![]() While Binance Chain may expand to more applications in the future, its initial 2 use cases are (1) hosting coins and (2) a decentralized exchange. According to their website, "Once we show that the infrastructure is sound enough to handle many transactions quickly, the additional features will follow." Even so, it is likely Binance will add features in the future.It is our opinion that the load is more important than the features." According to CZ (Binance's CEO), "Binance Chain is a very simple chain in terms of application, but it can handle very large loads.Instead, it has 2 main features: hosting scarce assets and exchanging scarce assets for one another.Unlike Ethereum, Binance Chain is not designed to run any program.Key Features: Binance Chain values Key Features. Along with this feature, Ethereum also allows projects to run Turing-complete programs (which, in layman's terms, is a program that can theoretically do anything).īroad Features vs.As mentioned, Ethereum makes it easy for blockchain projects to launch (such as BNB before it migrated Binance Chain).Key Features: Ethereum values Broad Features. This upgrade is huge for the cryptocurrency ecosystem, and could enable applications that were previously impossible.īroad Features vs.According to CEO Changpeng "CZ" Zhao, Binance Chain will process "a couple of thousands"transactions per second at launch. While initially less decentralized, Binance Chain compensates for this in speed and reliability.Unlike the thousands of computers that run Ethereum, Binance Chain will launch with only 11 large-scale computers (though similarly to ETH, they are paid in BNB for contributing).Performance: Binance Chain values Performance. At the moment, Ethereum can only process 15 transactions per second (to be fair, Ethereum does hope to scale this).ĭecentralization vs. While valuable, this decentralization comes at a cost.This makes it nearly impossible for a program on Ethereum to go offline. Why? Because even when one of these computers goes offline, Ethereum continues to run on the rest of the network.Because Ethereum runs on thousands of computers throughout the world (which are paid in ETH for contributing to the network), it has been called "The World Computer.".Performance: Ethereum values Decentralization. The key trade-offs are (1) Decentralization vs. ![]() While similar to Ethereum in some ways, Binance Chain introduces a much-needed performance upgrade to the crypto ecosystem that previously did not exist.ĭespite the similarities of Binance Chain and Ethereum, the primary difference is what each blockchain values.Because of this, Binance launched its own blockchain platform-Binance Chain-in April 2019 (at the same time, migrating BNB from Ethereum to Binance Chain).Despite the benefits of Ethereum, Binance also saw drawbacks.Without diving into too much detail, Ethereum made it easier for blockchain projects to launch (kinda like how Wordpress makes it easier for websites to launch without knowing HTML). To avoid re-engineering the whole thing, Binance launched BNB on the Ethereum platform in 2017. Even though this technology is valuable, it's also complex to build.If I send BNB to a friend, then I'll no longer have it. Unlike a catchy MP3 file, someone can't just duplicate their BNB and email it to a friend. It's how Binance can mint only 200 Million BNB. While people describe "blockchain" in many ways, one of its key innovations was creating true scarcity online.While theoretically giving BNB holders the same value as a dividend, it's an interesting marketing technique because the value is distributed directly into BNB instead of a fiat currency.This is similar to a dividend, but instead of paying people in fiat (how a dividend works), Binance reduces the total supply of BNB by the same value.How? Each quarter, Binance uses 20% of its profits to permanently destroy an equivalent amount of BNB (through a built-in "self-destruct" feature of BNB).While the 200 million BNB supply can never increase, it can (and will) decrease. 20 Million BNB. For Binance's angel investors.80 Million BNB. For Binance's team-with the total amount being distributed over the course of 5 years (16 million BNB per year until July 2021).100 Million BNB. For their 3-week Initial Coin Offering (ICO) in July 2017-early supporters sent Bitcoin or Ethereum to Binance in exchange for BNB (at about $0.15/BNB).Exactly 200 million BNB were created-this amount can never increase.Binance created BNB in July 2017 to fund their launch.As a quick (but insufficient) overview, Binance created a currency and called it BNB.
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