Step-by-Step Guide to Binance Coin
Binance Coin Guide
Contents
Binance Coin’s history
CZ (Changpeng Zhao)
Founder & CEO, Binance
Changpeng Zhao, known as CZ, is a serial entrepreneur with an impressive track record of successful startups. He launched Binance in July 2017 and, within 180 days, grew Binance into the largest cryptocurrency exchange in the world. An expert in blockchain and trading systems, CZ has built Binance into the leading blockchain ecosystem, comprised of Binance Exchange, Labs, Launchpad, Info, Academy, Research, Trust Wallet, Charity, NFT, and more. CZ spent his youth flipping burgers before studying at McGill University Montreal. In 2005, CZ quit his role as head of the Bloomberg Tradebook Futures Research & Development team and moved to Shanghai to start Fusion Systems. Soon thereafter, he learned about Bitcoin and joined Blockchain.com as Head of Technology. In 2020, CZ was recognized in the Bloomberg 50 as one of the most influential people of the year.
Yi He
Co-Founder & CMO, Binance
Yi He leads business, marketing, and branding strategy at Binance. Yi led the business strategy behind Binance’s growth to become the world’s largest crypto exchanges – having pivoted the company from a China-based crypto trading platform to a global blockchain ecosystem. Before co-founding Binance, Yi served as Vice President at Yixia Technology, the leading mobile video tech company behind popular mobile apps like Miaopai, Xiaokaxiu, and Yizhibo, where she led branding strategy and marketing operations. She was also a fundamental part of the fundraising strategy that drove the firm’s valuation to USD$3+ billion. Additionally, Yi was co-founder of the digital asset exchange OKCoin between 2014 and 2015. Yi is recognized as one of the most influential entrepreneurs in the blockchain industry and has helped to create a trend of hiring female executives in the male-dominant tech industry, increasing the market’s trust in women leaders.
Is Binance Good For Beginners?
Binance is extremely easy for people to pick up and start investing in cryptocurrency with! They have their academy and learning center so that even if you don’t know everything when you begin, you have all the reliable tools to learn.
Binance makes it as simple as setting up an account, connecting a form of payment, and buying the coins you wish to invest in. Binance provides access to hundreds of currencies, so you won’t have to worry about having to move your money around. Everything can be handled in one safe place within minutes of you deciding to invest.
Telling the story of Binance Coin’s beginnings would prove difficult without talking about the history of the Binance exchange. Binance Coin was launched in July 2017 with an ICO. BNB tokens were dispersed among various participants including angel investors and the Binance founding team as part of the ICO.
Here’s a quick rundown of how BNB tokens were distributed at first:
During the ICO, all 100 million BNB tokens available for public sale were sold for 15 cents each. Binance raised a total of $15 million in Bitcoin (BTC) and Ethereum (ETH) from this ICO.
From the $15 million raised, 35% was utilized to upgrade the Binance platform and exchange system, 50% was used for Binance branding, marketing and education of new innovators and the remaining 15% was set aside as a reserve in case of any emergencies or unusual circumstances.
During its ICO and early days, BNB was an ERC-20 token built on the Ethereum blockchain. Binance opened its crypto exchange platform a matter of days after the conclusion of its mid-2017 ICO.
Binance launched its own native blockchain in 2019 calling it Binance Chain (BC). With BC came the blockchain’s own native BNB coin. Users received the new BNB coin in exchange for their BNB ERC-20 tokens via a token swap in 2019.
How does Binance Coin work?
BNB is a crypto asset similar to other digital assets on the market in that it rises and falls in value as people use and trade it. People can hold BNB in compatible wallets off crypto exchanges and send the coin directly to others for payments or otherwise.
One might also wonder how to buy Binance Coin? People can buy BNB via a number of avenues such as Binance’s own crypto exchange, for example. As always, though, be sure to research and abide by any applicable jurisdictional laws.
On a more technical level, the layer-1 blockchain of Binance is merged to form the BNB Chain (previously the Binance Smart Chain and the Binance Chain).
