Ethereum (ETH) came out as one of the most revolutionary projects in the history of cryptocurrencies. It shifted the attention of crypto developers to the blockchain, ushering in the era of smart contracts and dApps. Despite being a pioneer in this regard, Ethereum is not keeping up with the rapid development of the crypto sector and the competition is not only getting fiercer, but also more advanced.
Ethereum has already dealt with numerous ‘Ethereum Killers’ so far, and none of them have managed to get the job done. However, with the recent launch of Binance Chain, things could change for the world’s second largest coin. Not only does it have the potential to beat Ethereum as a platform, but also its native Binance Coin (BNB) can also beat Ethereum’s ETH, or at least seriously hurt the price.
Why is Binance Chain a threat to Ethereum?
Ethereum has been around for years now and during this time it has managed to establish itself in the crypto industry quite well. It is and will always be second to Bitcoin, but the question is – whether Bitcoin will be the only currency above it.
As mentioned, ETH has already survived countless Ethereum Killers, so what threat could the newly launched Binance Chain pose? Well, Binance Chain is unlike any of the other enemies Ethereum should have faced so far. It was launched by one of the world’s largest, most popular and trusted exchanges. It already has its own currency, which is already extremely popular, useful and trusted.
Not only that, but the new blockchain appears to be faster and at a much lower cost. Today, countless developers who have worked on Ethereum have to make a choice – whether to continue to Binance Chain or remain loyal to Ethereum. Some will likely choose to stay as Ethereum offers a pretty good deal in terms of liquidity, and the Ethereum 2.0 version can make the network much more scalable.
But even with all this advancement, Ethereum still has to work hard to achieve something that Binance Chain already offers as standard. Binance Chain will even have its own DEX.
On the other hand, the CEO of Binance, Changpeng Zhao, made a big point when he stated that Binance Chain has no smart contracts and that it will mainly serve as a trading platform. This is great news for ETH as smart contracts are the specialty of this project. Simply put, the two projects will focus on completely different things, and they may never collide.
Binance’s goal is to contribute to the creation of a fully decentralized cryptocurrency ecosystem – something that has been virtually impossible until now due to highly centralized crypto exchanges. Of course there were DEXs before Binance DEX, but none of them ever enjoyed the popularity and trust of Binance or are more than 10 million users. While there have been some conversations about developers who may be asking for smart contract implementation on Binance DEX, Ethereum is still safe at this point.
Will Binance Coin Outperform ETH?
Binance Coin has been around for a while, but it got really popular in early 2019. While it has given traders and investors a significant discount on Binance since it launched, it only gained more exposure with the return of Binance Launchpad. This is a platform that has revolutionized token sales and inspired a new model: IEO (Initial Exchange Offering). The importance of BNB is that it is the only coin that can be used for the purchase of new tokens, leading many to buy them in large quantities in 2019.
As a result, BNB outperformed pretty much every other cryptocurrency, it more than tripled its own price in just a few months, and it disconnected itself from Bitcoin, being the only coin to do it successfully so far.
It’s unlikely, of course, that BNB will outperform Ethereum, neither in market cap, nor position, at least for a long, long time. However, there is no denying that BNB has been steadily rising for a while now, and it has actual use cases that are more than appealing to investors and traders around the world.
The DEX will grow it even further, and it wouldn’t be surprising if the currency were to rise in the following days.
Even with all of that in BNB’s favor, many believe it will never outperform ETH simply because Ethereum is truly decentralized. It may be old and outdated, it can be slow and it can take time to develop, but it is completely decentralized. This is not something many would say for Binance DEX, at least not at this point. With all that in mind, BNB is unlikely to severely damage Ethereum in any way for the foreseeable future, and even if some developers move to Binance Chain, much of the community will likely remain.
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Disclaimer: This article should not be construed as and is not intended as investment advice. Global Coin Report and / or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and may or may not have a portion of the coins or tokens they cover from time to time. Please do your own thorough research before investing in any cryptocurrency and read us in full disclaimer.
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