What is BNB Coin (REN) – BNB Token (BNB) Review

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If you are at all familiar with the world of cryptocurrencies and crypto exchanges, then you’ve certainly heard of Binance. It is, after all, one of the most popular exchanges in the world though it seemed to come out of nowhere just a few years ago. But if by some chance you’re not familiar with Binance here’s a bit of background to get you up to speed.

Changpeng Zhao founded Binance after several years wandering in the crypto wilderness learning the ins and outs of blockchain technology. Binance was the second crypto exchange he founded following fast on the heels of his Bitcoin exchange, OKCoin. But while OKCoin was Bitcoin-centric, Binance is different.

Some say the exchange was founded simply to provide his BNB coin with a purpose. And there’s certainly something to that. After all, with some 2,000 cryptocurrencies now drifting through cyberspace trying to attract the attention of investors and speculators, creating contextual value is the great challenge of the day. And by making BNB coin the native coin of such an important exchange, Zhao has proven he is up to that challenge.

The BNB token started its virtual life in 2017 as a standard ERC-20 Ethereum token. But in early 2019 Zhao and his team at Binance took the bold step of launching their own blockchain. And that is where BNB coin now resides.

Exchange Features More Info
Binance
  • Largest cryptocurrency exchange (Over 5 million users)
  • Low 0.1% trading fees.
  • Over 100 different altcoins.

The Binance Advantage

All of Zhao’s efforts wouldn’t have produced much by way of value, either for Binance or the BNB coin, if the exchange didn’t give traders and investors a compelling reason to use it. The Binance team understood this from day one and spent copious amounts of capital to develop a trading engine that’s far and away one of the most robust in the industry.

The Binance trading engine is capable of executing up to 1.5 million orders per second. Because of that power, you can be sure that opportunities won’t pass you by because your order is hung up by high trading volume. The power of the Binance trading engine is the envy of the industry and has driven growth of the exchange and, by extension, the value of the BNB token. It’s a complementary approach that’s being widely copied but rarely, as of yet, duplicated.

What is BNB Coin and What Is Its Purpose?

BNB coin is the native coin of the Binance ecosystem. While it was originally launched back in 2017, it was effectively relaunched in April of 2019 with the introduction of the Binance blockchain.

It should be noted that, partly due to the launch of the new blockchain, partly due to a hack that occurred earlier in the year and partly as a way to enhance the value of the BNB token Binance is replacing the ERC-20 BNB token with new BEP2 BNB tokens. More on this in a few minutes.

The BNB token is used by the Binance exchange to facilitate trades, pay fees, purchase Bitcoin and other cryptocurrencies and more. Binance has also incentivized use of their token by offering a discount on BNB-driven trades. Because of its central role in the operation of arguably the world’s largest crypto exchange the token has amassed a fair amount of both intrinsic and speculative value.

More About BNB Token Burning

In May of 2019, Binance announced that hackers had managed to work their way around the company’s once-lauded security apparatus and make off with some 7,000 Bitcoins worth millions of dollars.

The hackers used a complex method of attack that leveraged a number of separate accounts all working covertly and in unison to lift the Bitcoins before red flags were raised and withdrawals were automatically halted by the exchange.

Binance provided 100% coverage of the lost assets, but the episode acted to accelerate a process the company were already planning to initiate in the wake of launching their own blockchain in April. That process is known as “burning.”

In essence, the company is exchanging the old ERC-20 BNB coins for new BEP2 BNB coins that are native to the new, independent blockchain. Once a holder of BNB coins swaps his old coins for the new tokens the old coins will be burned.

Burning is a process by which old coins are sent to a public address where they will forever become unusable. The private keys that were previously used to facilitate those coins are voided and removed from access, and no coins that might through some miracle originate from the new public address will be accepted as valid anywhere.

Burns are typically executed for one of three reasons:

  • To enable the launch of an updated coin.
  • To effectively destroy unsold coins after an ICO.
  • To reward token holders.

Binance had planned to proceed with their incremental coin burn after launching their new BEP2 BNB coin, and the recent hack just accelerated the process.

How Will the Burn Work in This Instance?

Binance has announced they will use 20% of their profits each quarter going forward to buy back their ERC-20 tokens and “burn” them. This is in addition to swapping out existing ERC-20 BNB tokens from investors. It will take some time to execute, but the ultimate goal is to reduce the number of BNB coins in circulation by a full 50%. All burns will be accounted for on the Binance blockchain to ensure transparency.

Will All That Burning Affect the BNB Cryptocurrency Valuation?

One of the goals of new blockchain and all the burning is to reduce the number of tokens in circulation and increase the value of the remaining ones. So, yes, if the burn is successful, the value of your BNB coins should be affected in a positive way.

A bit of research verifies this notion. Those tracking the value of BNB will note that after a burn is announced but before it is executed the price of BNB tends to jump rather significantly. Right after the buy back and burn however, it drops. Although – and this is key – not all the way back to the levels where it was before the burn. So, in short, burns to this point have had their desired effect and should continue unabated.

The Best Places to Store Your New BEP2 BNB Tokens

One of the most common questions people have these days is what is the best way to store their new BEP2 BNB tokens. Perhaps surprisingly, you have quite a range of options.

  • The Native Binance Web Wallet – This is the easiest way to store either your existing ERC-20 BNB or your new BEP2 tokens. All Binance web wallets now exist in the new Binance blockchain. However, as the recent Binance hack demonstrated, storing your valuable assets in this type of “hot wallet” is risky. Regardless of whether or not you’ve enabled two-factor authentication.
  • Ledger Nano S – This is without a doubt the most popular “cold wallet” in use today. It’s a completely independent piece of hardware resembling a souped-up USB drive. You plug it into your computer when you want to conduct BNB related business and then remove it to keep your keys 100% safe from hackers.
  • SafePal S1 Wallet – This is another standalone hardware wallet that you detach from your computer and take with you when you’ve concluded your business. That way, no one can hack your keys and make off with your BNB or any other crypto. Fully compatible with the new BEP2 BNB tokens.
  • Ellipal Wallet – Another of the newest generation of offline wallets Ellipal is totally secure and keeps your crypto keys 100% sequestered against hacks. The Ellipal Wallet resembles a small smartphone and has an attractive and intuitive interface that makes using it a breeze. It’s compatible with both ERC-20 BNB and new BEP2 BNB coins.
  • CoolWallet S – This is another hardware wallet that’s going to allow you to sleep well at night, knowing some hacker weasel isn’t making off with your assets. It’s compatible with all major cryptocurrencies, including both versions of the BNB coin. It’s easily accessed through your iOS or Android device when you need it by simply downloading the CoolWallet app.

Other Relevant Web-Based Wallets

As you may have guessed we’re not big fans of internet-based wallets because you just can’t ever be 100% sure your BNB coins will be there when you wake up. That said there are a couple of web-based wallets the folks at Binance hold in high regard, so we feel compelled to present them here.

  • Guarda Wallet – While Binance CEO Zhao speaks highly of this web-based wallet, it is still a web-based wallet. Does it have a good reputation? Yes. Has it proven itself remarkably secure? Yes. Is it easy to use? Yes. But at the end of the day, it’s still a web-based wallet. So beware.
  • Trust Wallet – This has quickly become the official wallet of the Binance Exchange. Which means that the folks there think it must be pretty special. And while it may well be it’s still a web-based hot wallet and so that must be considered.

Best Exchange To Buy BNB Coin (BNB)

Exchange Features More Info
Binance
  • Largest cryptocurrency exchange (Over 5 million users)
  • Low 0.1% trading fees.
  • Over 100 different altcoins.
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