When constructing the BNB chain, Binance tailored the blockchain for optimal performance when it came to trading on-chain, basing Binance DEX, Binance’s decentralized exchange (DEX), on this newly formed chain. Moreover, BNB chain transactions are fueled by a blockchain gas token called BNB, which stands for “Build and Build” (previously known as Binance Coin).
The BNB chain consists of the BNB beacon chain and BNB Smart Chain. The former is focused on BNB Chain governance that allows BNB holders to participate in staking and voting. The latter is a consensus layer, Ethereum Virtual Machine compatible, and has hubs to multi-chains.
BNB Burning
Binance spends some of its revenues each quarter to purchase back and burn Binance Coins, totally eliminating them. Binance has continuously performed quarterly burns since 2017.
Binance will continue burning BNB coins every quarter until it has purchased and destroyed 100 million Binance coins, or half of its original maximum supply. The process decreases Binance Coin’s supply and affects its rarity, which can potentially affect the asset’s value.
Binance also has something called the BNB Pioneer Burn Program, which evaluates certain instances in which BNB holders unrecoverably lost BNB, and repays them, deducting the amount from the next BNB burn.
What is Binance Coin used for?
Binance Coin’s usage comes in line with Binance’s growth. The asset initially started out as a vehicle to raise funds for the Binance exchange. Binance quickly gained significant traction as a cryptocurrency exchange following its 2017 launch. Binance grew from an exchange platform to more of an ecosystem under the Binance brand umbrella.
Over the years, Binance has launched a DEX, two blockchains, a peer-to-peer (P2P) crypto trading option, an option for crypto borrowing and more. BNB has grown in line with Binance’s expansion.
Users can use BNB coins to pay for transactions on the Binance Exchange. The BNB coin has historically served as a method of fee reduction on the Binance crypto exchange, with customers of the exchange paying lower fees by holding BNB and paying platform fees in BNB. Binance will extend the option of receiving a 25% reduction on trading fees when paying using BNB until July 13, 2022, at 11:59:59 pm UTC. In addition, BNB has also become a component of other Binance products.
Additionally, merchants can accept BNB as a form of payment, giving customers more options in terms of payment methods. Furthermore, BNB is used for various things in the entertainment industry, from paying for virtual gifts to purchasing lottery tickets.
Binance Coin may be used to invest in stocks, exchange-traded funds (ETFs), and other assets on a variety of platforms. On some platforms, BNB can be used as collateral for loans. Some apps allow users to use Binance Coin to split expenses and pay friends and relatives.
BNB pricing and dynamics
In general, BNB’s price has historically fluctuated in a fashion similar to other crypto assets trading on the market. Binance Coin’s market cap has grown over the years, surpassing a valuation of $70 billion. During Binance’s ICO, BNB sold for about $0.10 per token.
Since Binance’s ICO, BNB has traded its way up in value significantly, fetching a price tag of more than $600 per coin at times. Is Binance Coin a good investment? Its historical price rise likely yielded profit if buyers entered and sold at the right times. Although going forward, only the future will reveal where BNB’s price will head.
Binance and regulation
After Binance began operations in 2017, it grew into one of the largest players in the crypto space. However, regulatory difficulties notably surfaced against Binance in 2021. Binance faced regulatory action from a number of regions in 2021 including the Cayman Islands, Japan, Malta, Netherlands, Malaysia, the United Kingdom and Thailand.
The United Kingdom Financial Conduct Authority, for example, ordered Binance to cease all U.K. regulated operations. in June 2021 because it lacked the necessary authorization, registration, or license. Similarly, Malaysian authorities responded by filing a criminal complaint against Binance for operating as an unauthorized virtual asset service provider (VASP) the following month.
Is Binance banned in the United States? Prior to its 2021 headwinds, Binance announced the removal of United States customers from its main exchange in 2019, although Binance opened a platform compatible with U.S. users in the same year, called Binance.US.
