The future of the crypto industry

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The cryptocurrency and blockchain industries often abound with new ideas and concepts, ranging from NFTs to DeFi. Even complete neophytes already realize that space itself is far greater than the sum of its parts. Yet the value of a project is often perceived through its price alone, while its other benefits are overlooked or misunderstood.

Binance Coin (BNB), the symbol that drives Binance’s Smart Chain, is one such example: often compared to ETH, because the two currencies serve a similar purpose, it is often considered inferior due to its reasonable position under Ethereum in terms of market value. . To understand whether this comparison is justified at all, let us review the similarities and differences between the two.

Ecosystem

ETH operates the Ethereum ecosystem, which consists of many different projects built by its platform, mostly during the ICO boom in the years 2017-2018. According to “State of the DApps”, most out of about 2700 dapps are gaming, followed by betting dapps, while finance comes in third place.

BNBs, on the other hand, have two different ecosystems: one in centralized finance (CeFi), in the Binance cryptocurrency exchange and one in decentralized finance (DeFi), as a native symbol of the Binance Smart Chain.

Number of corners

Currently, there are over 115 million ETH in circulation. This figure can theoretically continue to increase: the amount of coins in circulation has no fixed limit, but an annual ceiling of 18 million ETH, or a quarter of the original supply. This leads to all sorts of different options in terms of price changes, primarily due to supply and demand.

When it comes to BNB, there are currently over 154 million coins in circulation. When the coin was launched, Binance promised to burn a total of 100 million BNB, about half of the supply, to facilitate a corresponding increase in the price of the token. While the team expects that it will take decades at this rate to complete the coin burning, they are looking for ways to accelerate this destruction so that it can benefit BNB holders.

Community

When we talk about holders, the largest holders of ETH – with millions of coins in their accounts – tend to be large, well-funded projects, ranging from the Ethereum Foundation itself to projects like Tether. Ethereum has a vibrant community of over 140 million unique addresses, but it may not be as involved in the network as enterprise-sized projects and teams can be.

On the other hand, a quick look at the data on Etherscan shows that while the majority of tokens are in Binance-owned wallets, the rest are scattered among likely unrelated addresses. The same site says there are about 315,000 BNB holders; although this figure is much lower than ETHs, the fairer distribution indicates a more democratized society.

Public channel

Ethereum is currently moving from a Proof of Work consensus algorithm to Proof of Stake to make the network greener, faster, more scalable and to offset the infamous Difficulty Bomb. This term refers to the increasing difficulty of the mining algorithm, where miners will take longer and longer to solve increasingly complex puzzles, resulting in a large delay between the blocks – which is the so-called Ethereum Ice Age, which is a time when the network is full transition from PoW to PoS is expected. This is a way to deter miners so that the PoW version does not branch out from the Ethereum network.

Binance Smart Chain has no such issues. Designed from scratch to enable faster transactions and lower fees than offered by Ethereum, it is also compatible with Ethereum for users who want to enjoy both worlds. It uses the Tendermint BFT consensus, which is often used as the basis for modern versions of PoS, which means that it is not nearly as computationally heavy as any PoW system.

Use cases & Adoption

The Ethereum Virtual Machine is a full Turing machine, which means that pretty much anything can run on it (if you try hard enough). Currently, most of its use cases are about dapps and DeFi. As already mentioned, the former is inundated with gambling and betting, while the latter is still finding its feet in the face of the already established traditional economy.

Use cases for the BNB token are already largely built into its very design (instead of being left entirely to the end users). Within the ecosystem, they include payment, gas fees at BSC, staking, fundraising, earnings – but also firewood operations. On the stock exchange itself, BNB is used to pay fees, and in addition, they are also accepted as forms of payment through points of sale such as PundiX and TravelbyBit or for goods and services through Crypto.com.

Conclusion

Although ETH is a large part of the cryptocurrency industry as a whole, its use cases are critically dependent on the end users of the network. However, BNB already has many different use cases built-in integrated, but it is also very versatile: as explained by the team, “The long-term vision for BNB is to become the native token on several specific blockchains for an app.” However, BNB is intended to be used, not stored: since it is not a security (it does not represent any property in any of its original projects, nor does it mean debt), the number of these use cases is expected to seep out. into all relevant aspects of the industry. The price itself should increase, but it should also lose relevance as participants start using tokens in their ecosystems instead of as a tool for speculation.

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