Binance exchange regularly hosts trading competitions and activities, and many of them offer rewards in BNB. For example, the distribution of prizes for the Binance Pool referral program has recently ended, where you could win from 5 to 50 BNB if you invite new users who provide hashrate to the pool.
And for Christmas, the exchange gave away $1,500 in BNB between participants in some holiday activities.
Track new Binance competitions on the official blog, social networks or on our website. Some of them have quite flexible terms of participation and are suitable for a wide range of users.
BNB Price Outlook
At the time of writing (August 2022), the price of the BNB cryptocurrency reached $430, and the capitalization exceeded $72.2 billion. This gives the coin the fourth place among all existing ones. The peak of quotations occurred in April 2022. The historical maximum rate is $676 per coin.
Although the BNB token can be used to pay for goods, its rate primarily depends on the demand for Binance services. You can see how quotes have changed over the past year in the chart below.
The main factors for the growth of the coin in the future will be the pace of implementation of new Binance services, the demand for this exchange in the community and the bullish cryptocurrency market in general.
Important: Due to the speed of transactions and low commissions in the system, BNB tokens are considered even more promising than Ethereum.
In their reviews, experts predict an increase in quotes of 25% by the beginning of 2022 and by 380% by 2023. But one cannot completely rely on such positive opinions - some analysts expected the price of BNB to reach $1,000 as early as 2022.
We should also not forget that cryptocurrencies are a highly volatile asset. Even if, based on the results of several years, the forecasts come true and quotes rise, this does not mean that there will not be strong drawdowns during this time.
Where and how can you buy XRP cryptocurrency?
Cooperation
Binance Collaboration
Almost all collaboration agreements regarding Binance Coin involve adding the coin to the list of payment methods. At the moment, you can pay for BNB Coin on the following platforms:
- Tripio
is a Chinese blockchain platform dedicated to travel. Clients will be able to pay for hotel booking services using BNB; - Decentraland
is a decentralized virtual reality platform where users can purchase virtual plots of land using Binance Coin; - TravelbyBit
is another travel company that accepts Binance tokens; - Brisbane Crypto Airport
is the first airport that accepts exclusively cryptocurrency, including BNB; - MORE
is a private nightclub that now allows guests to pay with cryptocurrency.
This is only a part of the platforms, at the moment there are more than 150 of them. In addition, a partnership was concluded with the investment platform eToro, whose clients can now purchase Binance Coin coins.
