Exactly a year ago “Binance Coin” was priced slightly above $6. At the time of writing this cryptocurrency has recently peaked at $632.53 which means it has appreciated a whopping 10433.3% in a year. Needless to say, most cryptocurrencies in circulation, despite their volatility, have been gaining a lot of value due to billions of institutional money coming into the industry, mass adoption, and the power of social media. Binance Coin sits at the #3 spot on Coin Market Cap, which ranks all cryptos in circulation by their current market capitalization. The case of Binance coin is quite different from many others in the sense that it represents the financial strength of Binance.
According to coinmarketcap.com Binance was launched in July 2017, is one of the biggest cryptocurrency exchanges globally. By aiming to bring cryptocurrency exchanges to the forefront of financial activity globally. The idea behind Binance’s name is to show this new paradigm in global finance — Binary Finance, or Binance.
Aside from being the largest cryptocurrency exchange globally, Binance has launched a whole ecosystem of functionalities for its users. The Binance network includes the Binance Chain, Academy, Trusted Wallet and Research projects, which all employ the powers of blockchain technology to bring new-age finance to the world. Binance Coin is an integral part of the successful functioning of many of the Binance sub-projects.
BNB, as Binance Coin is denoted, was built on the Ethereum blockchain network and it will issue a total of 200 million BNB coins. The coin was launched through an ICO (Initial Public Offering) and the proceeds have been used to empower the trading platform, finance its projects, and for marketing efforts.
One of the ingenious purposes that BNB was used by Binance to spur its growth was to give users a 50% trade discount when using it to pay for listing fees, exchanges fees, trading fees and any other charges that a user may incur on the exchange. However, the discount is schedule to end after the fifth year of a user joining the platform. Binance coin has a lot of financial and strategic backing within their ecosystem. It can be used to invest in different blockchain protocols that the company is developing. It also is a great investment, as this platform has millions of daily retail and institutions traders and it has more than 150 cryptocurrencies available for trading. Kind of hard to bet against the largest exchange in the world in an industry that still in its nascent form.
Binance Launchpad also hosts new token sales where you can use your BNB tokens to purchase a stake in a new and upcoming currency. Later on, these new digital currencies are added to the Binance exchange where you can trade them as well providing a complete and seamless experience.
Changpeng Zhao, the founder of Binance, had the right idea when launching a crypto coin to speed up the growth of its crypto platform. Obviously, this makes perfect sense today, but most of the 300 crypto exchanges in operation do not have a coin, and if they do, they are by far not as successful.
We will start to see other companies, large and small, attempting to launch their own cryptocurrency. Facebook faced many banking hurdles a couple of years ago, when trying to launch “Libra,” their first cryptocurrency iteration. Now, they are in the process of launching “Diem,” a new and improved permissioned blockchain-based payment system that can be used by their more than 2.7 billion active users. With the crypto mass adoption and crypto awareness that we are witnessing, the launch of cryptocurrencies by traditional companies is closer than we think. As we discussed in previous posts, the CBDC (Central Bank Digital Currency) is planning the release of many blockchain cryptocurrencies that are regulated by a central bank. Large private banks are studying and monitoring the industry and finding out how their own blockchain currency can fit the present monetary system. There are many companies or industries that could benefit from having their own crypto. Below are only a few that I can quickly think of.
Industries or companies that could have a successful cryptocurrency:
Airlines: The already have a very successful point system structure. This same idea can be attached to a crypto that could have speculative investment value and perhaps even help finance some of their projects.
Credit Cards: They are already a banking system that charges hefty fees. The integration could be seamless.
Walmart: Their loyalty program can be attached to earning crypto for purchases and perhaps they can incentivize their work force by giving them crypto instead / or on top of stock options.
Apple: Perhaps the company with most loyal based customers, apple also has a credit card and apple pay, which is used by millions on a daily basis. Seems that it could be a no brainer for apple to release a cryptocurrency to keep their ecosystem tighter and increase the velocity of payments within their network.
Cell Phone companies: Companies like Verizon and At&t have so much data and meta data about all its users that, unfortunately, could be used to benefit them if they ever release a crypto.
Just like the case of Facebook that has faced a lot backlash and resistance against their crypto currency efforts, I do not think that certain companies should be allowed to release their own crypto, since it will defeat the purpose of what democratic and decentralized coins are all about. But we must be aware that corporations may be thinking about it and planning accordingly.