In response to increased regulatory scrutiny, Binance has stated that it intends to open additional offices throughout the world and seek licenses in each jurisdiction where it operates. Binance is also beefing up its compliance capabilities and resources, as well as phasing out or restricting a number of high-risk items.
FAQS
How Is Binance Protecting Your Money?
The best way that Binance is protecting your money is by utilizing their secure asset fund for users or SAFU for short. A portion of all the fees Binance takes is placed into this fund in case of a financial loss to their users. Any money lost by their users due to Binance would be refunded by their SAFU put in place in 2018.
Additionally, Binance has several security features such as two-factor authentication, address whitelisting, and device restrictions. All of these features make it extremely difficult for anyone except yourself to access funds on your Binance account!
How is Binance Regulated or Insured by Governments?
The short answer is that Binance is under review by most governments at this time to see if it needs to be regulated. The SEC from the United States of America and the FCA from the United Kingdom have been the most verbal about their interaction with the largest crypto exchange on the market, Binance.
The FDIC insures United States dollars that are placed in Binance because it is stored at a legitimate bank, but once your money has been converted into cryptocurrency or token, it is no longer insured.
This rule holds true for every country that we’ve researched, so you should be safe most of the time storing your official currencies in Binance. Once it is into the cryptocurrency market, though, it is up to Binance’s policies to protect your investments.
Has Binance had Any Security Compromises?
Binance has had one major, known security compromised in April of 2019. Hackers stole around 40 million dollars in funds from Binance as well as security information for user accounts.
Binance, in this case, covered the stolen currency out of their pocket to ensure their users didn’t lose any funds. With that being said, within the last two years, Binance has not reported any additional compromises of their platform and found the people responsible for the hack in April 2019.
So for Binance has been relatively safe and secure when it comes to information. Additionally, they covered the losses to their users out of their own pockets, which speaks volumes about the integrity of their platform.
Is Binance Working With My Country Residents?
Binance is available in nearly every country around the world, with a few exceptions.
The United States initially buckled down on Binance and did not allow trading on the platform until they recently released a U.S. version of Binance (Binance US). This body of Binance is registered with the government but is under investigation for money laundering and tax evasion.
The FCA in the U.K. has, at this time, forced Binance to stop trading currency within the U.K. This is again due to potential investigations that are pending regarding money laundering and tax evasion.
Japan, Thailand, Malaysia, and Ontario Canada are also attempting to prevent trading on the popular platform until they can adequately regulate the trading of cryptocurrency on Binance.
Binance has come out and said they are attempting to make their system accessible to all people worldwide, but there are, of course, a few legal hurdles to overcome beforehand.
Binance Security Rules
Binance has so many security rules that it would need its article to include them all, but a few are immediately available to put your mind at ease.
Two-factor authentication is available, as well as device management to ensure that your money can only be accessed by someone with your computer and your phone. Additionally, Binance offers a decentralized wallet for your to store your currency in called Trust Wallet. This feature allows you to keep your funds safe under your complete control.
Not even Binance has the security keys to access your information once it is in TrustWallet!
Finally, there are withdrawal address managements that you can put into place with Binance. These restrictions will make it so that the only place your money can go is into your accounts. If someone wants to make a withdrawal, they would be forced to put it into another account that you’ve designated.
Binance Pros and Cons
With Binance, there are so many factors to consider, so we thought we’d give you a quick reference to review!
👍 Pros
•Fees as low as 0.1% regardless of volume
•Exceptional education materials
•Highly Secure
•Over 100 Currencies to choose from
•Mobile Friendly
•Credit and Debit Card Friendly
•Start with as low as USD 15 or EUR 15
👎 Cons•
Cryptocurrency not insured by governments
•Not available in all countries
•U.S. Exchange more limited than others
With cryptocurrency being as new as it is, it is easy to focus on the negatives and risks involved, but Binance makes it easy and low risk by allowing small deposits, vast security features, and excellent guides to get started.