What is Binance Coin and is it a good investment?

  Binance Coin (BNB) is the crypto token used to trade cryptocurrencies and pay for fees on the Binance Exchange. It’s the native digital coin of the Binance Exchange which is the largest cryptocurrency exchange it the world. Binance Coins can also be traded P2P, used to buy and sell goods and services, book airflights and accommodation or bought as a speculative investment. BNB fuel the operations of the Binance Exchange and supports multiple functions on the ecosystem. This includes paying for exchange fees, trading fees and listing fees. At this time, BNB cannot be exchanged against fiat currencies, only through crypto-coins like Bitcoin and Ether.  

Digital token with a purpose

Eligible users of the Binance Exchange are offered a discount on a variety of fees if they pay with Binance Coins. The discount is up to 50% in the first year of membership and 25% in the second year. BNB can be used to pay the % per trade fee on the Binance exchange as well as its withdrawal fee. BNB can also be traded for other cryptocurrencies on the Binance exchange. Trading and investing in cryptocurrencies is subject to market risk. However, taking into account Binance is the largest cryptocurrency exchange in the world by trading volume, the fact that BNB has a practical use and its price is relatively stable; BNB is considered to be a good investment and one of the safest cryptocurrencies on the market.

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Fast facts about Binance Coin

What is the Binance Exchange?

Binance Exchange is the largest blockchain and crypto-asset exchange in the world by trading volume. The cryptocurrency exchange delivers a secure, fast and seamless trading experience which is fueled by Binance Coin (BNB). The name Binance is a combination of the words binary and finance. Binance was founded in 2017 by Changpeng Zhao. It’s headquarters are located in Washington, United States. Binance was initially based in China but later moved out of China due to China's increasing regulation of cryptocurrency. Changpeng Zhao is a Chinese-Canadian business executive and CEO of Binance. Zhao previously founded Fusion Systems in 2005 in Shanghai; the company built high-frequency trading systems for brokers. In 2013, Zhao joined Blockchain.info as the third member of the cryptocurrency wallet’s team. He also worked at OKCoin as chief technical officer. OKCoin is a platform for spot trading between fiat and digital assets. Today, the average daily volume of cryptocurrency traded through Binance is about 2 billion and 1.4 million plus transactions occur per second. You can trade more than 45 digital coins through Binance, including Bitcoin, Ethereum, Litecoin and Binance coin.  

Binance timeline

What is the Binance Exchange used for?

Binance is an easy-to-use exchange for crypto-to-crypto trading with trading fees starting from 0.10%, which is very low compared to other exchanges. In addition to low transaction fees, Binance offers high liquidity and additional discounts if users pay in the native Binance Coin (BNB). This is the official cryptocurrency token for Binance. Binance provides cryptocurrency traders with a wallet that they use to store their digital funds. Once they have completed the necessary KYC requirements, users can create an account, add cryptocurrency funds in the wallet provided by Binance and start trading cryptocurrencies. The cryptocurrency exchange acts like a traditional exchange and offers services around the trading, listing, fundraising and de-listing or withdrawal of cryptocurrencies. Cryptocurrency developers launching their own tokens can raise funds through Binance’s initial coin offerings (ICOs). Binance currently supports three types of trade orders:

• limit orders; executed only at the limit price set by the trader
• market orders; executed immediately at the best available market price
• stop limit orders; executed only when the price reaches a specified level

What is Binance Pay?

Binance recently launched Binance Pay which is a contactless, borderless and secure cryptocurrency payment technology. It allows users to send and receive crypto payments worldwide the same say people use PayPal to send and receive fiat currencies. At the moment, Binance Pay is only available to eligible users of Binance Exchange. To start using Binance Pay, you need to register on Binance.com and complete the identify verification. Binance Pay supports over 30 cryptocurrencies and 5 major fiat currencies. Binance Pay transactions are confirmed almost instantaneously. However, due to compliance requirements, funds made to a Binance Pay wallet can only be used 24 hours after you have received them in your wallet.  

How to open a Binance account

Follow these easy steps below to open a Binance account and receive a 20 to 25% fee discount. Step 1: Go to Binance’s registration page Click this link to go to the Binance registration page. Step 2: Fill out the registration form Enter your email address and password on the Binance registration form. Tick the box to agree to the terms of use and click on the Create account button. Step 3: Verify your account You will receive an email after you have registered an account with Binance. It contains the verification code for your email address. Enter the verification code to verify your email address. Once you’ve done this, your Binance account is ready to use. Step 4: Set up 2FA for your Binance account Set up two-factor authentication (2FA) to increase the security of your account. You can use the Google Authenticator app or  your phone to receive 2FA codes.  

How to deposit money into your Binance account

You can deposit fiat currencies such as USD, Euro and GP as well as cryptocurrencies into your Binance account. To deposit money into your Binance account, click on Wallet and then click on the Deposit button.  

