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Binance Coin (BNB)

Maxbit Support
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What is Binance Coin (BNB)?

Binance Coin (BNB).png

  1. Native Blockchain:

    • Initially, BNB was an ERC-20 token on the Ethereum blockchain. However, in April 2019, BNB migrated to its native blockchain, known as Binance Chain. Later, Binance introduced Binance Smart Chain (BSC) as a parallel chain, facilitating smart contracts and decentralized applications (DApps).

  2. Consensus Protocol:

    • Binance Chain uses Tendermint’s Byzantine Fault Tolerance (BFT) consensus, while Binance Smart Chain utilizes a dual-chain architecture with the Ethereum Virtual Machine (EVM)-compatible Proof of Staked Authority (PoSA) consensus.

  3. Trilemma (Security, Speed, Scalability):

    • Security: Both Binance Chain and Binance Smart Chain prioritize security with their consensus mechanisms, ensuring that malicious activities can be detected and prevented.
    • Speed: Transactions on Binance Chain are quick, usually confirming within seconds. Binance Smart Chain also offers relatively fast block times.
    • Scalability: Binance Chain was designed for simple transfers, while Binance Smart Chain handles more complex operations with dApps, maintaining a performant environment even under load.

  4. Founder / Date Founded:

    • Binance Coin is the creation of Binance, one of the world's largest cryptocurrency exchanges, founded by Changpeng Zhao (often known as "CZ"). Binance was launched in July 2017, with BNB being its native token.

  5. Objective / Use Case:

    • Initially, BNB was used to pay for trading fees on the Binance platform, offering users a discount. Over time, its use cases expanded. It's now utilized in token sales on Binance Launchpad, as a transaction token on Binance Chain, and for various operations on Binance Smart Chain.

    BNB is also increasingly accepted for real-world payments and used in DeFi projects.

  6. Total supply / Limit or Unlimited:

    • The initial total supply of BNB was 200 million. Binance has a plan to conduct periodic "burns" of BNB to reduce the total supply gradually. Their goal is to eventually decrease the total supply to 100 million BNB.

  7. Supply Deflation:

    • To achieve the aforementioned supply reduction, Binance conducts quarterly BNB token burns. The number of coins burned is based on the trading volume on the exchange over the previous quarter. This process will continue until the total supply reaches 100 million BNB.

          This overview provides beginners with a basic understanding of Binance Coin's characteristics and its role within the broader Binance ecosystem. As always, due to the dynamic nature of the crypto world, staying updated with the latest developments and news is crucial.

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