One of the world’s most known cryptocurrencies, Binance Coin, ranks among the leading coins that investors of all sizes and walks of life add to their portfolios. Looking at the current BNB coin price prediction, it’s safe to say that the asset has quite a promising future ahead of it.
Nevertheless, some notions and ideas are still mistakenly used interchangeably, with a great example being the BNB Coin, BNB Chain, and Binance. Altcoins are a relatively new concept, especially when compared to the old-stager Bitcoin, with decentralization vs. centralization matters ranking among the most widespread inquiries.
BNB Chain is decentralized despite Binance’s apparent centralized nature. What does this mean, and why would the distinction matter?
Which one does what? Clearing out the waters
Numerous people seeking to dabble with crypto for more power over their money and financial freedom resort to BNB coin, one of the top five cryptos by market cap. However, they often find themselves puzzled over the difference between BNB Chain, BNB Coin, and Binance’s platform, to name a few of the topics of inquiry.
Because of the general newness of the crypto cohort that followed after Bitcoin, alternative coins that don’t represent the flagship crypto still fight to find their footing among the crowds.
It’s helpful to recall the study that exclaims that public trust strengthens digital currency, for without it, the coin is bound to fail.
BNB is a great example of development that can be used in multiple ways to ensure massive public trust and longevity. In layman’s terms, BNB is a cryptocurrency released by one of the largest crypto exchanges worldwide—Binance.
The coin was initially named “Binance Coin” and despite having been rebranded as “BNB”, short for “Build And Build”, some may still use its original designation. BNB is the coin fueling the BNB Chain network and can be used to purchase, trade, and sell the asset as you would with any other cryptocurrency. The distinction is that it brings about a slate of several use cases.
A retrospective since 2017
BNB was first issued on the Ethereum network’s ERC-20 token standard – the foundation for building tokens on the VM and blockchain.
Since its inception as a token in 2017, the asset has developed into a stable currency with individual and exclusive feats. It’s important to note that coins and tokens are different fish kettles. BNB was built as a token through an ICO, short for Initial Coin Offering, in an attempt to gross capital for the underlying exchange.
Fast-forward to the launch of the blockchain, and BNB became BNB Chain’s native coin, giving way to three adaptations of the asset. On top of everything, BNB is an investment in its truest form, too.
Investing in BNB
Regarding BNB’s functionality as an investment venture, investors must acknowledge its scarcity. The asset has been developed with an in-built auto-burn mechanism structure aimed at regulating its supply in a similar way that Bitcoin does.
Nevertheless, this works as a coin control rather than a limitation since it keeps the BNB stock in check to guarantee its long-term worthiness.
Simply put, BNB is the BNB Chain’s native cryptocurrency, hence the multiple advantages it brings when employed within the parent network. Some previous upgrades improved its use cases substantially and fostered an even more promising future for the asset.
BNB and BNB Chain
To inquire about the essence of the Binance coin, two notions must be dissected: BNB Chain and Binance. These two concepts may have begun as inseparable bedfellows, but they morphed into distinct ideas over time.
Binance has some of the lowest fees for crypto-based activities worldwide and ranks among the top platforms in terms of user numbers and exchange prominence. As you may have probably guessed, it allows you to purchase, sell, and trade crypto, offering some extra bonus aimed at helping enhance your knowledge, such as blogs.
BNB Chain, on the other hand, is easily debunkable. It’s a distributed blockchain ecosystem that facilitates businesses’ entrance into Web3 blockchain tech and helps devs create decentralized apps.
The network’s decentralized nature translates to zero go-betweens taking charge of the activities unfolding there. Tech developments ensure transactions’ protection, meaning that go-betweens are replaced by smart contracts.
Evidently, BNB is essential in the Binance ecosystem, and multiple advantages extend beyond trading, possibly contributing to the system’s growth as the network’s mainstreamness increases.
At the moment, BNB Chain is establishing itself as a chain-built ecosystem whose decentralization, open-sourcing, and community-oriented nature recommend it as one of the best blockchains to date, not only the leading one of Binance.
DEXs and CEXs
Long story short, Binance is a centralized exchange, whereas the BNB Chain blockchain is the opposite. The latter may be Binance’s brainchild, but it works entirely independently of it. CEXs, short for centralized exchanges, are user-friendly platforms that facilitate cryptocurrency transactions between utilizers, in turn for account set-up and identity confirmation.
On the other hand, while decentralized exchanges (DEXs) may seem slightly more dumbfounding, seeing them as apps built on smart contracts that rely on liquidity to work without stopping is helpful. These don’t necessitate user registration to be used – you just have to own some crypto in your digital wallet.
Explaining BNB Chain and Binance boils down to understanding the differences between the two concepts. As already stated, BNB cryptos are employed in these two places alike.
Why we need to make a case for PancakeSwap
PancakeSwap is a great development based on the Binance Smart Chain thanks to its decentralized nature and similarities with Ethereum-built SushiSwap. It’s a decentralized exchange that grants complete control of the crypto to the user without requesting registration or anything else besides a wallet.
Understanding BNB becomes easier once you familiarize yourself with the PancakeSwap. The asset is tied to the service and allows you to choose the chain as the top-choice network.
This exchange platform uses the AMM model, removing the necessity for go-betweens to enable trading. It’s a somewhat safe choice for DeFi activities and trading on the BNB Chain, but it opens the door to some risks, like scams and smart contract glitches.
As with anything else offered online, it’s important to do your research well before using any platform or app. Hopefully, this rundown has demystified some of your most burning curiosities.