How to get a 25% fee discount on Binance

You can use Binance Coins (BNB) to pay for trading fees if you hold BNB in your Binance wallet. Every time you make a trade, the fee will be deducted from your BNB balance and you will receive a 25% fee discount. If you have opened a Binance account on their site, your trading fee could be as low as 0.06% and you’ll pay 40% lower fees on Binance. The option to pay trading fees in BNB is enabled by default. You can check this on your Binance dashboard. You can disable this default function if you don’t want your BNB balance to decrease as you trade. However, you will pay more trading fees if you disable this option.  

How does Binance Coin work?

Binance Coin started as an Ethereum-based ERC-20 token. In 2019, it was moved to its own custom blockchain called Binance Chain. Binance Coin on the Binance Chain is the same as the Ethereum coin on the Ethereum network. It’s used as fuel to pay for network transactions. The difference is Binance Coin mostly exists to pay for Binance fees incurred for crypto-on-crypto trading. Ether pays for Proof of work (PoW) for the execution of smart contracts and decentralised applications (DApps). Binance Chain uses the Tendermint byzantine-fault-tolerant (BFT) consensus mechanism. The system comprises different types of nodes:

• validator nodes select community members who vote to validate transactions
• witness nodes which witness the consensus process and broadcast transactions to other nodes
• accelerator nodes which are owned by organisations and speed up the transaction validation process

When the blocks have been produced, the fees collected from users are distributed among all validators. Fees are paid by users in BNB which was created as a unique token for the Binance Exchange. Different types of exchange fees can be paid with Binance Coins, including transaction fees, voting fees for new tokens, commissions and fees for launching new instruments.  

What are Binance Coins used for?

Binance Coin was created at the same time as Binance Exchange. It’s primary use is to pay fees on the exchange and users receive a discount in transactions fees as an incentive. It can also be traded or exchanged for other cryptocurrencies.  

How to buy Binance Coins

Buy BNB with a bank transfer

Buy stablecoins listed on Binance by wiring money from your account to the providers of these coins. You can then use these stablecoins to buy BNB on the Binance exchange.  

P2P trading

P2P (peer-to-peer) trading is also known as C2C (customer-to-customer) trading. P2P traders deal directly with a counterparty to exchange the fiat asset offline and confirm the transaction online. Once the offline fiat asset exchange is confirmed by both parties, the digital asset is released to the buyer.  

WazirX transfer

You can move your funds between your Binance wallet and WazirX wallet at zero-fees.  

MetalPay

You can buy and sell BNB with USD from a FDIC-insured bank account.  

Buy BNB with Credit Card

You can directly purchase BNB with a debit or credit card on the Binance Exchange using a Visa or Mastercard.  

Buy and sell BNB on the move

Download the Binance crypto trading app and trade your BNB plus about 150 other cryptocurrencies, anytime and anywhere.  

How to store Binance Coins

It’s recommended that you transfer your Binance Coins to a cold wallet immediately after receiving them. This is the safest place to keep cryptocurrency; rather than keeping them on the exchange platform which is a soft target for attacks. Cold wallets are not connected to the Internet; hot wallets are. Cold storage means generating and storing the cryptocurrency coin’s private keys in an offline environment, away from the Internet. You have the choice of:

• hardware wallets
• paper wallets
• desktop wallets
• USB driver

Are Binance Coins a good investment?

If you are an active trader on Binance, it makes sense to invest in Binance Coins so you can benefit from the discounts on fees. If you already have a Binance account, you can make use of the option to use BNB to pay for fees and receive a 25% fee discount. You should always have some BNB in your Binance account, otherwise discounted fees can't be deducted from your BNB balance when you make a trade. Riding on its strength for its practical use to pay fees and as a payment method, Binance’s native digital coin has maintained healthy trading growth since 2018. It’s proving to be an excellent long-term crypto-asset investment as well as best for short-term holds. BNB tokens are regularly burnt or destroyed by Binance to ensure that BNB steadily increases in value. This makes BNB one of the more stable cryptocurrencies on the market. BNB is one of the safest cryptocurrencies to invest in and its price is relatively stable.  

Surging volume

While it’s near impossible to accurately predict the price trend of cryptocurrencies, market experts claim BNB will grow at least 77 percent in 2026 with a predicted price of around $720 by the end of the year. In the last quarter of 2026, the price of BNB traded between $23 to $35 with an average daily volume of $400 million. BNB’s 24-hour trading volume surpassed $1 billion for the first time on 1 February 2026 and a new record of $7.52 billion volume was set on 10 February as the price crossed above $148.

Why Binance burns Binance Coins

Every quarter, Binance uses 20 percent of its profits to buy back and burn Binance Coins. The cryptocurrency exchange has consistently carried out quarterly BNB burns and will continue to do so until it buys back and destroys 100 million Binance coins. This is 50 percent of the total supply. The practice of burning Binance Coins is to ensure the supply of the digital tokens remains finite, making it scare and more valuable.  

DISCLAIMER

Trading cryptocurrencies carries a high level of risk and may not be suitable for all retail traders and investors. Consider your capacity for risk before deciding to trade cryptocurrencies. There is the possibility that you could lose some or all of your initial investment so you should not invest money that you cannot afford to lose. The information in this article is for education purposes only. Forex Trading Africa will not accept liability for any financial loss which may arise directly or indirectly from use of or reliance on information contained in this article.    

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