gopixa / iStock.com
Cryptocurrency is red-hot, but if you want to take part in the promotion, you can’t buy it on the exchange through a standard brokerage account like you would with an index fund or stock on Amazon. Cryptocurrencies like Bitcoin are traded on special exchanges like Etoro, CoinBase and BlockFi. By far the largest exchange in the world is called Binance. It is so big, in fact, that a “native” cryptocurrency called Binance Coin was developed just to make it easier to pay for the website’s services.
Read: Bitcoin Cash (BCH): How Is It Different From Bitcoin And What Is It Worth?
You pay fees for trading cryptocurrencies
If you are unfamiliar with crypto exchanges, the numbers below might not tell you much, but the 1.4 million transactions that go on Binance every second and the site’s average daily volume of 2 billion are truly amazing statistics. Exchanges charge fees for executing crypto transactions, and one of the reasons why Binance is so popular is that its transaction fees are among the lowest in the world. Users only pay 0.1% to execute each of those billions of trades.
Binance Coin makes cheap trade cheaper
Binance reduces these already low trading fees by a full 50% when you pay them with the exchange’s native cryptocurrency, Binance Coin (BNB). This means that instead of paying 10 cents for a $ 100 transaction, you would only pay 5 cents when completing the transaction through BNB.
BNB, an Ethereum-based (ERC-20) token, hit the market on July 21, 2017 when Binance submitted its Initial Coin Offering (ICO) of 100 million BNB tokens. It eventually switched to its own unique blockchain called the Binance Chain and limited the BNB supply to a total of 200 million tokens.
See: Ethereum (ETH): What It Is, What Is It Worth, And What Should You Invest?
There’s a lot to like about Binance Coin
In retrospect, BNB is the native app for Binance, the world’s largest cryptocurrency exchange. It’s designed specifically for use in the Binance ecosystem, which offers hefty discounts to encourage its use – but Binance Coin offers more than just the trade discount. According to CoinJournal, BNB:
The story goes on
-
Offers lightning-fast transactions
-
Can be used to buy and sell a wide variety of cryptocurrencies
-
Is safe and secure
-
Is accepted as currency by some service providers, mostly in the hotel / travel industry
Find Out: What Is Chainlink And Why Is It Important In The Cryptocurrency World?
Are you considering an investment? Look before you jump on the train
On April 6, Forbes reported that the cryptocurrency market was worth more than $ 2 trillion. It was a big moment for crypto, and Forbes specifically named BNB as one of the smaller altcoins (bitcoin alternatives) that are driving so much of this incredible growth.
However, investors looking for a quick buck should exercise caution.
Beyond the crypto bubble, BNB is not yet widely accepted as a currency outside of the travel, accommodation, and entertainment industries, although you can use it to buy mainstream securities on some investment platforms. It’s just as trustworthy as non-native crypto, but it’s not as anonymous as Binance traders must have registered accounts. In the end, it’s another altcoin to invest in if you want, but like all crypto investing, it’s a wild ride with ecstatic highs, terrifying drops, and loads of drama in between. That was the story of crypto investing, after all.
More from GOBankingRates
Last updated: April 9, 2021
This article originally appeared on GOBankingRates.com: Binance Coin (BNB): Why It’s So Interesting to the Cryptocurrency World
