Binance Coin (BNB) is the 5th largest crypto by market cap, immediately making it an interesting prospect for smart traders. But it is not just the high market cap that makes BNB worthy of attention. Binance Coin, by design, is based around an active scarcity model. Which is to say; as time goes by the circulated BNB is gradually destroyed, making it more difficult to purchase. This strategy, hypothetically, will make the currency gain value over time. Read this guide to learn how to buy Binance coin, as well as how the planned scarcity model works.
It is first important to separate Binance from Binance Coin. Binance is a cryptocurrency exchange, offering cryptocurrency trading and buying services. Binance Coin is the native currency of Binance. Though, the currency itself actually launched first in 2017. BNB was later, in 2020, made the currency of the dedicated Binance exchange.
Initially BNB was designed as a token for the Ethereum Blockchain, having the explicit purpose of covering Ethereum fees. But, upon seeing how incredibly popular BNB had become, the decision was made to transplant the crypto over to a new exchange. Those that want to buy BNB or trade BNB can now do so at Binance, or may find it at a number of other exchanges.
BNB has been making headlines. Not because it is gradually becoming more popular, but rather because of the baffling Burning Protocol. It should first be taken into account that when BNB launched in 2017 this was done via an Initial Coin Offering (ICO.) This means that 100 million tokens were flooded into the market, each being sold at 15 cents. Not unusual so far, but that is only the start of understanding the BNB business strategy.
The trick is that, by design, no more BNB will ever be created again. Hence the initial 100 million is the only BNB that will ever exist, making the currency a distinctly limited asset. The scarcity model is in contrast to cryptos like Bitcoin, where new BTC is being created on a regular basis.
So those that want to buy BNB now are engaging via that limited supply, with the purposeful scarcity already making purchase a difficult prospect. But, of course, the already limited nature of the currency is only getting exacerbated.
Every quarter Binance purchases back around 20% of all BNB, then destroys those tokens entirely. With the circulated tokens only getting less it makes sense that demand will automatically increase. The question is; who will have the remaining BNB in a few months, and a few years?
The world of cryptocurrency trading may seem complicated on the surface, but the good news is that trading and buying has been designed with convenience in mind. So even someone that has no idea how to buy Binance Coin can learn to do so quickly. This step by step guide will outline the purchasing process, as well as give a bit more information on the various factors involved.
Cryptocurrency can be bought directly with fiat currency, or it can be traded for with other cryptos. It is also possible to trade BNB for other cryptos, as the trader sees fit. BNB can be acquired at an exchange or a broker. Importantly, there are centralised exchanges and decentralised exchanges. Centralised exchanges abide by financial regulations, meaning that extra security steps are taken. If a trader wants to do business at a centralised exchange they will have to complete the Know Your Customer (KYC) process. Completing the process will require verified identification. Decentralised exchanges do not require the KYC process, allowing for anonymous trade.
Before a trader decides to buy Binance coin storage should first be taken into consideration. Crypto is a digital asset, of course, but it is treated as a physical asset. This means that the currency must be moved and stored in a secure facility. Secure facilities include digital wallets, physical wallets, and the option even exists to store crypto as paper money.
Digital wallets exist online, requiring no more than a few moments to set up. A trader simply has to decide on an option, sign up for an account, and the digital wallet will be ready for use.
Physical wallets are considered by many as the ultimate security solution. Instead of storing crypto online the currency is withdrawn to an electronic device, similar to a USB stick. The crypto exists on the device, free from virtually all forms of online cyber-attack. The crypto can then be returned to the online world as is desired.
Storing crypto as paper money is another option. Though, of course, this isn’t the same as fiat paper money. Crypto paper money is a printout of public and private keys, accompanied by a functional QR code. Hence, the crypto is safe and secure, though only assuming that the printout itself is secure.
How a trader decides to store their crypto is a matter of preference, but it is necessary to choose an option in advance.
To buy Binance Coin an exchange or broker must be chosen. But making that choice can be a complicated prospect, with many factors to take into consideration. Does the exchange have a good reputation? Does the exchange offer interesting or unique services? Does it support the desired cryptos? There is no need to rush into making a decision, and doing research before making a commitment is highly advisable.
Once an exchange has been chosen it will be necessary to sign up for an account at that platform. Again, depending on whether the exchange is centralised or decentralised it may be necessary to complete the KYC process. If the exchange is decentralised only a verified email address will be required.
