Powering Transactions on BNB Smart Chain

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4 min read

Explore why BNB is what underpins one of the most popular blockchains.

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If you’ve been diving into DeFi or the latest tokens to hit the market, you’ll likely come across BNB on BNB Smart Chain (formerly Binance Smart Chain and commonly referred to simply as BSC). Thanks to this blockchain's low fees and fast transactions, it has grown a diverse following. So it’s time to find out why BNB has become a valuable tool to many exploring crypto.

What Is Binance Coin (BNB)?

Binance Coin is most commonly referred to as BNB due to its ticker symbol. Launched initially and issued by the centralized exchange Binance, BNB has become the fuel that powers the BSC network, a favorite blockchain for those seeking low transaction fees that also benefit from fast transactions.

While BNB had initially been created as a token on the Ethereum network, it is now primarily used on Binance Smart Chain (BSC) as a native asset used to pay for transactions on the network. It was launched with a maximum supply of 200 million BNB tokens, but this has since been reduced through burns and other means.

Binance Smart Chain

Binance Smart Chain (BSC) is a general-purpose blockchain supporting smart contracts. While your first thought may be this sounds similar to Ethereum, there is a good reason; it is actually based on Ethereum. BSC is also Ethereum Virtual Machine (EVM) compatible, making it far easier for developers comfortable working with Ethereum to port or release new works that operate using the BSC blockchain.

BNB is used to pay network fees whenever you are interacting with BSC, and this can mean transferring BNB, moving tokens, interacting with smart contracts, or just about anything else.

BSC uses a token standard called BEP-20. Once again, it is very similar to the most commonly used token standard on Ethereum, known as ERC-20, again making it sometimes relatively trivial for developers to port their tokens, smart contracts, and dapps over to BSC or add additional support for the network.

Please note that another blockchain project with a similar name exists by the name of Binance Chain, and while BNB is useable on this chain, these networks are not interchangeable. Hence, you must pay attention to which network you are using when performing transactions with BNB. For example, when using your BNB wallet on LocalCoinSwap, this only supports the version of BNB on BSC, so it’s crucial to check that you are only sending or receiving from BSC wallets that support BEP-20 tokens when using it.

BNB Burns

One of the ways that holders of BNB are incentivized is through burns performed by Binance. Quarterly burns are conducted with the goal of halving the supply of BNB down to 100 million. Opting to leverage a burn model like this enables holders to be exposed to how well a business is doing without having to own stocks or otherwise be involved in the traditional side of the company.

There is also a program that operates called the BNB Pioneer Burn Program, which looks at losses that have occurred by certain BNB holders, and in some cases, they may be approved for reimbursement while the amount lost is removed from the next burn cycle. This type of opportunity is something that is not commonly seen and may be extremely helpful for someone who has irretrievably lost access to some BNB via whatever means.

Uses and Functionality of BNB

  • Pay transaction fees on BSC as well as some exchanges
  • Book travel and accommodation with sites like Travala
  • Take out a loan on ETHLend
  • Invest in BSC projects
  • Gain exposure to the BNB buyback and burns
  • Buy virtual assets (NFTs)
  • Engage with dApps on BSC
  • Explore DeFi opportunities

Can You Mine Binance Coin?

BNB was sold at ICO in 2017, with the entire supply minted at launch. As such, there is no way to mine BNB, and the BSC network where it is most commonly found is not a proof-of-work network that requires mining to secure the network. Initially, 200 million BNB was created, with the supply being reduced via burns to incentivize holding it.

While you can’t mine BNB, you can trade it on marketplaces like LocalCoinSwap or other more centralized exchange alternatives.

The Best BNB Wallets Include

  • LocalCoinSwap (non-custodial BNB wallet)
  • MetaMask
  • Trust Wallet
  • Binance Chain Wallet
  • SafePal
  • Math Wallet

How to Buy the BNB?

If you’re looking to buy BNB, there’s a range of exchanges that support it for trading. Unfortunately, many of the exchanges that support BNB trading are centralized and only offer custodial trading and wallets. However, alternatively, you can exchange BNB using full non-custodial trading and wallets on LocalCoinSwap. What is Non-Custodial BNB Trading? Non-custodial BNB trading enables you to leverage the power of P2P trading without trusting the platform to hold your funds. Using the non-custodial BNB wallets ensures that only you have control over your private keys. P2P trading is an excellent way to buy or sell BNB as you have access to a massive range of payment options!

When performing non-custodial BNB trades, you are interacting with smart contracts that enable the crypto to be escrowed so that you may trade safely with other traders from around the world. While P2P trading has been around since the early days of crypto, only in recent years has non-custodial trading become more accessible with our own LocalCoinSwap, making it easy, inexpensive, and fast to trade BNB with hundreds of payment methods.

Conclusions

BNB offers fantastic opportunities to explore blockchain technology without breaking the bank performing a few transactions. Also, with an increasingly diverse community of projects and tokens launching on BSC, BNB is becoming more useful for those looking to explore the latest opportunities on BNB Smart Chain (BSC).

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