Binance is one of the top cryptocurrency exchanges in the world, facilitating 1.4 million transactions per second. Binance Coin (BNB) is the exchange’s native token, which is currently the fifth-largest crypto by market cap.
Despite recent price fluctuations, some investors believe Binance Coin has plenty of growth potential. If you want to invest in Binance Coin, here’s what you need to know.
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What Is Binance Coin (BNB)?
Binance has launched a decentralized crypto exchange, a peer-to-peer crypto trading platform and two parallel blockchains: Binance Smart Chain (BSC) and Binance Chain. According to Binance, the cryptocurrency exchange is the largest in the world based on trading volume.
Binance Coin is the cryptocurrency coin that powers the Binance ecosystem. BNB was launched in 2017—initially on the Ethereum blockchain—with an initial coin offering, or ICO, of 100 million tokens at 15 cents per token.
A unique feature of Binance Coin is coin burning. Every quarter, Binance uses 20% of its profits to buy back and burn Binance Coins, removing them from circulation and permanently destroying them.
Binance will continue this process every quarter until it destroys 100 million Binance Coins—approximately 50% of the supply. This strategy is designed to make the supply of BNB more exclusive and valuable.
Binance Coin holders can use the tokens to receive discounts on Binance crypto exchange transaction fees. It can also be used to trade for other cryptocurrencies, such as Bitcoin, Dogecoin or Litecoin.
Where Can I Buy Binance Coin?
Despite Binance’s popularity, Binance Coin is not available on all exchanges. Even popular exchanges like Kraken and Gemini don’t offer BNB trading.
Cryptocurrency exchanges that allow users to buy and sell BNB with either fiat currency or other cryptocurrencies include:
Binance.US users also receive a 25% discount on trading costs when using BNB to pay fees.
Some investors look for trading pairs, where a cryptocurrency token like Binance Coin is paired with a stablecoin like Tether. Exchanges that pair Binance Coin and Tether include:
- KuCoin
- FTX
How to Buy Binance Coin
If you decide to invest in Binance Coin, follow these steps to get started:
1. Select a Crypto Exchange
To buy cryptocurrency, you first need an account with a cryptocurrency exchange—a platform that facilitates crypto trades.
Not all crypto exchanges offer BNB trading, so do some homework to find a cryptocurrency exchange that does. There are many exchanges, from ones designed for beginners and basic trading features to more advanced ones for seasoned investors looking for more complex options like margin trading or futures.
2. Buy BNB
When you’ve found an exchange, you can fund your account with a debit card, credit card or electronic bank transfer.
Once your account is funded, enter the exchange’s trading platform. Enter Binance Coin’s ticker symbol—BNB—and the amount you want to invest, such as $50. Most exchanges allow you to choose between market and limit orders at the time of the transaction.
Although some exchanges allow you to use credit cards, we caution you against this funding method. Credit card issuers view cryptocurrency trades as cash advances, so you’ll incur higher fees and annual percentage rates (APRs). And borrowing money to invest is risky, particularly when trading cryptocurrency, and you could end up in debt.
3. Store Your BNB
Whether you’re buying BNB or other cryptocurrency tokens, you are responsible for safely securing your investment. There are multiple storage options:
- Hardware Wallets. Usually the safest storage method, hardware wallets are small physical devices. Because they can be disconnected from the internet or any other computer network, they’re considered a form of offline “cold storage.”
- Paper Wallets. Like hardware wallets, paper wallets are a highly secure option. With this approach, your private keys are written on a piece of paper or printed on a downloadable QR code. However, ensure you have a safe place to store that paper—and remember where it is! Otherwise, you will lose access to your cryptocurrencies.
- Software Wallets. Software wallets are more convenient than hardware or paper wallets. They’re downloadable software or apps that store your cryptocurrencies on your devices. They’re “hot wallets” because they’re connected to the internet. They are considered less secure than hardware or paper wallets, but they let you trade or sell your tokens more easily.
- Crypto Exchanges. With some cryptocurrency exchanges, the exchange will store your tokens on your behalf. Using a crypto exchange for storage is convenient and makes it easy to exchange your tokens. However, there is a risk of security breaches, so it’s better as a short-term solution.
What Can You Purchase With BNB?
Binance Coin has many uses. Beyond paying transaction fees on the Binance exchange, you can use BNB to do the following:
- Trade for other cryptocurrencies.
- Invest in stocks or exchange-traded funds (ETFs).
- Purchase merchandise or services.
Some retailers and online merchants accept BNB as a payment method; companies that take BNB include Travala, Zap Hosting and more.
Although BNB is popular, think carefully before investing your money in the token—or any cryptocurrency. Cryptocurrencies can be volatile, with steep price increases and decreases. Set an investing budget for yourself and only risk money you don’t need for essential expenses.
