Pros And Cons Of Binance Coin In 2021
Is Binance Coin Worth Buying?
- Biggest pro: Attached to the largest and most popular cryptocurrency exchange, where it is used as a discount token.
- Biggest con: 80% of tokens are owned by the exchange making it extremely centralised.
Currently trading at around $370 Binance Coin, which trades under ticker symbol BNB, is the fifth-largest cryptocurrency with a market capitalisation of 61 billion. At the time of writing, BNB has a $1.5 billion 24-hour trading volume.
So far, BNB has been one of the best performing coins of 2021 and some believe this is just the beginning.
What Is Binance Coin?
Binance Coin was created in 2017 as a discount token on the Binance Exchange, and more recently it acts as fuel for the Binance Smart Chain, the smart contracts platform.
Using Binance Coin at the Binance Exchange traders can get a 25% discount on trading fees. It also makes transactions at the Binance Exchange smoother too.
In 2020, Binance Coin got its second major use case - the Binance Smart Chain (BSC).
The BSC works parallel to the Binance Chain (BNB’s primary blockchain) and supports more complex transactions allowing dApps and DeFi applications to bebuilt on top.
Binance Coin is a proof of stake coin and so traders can also earn by staking BNB tokens too.
What Are The Advantages Of Binance Coin?
Being attached to the largest cryptocurrency exchange in the world - the Binance Exchange - is a huge benefit for BNB.
It means they have some of the best resources to develop the coin for whatever they want it to do. Plus, they can react to changes in the market much faster than others.
Binance Coin also has some of the best use cases in cryptocurrency, offering a great level of useability that other coins don’t have yet.
For one, the Binance Visa Card could greatly increase BNB adoption as it converts BNB into fiat when used for payments. This effectively makes BNB useful almost everywhere.
Perhaps the best advantage these days is that Binance Coin is a cheaper alternative to Ethereum. As Ethereum fees spiked in February 2021, many devs switched to the BSC.
What Are The Disadvantages Of Binance Coin?
The biggest disadvantage to Binance Coin is that supposedly 80% of tokens are owned by the exchange.
This means that Binance Coin is incredibly centralised. With this many tokens, they can pick who can be a validator on their blockchain. Arguably, this is far too much control over the cryptocurrency.
In the future, the Binance Exchange’s days could be numbered with the rise of DEXs. DEXs are decentralised exchanges, they cut out the middleman and link up buyers and sellers directly.
Uniswap is perhaps one of the best examples of a DEX that is growing very fast.
However, when exactly the Binance Exchange could get eaten up by DEXs is unknown. It could even be years from now. Nevertheless, it is something that traders need to keep in mind.
So, to conclude, Binance Coin’s biggest issue is with centralisation, in more ways than one.
Binance Coin Buy Or Sell?
Right now is the perfect time to buy Binance Coin because the market is down and it’s not BNB’s fault. Further to that, remember that BNB is still trading at a much higher price than it was at the beginning of 2021.
The recent news that China will crack down on cryptocurrency comes not too long after Tesla dropped BTC. Since then, the market has plummeted. It looks scary but it’s beautiful because it’s now much easier to get into the crypto market.
Many crypto forecasters predict that the market will recover and may even plough on to newer heights. And it is at moments like these where they buy as much as they can before it shoots back up.
Binance Coin has shown us it has an incredible opportunity to rise exponentially. The Binance Exchange is not likely to fall apart any time soon, and the BSC is the second-largest DeFi platform in terms of the number of projects.
So, if anything, Binance Coin only stands to gain in 2021. But in the end, the decision is yours. If you think the pros outweigh the cons, then it is definitely a buy.
Check Out: Why Binance Coin Will Skyrocket
Where Can I Buy Binance Coin?
In four steps you can buy Binance Coin with eToro, a top-rated and trustworthy crypto broker.
Step 1. Register with eToro. Go to eToro’s site and click ‘Join Now’ and fill out the registration form.
Step 2. KYC. Here you will need to upload some proof of identity and address. This is to prevent fraud and money laundering.
Step 3. Deposit funds into your account. For most countries, the minimum deposit is $200, in the US, the minimum deposit is $50. However, there are several countries where the deposit is considerably higher, and so please check this before signing up.
Step 4. Buy Binance Coin. Navigate to ‘Trade Markets’ then to ‘Crypto’ and then click on BNB (Binance Coin). You will then be able to choose the conditions in how you buy BNB.
And now you have Binance Coin!
eToro – Best Exchange to Buy Binance Coin BNB
eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
- BNB is the third-largest cryptocurrency with a market capitalisation of 61 billion. In 2021, it is one of the best performing coins.
- Was created in 2017 as a discount token on the Binance Exchange. More recently it powers the Binance Smart Chain.
- Binance Coin benefits greatly from the Binance Exchange, which is the largest cryptocurrency exchange in the world.
- The Binance Smart Chain benefited immensely when Ethereum transaction fees spiked in February 2021. It is now seen by many as a viable alternative for smart contracts.
- Approximately 80% of BNB tokens are owned by the exchange, making it heavily centralised.
- In the future, decentralised exchanges could be a major threat to the Binance Exchange.
- You can buy Binance Coin easily on eToro, a top-rated and trustworthy exchange.