How to buy Binance Coin (BNB) – A Beginner’s Guide
Last updated: 2/26/19
Ever since its ICO, Binance has shown meteoric growth. As a result, Binance Coin (BNB) – its token, appreciated in value as well. In this post I’ll give a brief overview of what BNB is and where you can buy it online.
Here’s how to buy Binance Coin:
- Get a Binance coin wallet (Ledger, Coinomi).
- Go to Binance and buy the coin with another crypto or credit card.
- Withdraw your coins (or leave them on Binance if you plan on using them)
For investment purposes only you can use eToro and skip all three steps.
If you want a more detailed review of Binance Coin and how to buy it, keep on reading. Here’s what I’ll cover:
- What is Binance Coin?
- Buying Binance Coin in 3 Steps
On July 2017, Binance conducted an ICO in order to raise funds for its cryptocurrency exchange operation. The token issued as part of the ICO was called Binance Coin (BNB) and it was priced at $0.1 per 1 BNB. Since then, BNB has greatly appreciate in price and Binance’s ICO was considered one of the more successful ICOs around.
BNB is basically an ERC-20 token (i.e. a token on the Ethereum network) that is accepted as payment on Binance for trading fees. By using BNB you also get a discount on the fees themselves (up until 2021).
There’s a total of 200 million BNB tokens with the distribution as follows;
- 100 million tokens (50%) were assigned for the ICO
- 80 million (40%) belong to the founding team
- 20 million (10%) were reserved for Angel investors.
In order to maintain the token’s value and make it somewhat deflationary, Binance plans to use 20% of the company’s profit each quarter to buy back BNB tokens until only 100 million BNB will remain on the market. It will then destroy the 100 million BNB they purchased.
In the future, Binance will build a decentralized exchange, where BNB will be used as one of the key assets, and as gas to be spent.
Assuming you’re looking to buy and hold BNB, it’s important you have a wallet to store it in. Since Binance Coin is basically an Ethereum token, many wallets support it.
Ledger hardware wallets – Allow you to safely store BNB as well as a variety of other altcoins. The wallet is basically a piece of hardware that keeps the private keys for your coins offline, making it one of the most secure wallets around. There are two main models – the Nano S and Nano X. The Nano X is the newer model with the ability to control the wallet from your mobile phone as well as from your desktop. You can read my Ledger Nano X review here.
TREZOR hardware wallets – Similar to Ledger wallets, TREZOR wallets allow you to store coins offline on a hardware device. The two main wallets offered are TREZOR One and TREZOR Model T. The Model T is the newer, more advanced wallet with a built in touch screen. Nevertheless, both wallets are extremely good. Here’s my TREZOR Model T review.
Binance’s exchange – Normally we advise against keeping coins on an exchange. However, if you’re planning to use BNB to save on Binance fees and you don’t own a large amount, it might be most cost efficient to just keep it on the exchange. Keep in mind that if this is the case, you’re giving away control over your coins to Binance.
Coinomi – If you’re looking for a mobile solution, Coinomi is another established cryptocurrency wallet that will allow you to hold BNB. There’s an Android and iOS version available, as well as a desktop version.
Once you have your wallet you will need to locate your Binance Coin address. Since BNB is an Ethereum token, its address will look like an Ethereum address i.e. a long string of letters and numbers starting with 0x. Here’s an example:
Binance – Of course the most obvious choice to buy BNB would be Binance. You can buy Binance Coin with every asset that Binance supports (which is a lot), or you can pay with a credit card – for a higher fee.
eToro – If you’re just looking to invest in Binance Coin and don’t need the actual coin for its utility, you may want to check out eToro. Through eToro you can invest in the coin with a variety of traditional payment methods and low fees. Keep in mind you won’t have access to the actual coin.
Be advised – cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Keep in mind that your capital is at risk.
Usually we advise withdrawing the coins you just bought into your own wallet. However, if you plan on using your coins to save on Binance fees, it’s probably best to leave some on the exchange itself.
If you own a large amount or bought the coins for investment purposes only, move the coin off the exchange and into the wallet you chose on step 1, so that you will have full control over them.
As Binance grows in popularity, BNB will probably appreciate as well. Unlike most other “utility tokens” out there, BNB gives real value to Binance users in the form of saving on trading fees. Even if you don’t think BNB has a bright future ahead of it, you might still find some value in it through the discounted fees it offers.
If Binance truly comes through with its plans for building a decentralized exchange, BNB might see renewed interest and an additional surge in its value.
What’s your opinion of Binance Coin? Let me know in the comments section below.
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