To buy BNB funds will be required in the account. Fiat currency can be deposited via credit card, debit card, bank transfer, Google Pay or Apple Pay, depending on the exchange. To make a fiat currency deposit the deposits option should be selected at the exchange, after which the option to deposit in the traditional manner may be selected. After deposit the fiat currency will be available shorty, depending on the banking system used.
To trade for Binance Coin a crypto deposit will have to be made. This is slightly different from depositing fiat currency, though should not take more than a few minutes. Once indicating which crypto will be deposited, the exchange will generate a digital address. This is the address that the crypto can be transferred to from a wallet.
With funds available, a trader can now buy Binance Coin at the exchange.
To buy BNB with fiat currency it is simply a matter of selecting the crypto, then indicating how much of the currency is desired. Alternatively a trader can indicate how much fiat currency they’d like to spend, after which the exchange will assign the appropriate amount in crypto. The purchase should be done almost instantly.
To trade for BNB with another crypto the process is simple. It will have to be indicated which the desired crypto is to be acquired, as well as which crypto will be used for the trade. Once these details have been inputted the transaction should go ahead. Remember; it is possible to trade Binance Coin for other cryptos as is desired.
It should never be forgotten, no matter what the purchasing or trading method used, that all transactions are irreversible.
It is possible to leave the purchased crypto at the exchange, but that is not advised. Cybercrime does exist, and leaving crypto at an exchange means that the currency is vulnerable. The purchased BNB should be withdrawn immediately for storage, with the above mentioned wallet methods available. It is quick and easy to transfer the crypto from a wallet back to an exchange if needed. To buy BNB is to also be responsible for its safe keeping.
Whether a trader wants to buy Binance Coin, trade Binance Coin, or do any other transaction, there are going to be fees. The biggest fees will come from buying a cryptocurrency directly with fiat currency, due to the exchange taking a fee, as well as the traditional bank taking its own fee.
It, therefore, always far cheaper to trade crypto for crypto. Exchange fees are generally less than traditional bank fees. It is for this reason that most traders buy crypto first before engaging in other trading.
Now that we know how to buy BNB, let’s look at some of the other factors involved.
The cryptocurrency market is speculative, meaning that traders must predict whether they believe the value of a currency will go up or down. It is, of course, very beneficial to buy BNB at a low value, then sell it later at a higher value. As to whether the crypto will gain value is what trading is all about. The scarcity model of BNB is designed to make it gain value, bit it remains to be seen if the strategy will work.
Hence, whether BNB is a good investment or not is a matter of speculation. What is known for sure, however, is that Binance Coin has seen a meteoric rise in popularity. Many say that the increase in popularity will stay steady, citing the crypto as an excellent investment opportunity.
It is also possible to trade Binance Coin for other cryptos. As to why a trader would do this is up to them, but the option certainly exists. A big draw of cryptos is that they can be traded quickly and easily, with many exchanges ready to facilitate the transaction. To trade BNB the steps listed above need simply be followed.
BNB can also be used to purchase goods and services. There are currently only a limited number of retailers that accept BNB directly, but that numbers is growing rapidly. Alternatively, BNB can simply be exchanged for fiat currency as is necessary.
Finding its start as a token on Ethereum, Binance Coin has taken on a life of its own. The Binance exchange, as well as the native token itself, have become a hot topic of conversation. The Burning Protocol is, on the surface, a smart way to increase the value of any commodity.
A trader that is looking to buy Binance Coin is taking a risk, but then all investments come with risk. Getting in on the gamble now is simply a matter of learning how to buy BNB, making a purchase, and then waiting to see how the market evolve.
Yes, 100 million tokens were originally minted, and no more will ever be minted. Hence there is a finite amount of the crypto available.
Yes, once a quarter Binance buys back around 20% of the available currency, then burns it forever. The available amount of the crypto is, therefore, being reduced by 20% of its total every quarter. This practice aims to make BNB scarcer, therefore, hypothetically making it more valuable.
The buying and trading of cryptos will depend on jurisdiction. The vast majority of governments have not restricted crypto trading, but before making any transactions it is a good idea to get more familiar with local financial rules and regulations.
Many crypto experts are saying that Binance Coin is an excellent investment opportunity due to the scarcity model. However, cryptos are a speculative market. Virtually all cryptos still have enormous value fluctuations, meaning that it is difficult to predict if BNB will gain value or not. Hence any investment should be done carefully, preferably with the advice of an unbiased financial expert.