Binance Coin (BNB): Why Its So Interesting to the Cryptocurrency World – Yahoo Finance

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Cryptocurrency is red hot, but if youre looking to get in on the action, you cant buy it on the stock market through a standard brokerage account like you would with an index fund or a share of Amazon. Cryptocurrency like Bitcoin is traded on special exchanges like Etoro, CoinBase and BlockFi. The biggest exchange in the world by far is called Binance. Its so big, in fact, that a native cryptocurrency called Binance Coin was developed just to make it easier to pay for the sites services.

Read: Bitcoin Cash (BCH): Hows It Differ From Bitcoin and Whats It Worth?More: What Are Altcoins and Are the Potential Rewards Worth the Risks?

If youre not familiar with crypto exchanges, the following numbers might not mean much to you, but the 1.4 million transactions that are executed on Binance every second and the sites 2 billion in average daily volume are truly astounding statistics. Exchanges take fees for executing crypto transactions, and part of the reason Binance is so popular is that its transaction fees are among the lowest in the world. Users pay just 0.1% to execute each of those billions of trades.

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Binance reduces those already-low trading fees by a full 50% if you pay for them using the exchanges native cryptocurrency, Binance Coin (BNB). That means that instead of paying 10 cents on a $100 transaction, youd pay only 5 cents if you complete the transaction using BNB.

An Ethereum-based (ERC-20) token, BNB hit the market on July 21, 2017, when Binance made its initial coin offering (ICO) of 100 million BNB tokens. It eventually moved to its own unique blockchain called Binance Chain and limited the BNB supply to 200 million tokens in total.

See: Ethereum (ETH): What It Is, What Its Worth and Should You Be Investing?

In review, BNB is the native app for Binance, the worlds largest cryptocurrency exchange. It was designed specifically for use in the Binance ecosystem, which offers juicy rebates to incentivize its use but theres more to Binance Coin than just the trading discount. According to CoinJournal, BNB:

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Provides lightning-fast transactions

Can be used to buy and sell a huge variety of cryptocurrencies

Is safe and secure

Is accepted as currency by some service providers, mostly in the hospitality/travel industry

Find Out: What Is Chainlink and Why Is It Important in the World of Cryptocurrency?

On April 6, Forbes reported that the cryptocurrency market had topped $2 trillion in value. It was a huge moment for crypto, and Forbes cited BNB specifically as one of the smaller altcoins (Bitcoin alternatives) that are driving so much of that incredible growth.

But investors looking for a quick buck should tread lightly.

Beyond the crypto bubble, BNB is not yet widely accepted as currency outside the travel, accommodations and entertainment industries, although some investment platforms let you use it to buy mainstream securities. Its just as trustworthy as non-native crypto, but its not as anonymous since Binance traders must have registered accounts. In the end, its another altcoin that you can invest in if you choose, but like all crypto investments, expect a wild ride with ecstatic highs, terrifying drops and lots of drama in between. That, after all, has been the story of crypto investing so far.

This article is part of GOBankingRates Economy Explained series to help readers navigate the complexities of our financial system.

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Last updated: April 9, 2021

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Binance Coin (BNB): Why Its So Interesting to the Cryptocurrency World - Yahoo Finance