Binance is known not only as a top trading platform for cryptocurrency. This is the first exchange that has its own currency – Binance Coin (BNB) cryptocurrency. Despite the fact that the coin, like the exchange itself, has not even a year yet, its market capitalization is actively growing. What is the reason for this and can we expect a significant increase in the cost of BNB? Is it worth investing in this cryptocurrency and how do experts assess its prospects? All the answers you will find in our article!
What is Binance Coin cryptocurrency?
Initially, tokens were issued to attract attention to the site. It was a kind of PR – use the internal coins of the exchange and get discounts when paying commissions.
The fact is that the commission on the Binance exchange can be paid both in the exchange cryptocurrency and in the BNB. If the exchange takes 0.1% of the transaction amount in the first case, in the second case the fee is only 0.05%.
Cryptocurrency Binance Coin itself launched on the basis of Ethereum. Last summer, ICO was held there, during which developers raised about $ 15 million in investments.
The unusual solution of developers quickly found a response from users who began to actively buy BNB to save on commissions. And this is even despite the fact that over time the discount will decrease. Such a plan
However, the creators of the exchange plan to turn Binance into a fully-fledged and fully decentralized blockchain platform with enhanced functionality. In addition, there is already talk of switching to a proprietary protocol and data processing algorithm.
Like other services of this kind, such a platform should have its own token, which will support all its functionality. However, Binance already has it.
So, if the transition to the new format really happens, the BNB will become a “fuel” for the entire system, and its value will become much greater than it is now.
At the moment, Binance Coin is, above all, a coin for getting a discount. However, BNB will be used to conduct transactions and pay for all exchange commissions in the updated platform.
It is not surprising that now traders are actively buying cryptocurrency, even if they are not going to use it to reduce the commission on Binance. Many are sure that they will be able to make money later on the sale of assets that have grown in value.
How to mine and where to store Binance Coin cryptocurrency?
Mining of BNB is impossible. The developers themselves mined and distributed coins. Most of them were sold during the ICO. Another part of the tokens was transferred to investors and sponsors supporting the project.
However, you can keep them on any wallet that supports the ERC20 format. Experts advise to pay attention to MyEtherWallet, MetaMask and Mist. Of the mobile applications, the most reliable is ImToken.
It is the most convenient for those users who have already acquired a cryptograph for storing ETH. BNB can be kept there. There is no need to start a separate storage.
However, there is one nuance. Most wallets with ERC20 support do not “see” BNBs by default. Many users complain that they are withdrawing funds from Binance or EtherDelta to their wallet, but coins do not appear on the balance sheet.
In fact, they simply do not appear in the wallet. To avoid this problem, the balance for the BNB will have to be added manually. To do this, select the option to add a new coin in the menu.
For example, in MyEtherWallet, you need to click on the button “Add Tokens” (“Load Tokens”), and then enter the blockchain address of the desired token. You can find it on the Etherscan website, where the addresses of all Ethereum tokens are collected.
How and why did the cost of Binance Coin cryptocurrency change?
Last summer, immediately after the completion of the ICO, Binance Coin was trading only 10 cents each. However, the market value of the coin began to grow in the fall. In September, it was 90 cents, in October – almost 1.2 dollars, and in November – 2.5 dollars.
The stock exchange sharply increased its market performance and entered TOP 5 in terms of daily trading volume (as of this writing, the figure is more than $ 90 million) in the fall.
Not surprisingly, many traders are interested in both the site itself and its token. The popularity of BNB contributed to bonuses when paying exchange commissions.
The most successful period for Binance Coin was January this year. Then the coin reached its price maximum, which has not been able to approach since then – $ 24 for 1 BNB.
According to analysts, this success was facilitated by the involvement in the project of Yi He, which was related to the creation of the famous Bitcoin exchange OKCoin. Along with the price, the market capitalization of BNB also increased. The figure came close to a billion dollars at the end of winter, and the cryptocurrency itself was included in the TOP 20 world rankings.
However, after a sharp jump, a course adjustment began, and the cost of the BNB dropped to $ 16. The price of a coin varied within 7-11 dollars in February and March.
However, many investors have a question – why does the cryptocurrency market capitalization increase so actively, but its price has fallen after the January maximum and is growing very slowly now?
According to analysts, in the first place, the growth of capitalization is associated with the success of the exchange itself. As you know, Binance is supported by many large investors who invest in the promotion of the site’s internal token.
As for the value of the coin, then, according to experts, it can not grow sharply due to serious competition in the market. Despite the far-sighted plans of the developers, so far BNB is used mainly to reduce commissions during stock exchange transactions.
Such a narrowly focused coin is difficult to compete with Bitcoin, ether and other top Altcoins with a higher price and more opportunities for trading.
In addition, in recent months, complaints about difficulties with the withdrawal of exchange-traded funds, problems with verification and low efficiency of technical support have become more frequent. All this reduced the confidence of users in Binance, which negatively reflected on the value of the exchange token.
Binance Coin cryptocurrency: prospects and opportunities in the market?
Despite the high competition and internal problems of Binance, most experts are positive about the prospects of the BNB. According to them, the coin will continue to increase capitalization, after which the market value will soon tighten.
Such a token can be used to pay exchange fees, launch smart contracts, confirm transactions and so on. Obviously, the value, and hence the market value of such a coin will be much higher.
Currently, a little over 116 million coins have been issued and the total issue is 200 million BNB. According to the developers, this figure is final and more coins will not be issued. However, periodically a certain number of them will be removed from the system.
The official website of the exchange even exhibited a plan for the destruction of coins. Each quarter, about 20% of the profits from the sale of BNB are spent on the purchase and burning of coins. This will continue until only 100 million BNBs remain in the system.
It is noteworthy that the burning of coins exists not only in words. Three months after the advent of cryptocurrency, the developers burned almost a million coins. This is one of the reasons for the autumn growth of the market value of BNB.
At the moment, the creators of Binance Coin have already destroyed tokens worth more than a half million dollars. So, this money was distributed among the remaining coins, which increased their value.
Regularly reducing the number of coins in the system always leads to an increase in their value. And if at the same time the market capitalization of cryptocurrency grows, the price increases even more noticeably.
Binance already has more than 3 million users. And almost all of them buy and use BNB. Now this factor helps the cryptocurrency to keep afloat in the conditions of tough competition with the top Altcoins.
If the number of Binance users and, accordingly, Binance Coin holders, will continue to grow, positive coin price dynamics are ensured.
The only catch is related to the breadth of the token. While BNB is used only within one of the cryptocurrency exchanges, the chances of a quick breakthrough are not very high.
However, even in the pessimistic forecasts, it says about $ 20 per BNB before the end of 2018. Under favorable conditions, the cost of cryptocurrency can overcome the barrier of $ 50.
Should I invest in a Binance Coin cryptocurrency?
Binance Coin is an actively developing and very promising project deployed on one of the largest cryptocurrency exchanges in the world. So, this is a good option for investment.
Especially since the course of the coin has not yet stabilized. If you look at the chart of the market value of BNB for the last month, almost symmetrical price jumps up and down immediately catch your eye.
For several days the cost of a coin can vary within 1-2 dollars. Therefore, it is very profitable to buy tokens in moments of short-term price drops.
However, in a hurry to sell them just is not worth it. BNB is not suitable for traders who are accustomed to act according to the “quickly bought – quickly leaked” scheme. The greatest profit will be received by those investors who buy coins for a long term and are ready to hold assets for several years.