The Binance Coin (BNB) has become one of the most popular and successful cryptocurrencies around.
The BNB is an unusual cryptocurrency beacause Binance, a popular cryptocurrency exchange.built it. They designed Binance as a native asset for the exchange. To explain, a native asset is a token that people can use to pay for cryptocurrencies on the exchange.
Mr. Market likes Binance Coin (BNB). CoinMarketCap listed Binance Coin as the fifth most trending cryptocurrency on 6 June 2021. In addition, CoinMarketCap estimates the Binance Coin (BNB) was the fourth most valuable cryptocurrency on 8 June 2021. CoinMarketCap gave Binance Coin (BNB) a Coin Price of $330.364 on 8 June 2021.
Similarly, CoinMarketCap estimates Binance Coin had a Market Capitalization of $50.721 million, a Fully Diluted Market Capitalization of $56.375 million, and a 24-Hour Market Volume of $4.437 million. They based those numbers on a Maximum Supply of 170.533 million BNB and a Circulating Supply of 153.433 million BNB.
In comparison, Coinbase gave Binance a Coin Price of $330.34, a Market Cap of $50.6 billion, a $424 billion 24-Hour Market Volume, and a Circulating Supply of 153.4 million BNB, on the same day. Thus, Binance Coin is on Coinbase.
So what is Binance?
The Binance Coin (BNB) began as an ERC20, Ethereum-based cryptocurrency. They built BNB as the native asset for the Binance Exchange.
However, Binance now runs upon a custom blockchain they call the Binance Chain. In contrast to Ethereum the Binance Chain cannot smart contracts. A smart contract is a digital robot that performs a specific task. They built the Binance Chain as a native blockchain for the Binance platform.
You can use BNB to pay Binance’s 0.1% trade fee and Binance’s withdrawal fee. You can trade the BNB for other cryptocurrencies in Binance’s Wallet.
They run the Binance Dex, a decentralized exchange (DEX) on the Binance Chain. The Binance Dex offers several financial services of including Binance Earn, a one-stop investment solution, Binance Pool, which allows anybody to mine Binance, the Binance Visa Card allows you to pay with Binance at stores.
Binance Dex and Binance Chain
Meanwhile, Binance Dex offers Crypto Loans and Liquid Swap which allows you to swap cryptocurrencies. They claim individuals could earn double through Liquid Swap.
Moreover, the Binance Dex offers derivatives including USDS-M Futures, COIN-M Futures, Vanilla Options, Leveraged Tokens, and Battle. The USDS-M is a Bitcoin (BTC) -Tether (USDT) derivative. The Coin M Future is a Bitcoin (BTC) USD derivative, the Vanilla Options are call options on cryptocurrencies, the leveraged tokens give traders more leverage for transactions. Battle is a derivative that enables long and short trades.
The trading capabilities on the Binance Dex include conversion, interfaces, margin trading, peer-to-peer (P2P) bank transfers and 100+ options. And stock options that allow individuals to trade stocks with crypto.
Is Binance the Future of Digital Finance?
I think Binance Coin (BNB) is popular because they designed it as a finance and trading tool.
The Binance Dex allows users to send and receive BNB to anybody else in the Dex. In addition, any Binance Dex user can issue new tokens, individuals can receive tokens in return for tokens sent. In addition, you can burn tokens as needed and freeze tokens.
The trading community can create new trading pairs on the Binance Dex. In addition, you can create sell and buy orders through those trading pairs. You can also secure DEX funds through applications such as Trust Wallet.
I think one reason Binance is popular is that they built Binance for cryptocurrency trading for Fintech and blockchain enthusiasts. Since most cryptocurrency traders are blockchain and Fintech geeks they like Binance.
Is Binance Coin (BNB) a good cryptocurrency?
I think the Binance Coin (BNB) is a good cryptocurrency because they designed it as a financial instrument.
My guess is that the Binance Coin will grow in value as the popularity of cryptocurrency grows. However, there is an enormous threat to Binance and custom blockchains out there. The threat is central bank digital currencies or national cryptocurrencies.
The danger to Binance is that whatever blockchain the Federal Reserve builds its cryptocurrency from will become the standard blockhain. If the Fed builds the Digital Dollar in Ethereum (ETH) or EOS (EOS). Then EOS or Ethereum could become the most used blockchain.
Remember, the US Dollar is the world’s reserve currency and the most popular currency on Earth. Whatever blockchain the Fed uses will become the standard in the financial industry. Consequently, all the money and effort invested in the other blockchains will be worthless.
How the Fed could Make or Break Binance
Thus, the Fed could kill Binance and Binance Coin (BNB) by issuing a Central Bank Digital Currency (CBDC) built in EOS or Ethereum. On the other hand, the Fed could increase Binance’s value if it issues a cryptocurrency built in Binance Chain.
Note: I don’t know what blockchain the Fed plans to use. Although, I suspect it will be EOS (EOS) or Ethereum (ETH).
Conversely, the Fed could increase Binance’s value by increasing interest in cryptocurrency. To explain, a Fed CBDC could increase the value of Binance because the appearance of a Fed CBDC will convince many people to use cryptocurrency. Thus, Crypto trading could explode, which will drive more traders and more money to the Binance Dex.
Despite the existential threat a Fed CBDC poses, I consider Binance Coin (BNB) an excellent cryptocurrency for investors and speculators to investigate. I think Binance has a bright future because the amount of cryptocurrency trading is about to explode.
Originally published at https://marketmadhouse.com on June 8, 2021.