I'm entirely new to blockchain and crypto space; have been introduced to blockchain a couple months back and got intrigued by potential of the revolutionary technology and trying to understand the mechanism behind all this. I've been studying about it as much as I can. Mining and and investing make the crypto arena even more exciting. Speaking of investing, I invest only on things that have utility value; just purchased 25 SBD in order to promote my very first post. Last few weeks in the crypto market taught a lot, and I assume some of the experiences deserve to written down for my own reference even if they're gibberish to others. It'd be wonderful if at one other user finds my experiences interesting/useful. Interaction with community seems rewarding; below is my first ever reddit post. I see Steemit is an excellent platform for sharing and got tempted to share the post here.

Binance cryptocurrency exchange

Binance.com launched on August 14th, 11 days after its ICO which raised $15m, is on its way to become the premiere NEO based ICO platform, especially in China. In roughly two months, I believe it ranked once coinmarketcap.com top 10 exchanges by 24 hour volume. The futuristic exchange received VC funding from Blackhole Capital and Funcity Capital. I'm a b-schooler with fin/econ focus, so I have been forced to learn that fundamentals matter in the long run. For the same reason, I'm a big NEO fan as well and have a few NEOs. I looked at CZ led Binance team and Binance's business model. The team have excellent track record having affiliation with industry leaders. Entirely new to crytospace, I went all in pretty much at much higher than current price. I don't regret cancelling my sell order at 69k sats; not because I believe BNB will rise, but because I learnt about markets. I witnessed Binance team strategically handling this current Chinese bitcoin/bitcoin exchanges/ICOs ban news/FUDs. That's another story. Binance is the first community I'm kind of active and this happens to be my first post. This is a just a summary of what I found elsewhere (see references official stats announcement):

Binance as a business

Total supply is 200M. 20% of Binance.com's quarterly profits will be used to buy-and-destroy BNB tokens, eventually leaving 100M in constant circulation. Binance's already lower than industry average (0.2%) trading fees reduce to only 0.05% when paid in BNB. It's one of the rarest tokens that provides real-life utility. This is their discounted fee schedule:

Forget about BNB's plan to build a decentralized exchange in which BNB will be paid as GAS. For now I try to estimate, or guesstimate or yet better, daydream about BNB's actual demand in coming years. Assume a risk-premium (amount above valuation) though, for BNB might actually be the fuel of the planet's most powerful decentralized exchange.

Assumptions and valuation

Statisticians assume a lot of things, usually in their favor. I'm too assuming things about BNB:

• 24h volume now 15k BTC. I'm being optimistic and ignoring current slowdown (to 9k BTC) due Chinese ICO related news/FUDs. I'm not sure if BNB actually hit top ten exchanges, documented highest it reached is #12 with ~15k BTC.
• A steady 0.5% weekly increase in volume which seems likely based on how Binance is growing. It currently lists only a select few coins/tokens. Volume will increase as more coins are added. Cryptospace in genereal is increasing. So 15k daily trade, which increases 0.5% weekly for four years (~400 weeks). The volume sure will have at some point have an upper bound, but Initial burst will be more than 0.5%. So things balance out.

15000 * (1.005^400) = ~110k

Only Bittrex and Bitfinex have crossed that 100k+ daily volume milestone. Binance has to be of course one of the be global leaders and and ahead of OKcoin.cn, in order for the valuation to hold. It seems daunting, but I think is possible. For the sake of simplicity, I shamelessly generalized calculations and used round numbers. Since BNB provides utility entitling users to pay discounted fees, any rational user would grab the opportunity. I hope Binance has a 50k BTC daily volume, on average, in the next four years. Though discount will be decreasing over time, I assume only 0.005% fees in the entire period. The calculation does not include demands for deposits/withdrawals/listings/ICOs that will use Binance platform.

trading_fees * volume * days / total_supply = price/BNB
0.0005 * 50000 * 1500 / 200000000 = 0.0001875

BNB is valued at roughly 37500 BTC (~150M USD), putting BNB at ~ $0.7. This is probably an undervaluation. See notes.

Notes

• Being traded in only one exchange, it bears whale manipulation impact (-). In the long run real users will take control of the market, I hope.
• Calculation didn't take into account 100M BNB buy-backs (+)
• Calculation ignored demands for BNB other than trading fees (+)
• Possibility of owning a piece of first real, user-friendly, bug-free decentralized exchange in the ever growing decentralized world hasn't been considered (+)
• Whatever BNB residual value (after four years) is, jokingly though, is zero in the calculation (+)

References

https://www.binance.com/resources/ico/Binance_WhitePaper_en.pdf
https://www.linkedin.com/pulse/binancecom-ico-experience-lessons-advices-changpeng-zhao?articleId=6287572792573599744
http://www.newsbtc.com/2017/09/03/binance-raises-vc-investment/
https://www.alexa.com/siteinfo/binance.com
https://coinmarketcap.com/exchanges/volume/24-hour/all/
https://binance.zendesk.com/hc/en-us/articles/115001292531-Binance-com-Stats-2017-8-27
https://bitcointalk.org/index.php?topic=2080842.0
https://www.reddit.com/r/binance/

To BNB team

Congrats! You've smartly handled this recent tsunami, which unfortunately happened to be just when you started. Take it as an opportunity and prove that YES, IT'S POSSIBLE. BNB's success depends on your success.

I do not follow by follow-for-follow idea. I'll follow if your posts deliver stuff; doesn't matter whether I'm followed or not.