What is Binance Coin (BNB)?
BNB is a cryptocurrency created and issued by the Binance exchange. Binance is currently one of the largest cryptocurrency exchanges in the world, and is generating billions of dollars in trading volume everyday. The Binance Coin, otherwise known by its symbol ‘BNB’, is an ERC20 based token that runs off of the Ethereum network. Binance Coin’s are primarily named ‘Utility Tokens’ in their ability to pay the trading fees imposed on the Binance exchange for lower costs. For example, trading fees are sliced in half by 50% when they are paid for in Binance Coin. Exchange expenses such as withdrawals can also be paid for in BNB, which gives off small discounts to those who choose to purchase the token.
Some token holders view BNB as a representation of Binance’s value. This view is speculative, as the price of BNB does not directly reflect Binance’s success, however, theoretically, as Binance expands as an exchange and employs more volume, the demand for Binance coins will subsequently increase, raising its price. Factually, however, if Binance succeeds, this does not mean that the Binance coin will automatically succeed. The exchange could grow at exponential rates, but the demand for their token does not need to change at all; it is speculative.
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Where to Buy Binance Coin (BNB)
Binance coins are currently available only on two exchanges. These exchanges are Binance and the Bancor Network. On all exchanges, the symbol for the Binance Coin will be ‘BNB’. Binance coins are only exchangeable for base cryptocurrencies and the fiat-pegged cryptocurrency ‘Tether’. In order to obtain BNB coins, you’ll have to go to one of the supported exchanges, found below.
Binance supports pairings for all major cryptocurrencies listed on the exchange for BNB. Unlike many exchanges that only list the altcoin pairing with Ethereum & Bitcoin, BNB is exchangeable, and has a fair amount of liquidity, for all major crypto pairings. This means you can find pairings for LTC/BNB, NEO/BNB, BCC/BNB, and so on. This gives a lot of opportunity rather than just a singular pairing. Note, however that alternative pairs may not have nearly the same liquidity that base cryptos such as Ethereum & Bitcoin may have. This means that orders placed for Binance with alternative pairings may not be filled as fast as they would with Bitcoin or Ethereum.
Step by Step Guide to Buying BNB
Binance coins can be obtained through the exchanges that were listed. However, you’ll have to sign up with either Bancor or Binance. The latter has a much higher level of liquidity considering it’s their respective token. To start, you’ll have to create an account with them. Creating an account with Binance is fairly simple and straightforward and does not require an initial KYC verification, unless you are looking to deposit and withdraw a large amount of crypto (10+ BTC worth). Once signed up, make sure you backup any account information, as if you’re locked out of your account it can be tedious to get back in. Enabling 2FA is possible with Binance using the Google Authenticator and will help keep out hackers adding an additional layer of security. Once you’ve completed all due diligence and have a verified Binance trading account, you can proceed to the next step.
Ironically enough, in order to purchase BNB tokens, you’ll have to exchange it, or convert it, to BNB from some base cryptocurrency. We’ve stated above the possible pairings that you can exchange for, however Bitcoin seems to be the popular choice, followed by USD pegged-Tether. To start, you’ll have to deposit Bitcoin or Tether to your Binance wallet. This can be done at the top right of the navigation bar under ‘Funds/Withdrawals’. If you find either Tether or Bitcoin, you can then press the ‘Deposit’ button which will create a new deposit address for you. If you’re entering the address manually, make sure the address is verified before sending. Once sent, you’ll have to wait for a series of confirmations which should not take long. Once confirmed, refresh the page and you should see your newly confirmed balance. The first step is completed, now you’ll have to exchange this base crypto in the BNB altcoin.
To convert your base cryptocurrency into an altcoin, you have to navigate over to the exchange tab which is found at the top left. Find ‘exchange → basic’ and then you’ll be prompted with the traditional exchange page. Next, you’ll have to exchange the base crypto you deposited for BNB coin. You can navigate easily through Binance by looking for the ‘BNB’ pairings; since it is their inclusive token, they have an entire section devoted to all of the BNB pairs. Bitcoin is the most liquid pair, so we’ll navigate to ‘BNB/BTC’, where we’ll exchange our Bitcoin for BNB.
Set either a market or limit order for the specified amount of BNB you’d like to obtain. Market orders are better for beginners as they execute right away at the best possible moment. Limit orders are more for precise order placement. Once done, wait for your order to complete, and if you navigate back to your funds section to see if your new balance has updated. Give it a couple of seconds, and you should see in your wallets tab that your BNB balance has been updated.
Considerations When Purchasing BNB
Like all cryptocurrencies, BNB is subject to extreme volatility. Keep this in mind when purchasing it in hopes that its price will increase eventually. BNB has actual utility unlike many cryptocurrencies, and its usage can be used for a discount on one of the world’s largest crypto exchanges. This will have a very large effect on its price, if Binance increases in volume and exposure.
Can I purchase BNB with fiat money?
A: At the moment, the closest thing to fiat money that you can use for purchasing BNB is USDT, which is the U.S. dollar pegged crypto ‘Tether’. It is not found on Coinbase, however, which is traditionally the place to go for fiat to crypto conversions.
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