Binance Coin (BNB) Explained

What You Need To Know About Binance Coin

A person making a purchase using cryptocurrency
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Table of Contents
Table of Contents

The Binance Coin (BNB) is the native cryptocurrency of the Binance blockchain, and Binance Smart blockchain. It was launched as an Ethereum token in 2017, but migrated to its own network in 2019. You can trade BNB on the Binance.US exchange; however, popular U.S. cryptocurrency exchanges such as Coinbase and Kraken do not offer BNB trading.

Learn more about how BNB came about, what it is used for, and why it is not widely available.

Important

As of August 2021, Binance.US tells The Balance that it is no longer allowing trades on its platform. Additionally, the parent company, Binance, has faced regulatory action in several countries around the world.


What Is BNB?

Binance Coin or BNB, the primary token of the Binance blockchain, was launched in 2017 on the Ethereum blockchain as an Initial Coin Offering (ICO).

During the BNB ICO, 100 million coins were offered to the public, and 100 million coins were retained by Binance’s founding team.

The coins were offered at a price of 2,700 BNB per Ethereum coin (ETH), or 20,000 BNB per bitcoin, which pegged the price of one BNB close to 15 cents. Given 100 million coins were sold to the public, the offering was expected to have raised $15 million to be used to enhance the Binance cryptocurrency trading platform, which was also introduced in 2017 on the Ethereum blockchain platform.

Chinese entrepreneur Changpeng Zhao is the CEO of Binance, which has grown into the world’s largest cryptocurrency exchange.

As digital currencies evolved, regulators began scrutinizing use of digital currencies for illicit activities such as money laundering, and other criminal activities such as ransomware payments, and raised questions about some degree of anonymity they provided. These regulatory questions led Binance to prohibit any U.S.-based users in 2019.

In the same year, Binance, in partnership with BAM Trading, launched Binance.US, which can allow U.S. users in most states to trade in BNB and other coins.

Binance.US is not available to users in Connecticut, Hawaii, Idaho, Louisiana, New York, Texas, and Vermont.

Special Features

BNB can be used on Binance.US to pay for trading and transaction fees. Fees paid with BNB will be discounted by 25% until July 13, 2022.

How To Mine BNB

The Bitcoin approach was to initially release a small number of coins and slowly increase the supply using the mining approach to reward network members for validating blockchain transactions.

BNB doesn't get mined, and the entire supply of 200 million coins was issued during the ICO instead. This supply is systematically destroyed by a process called "burning."

A coin burn permanently removes coins from circulation; they cannot be recovered. BNB coins will be burned quarterly, based on trading volume, until the supply is reduced from 200 million to 100 million. As of Aug. 2021, the BNB supply is a little more than 168 million coins.

How To Invest in BNB

Where BNB Is Available

BNB is available on Binance.US, although not many other exchanges offer it. On Binance.US, you can trade BNB in exchange for U.S. dollars, bitcoins, Tether (USDT), and Binance’s own stablecoin, BUSD.

Wallets

The native wallet for Binance blockchain and BNB is Trustwallet. Trustwallet is a non-custodial, or unhosted, wallet. The user holds the cryptocurrency directly on the wallet, rather than in an account on the exchange. The user also is responsible for maintaining keys and passwords. If the keys and passwords are misplaced, the coins are lost and cannot be recovered. Wallets such as Ledger, Coolwallet, Atomic, and a few others support the Binance Chain.

Notable Happenings

According to a Bloomberg news report in May 2021, Binance was under investigation by the U.S. Department of Justice, the IRS, and the Commodities Futures Trading Commission for possible illicit activities, including money laundering.

On Aug. 6, 2021, Binance.US CEO Brian Brooks announced his resignation on Twitter citing "differences over strategic direction" with his colleagues. Brooks had taken over the position just three months prior in May 2021.