Blockchain. Cryptocurrency. Digital coins. Words which once had no meaning are now widely understood by the masses. By 2024, it is widely predicted that the blockchain market will reach a staggering value of $3 trillion! The fact that almost 90% of North American banks are now investing in the technology showcases its potential.
When it comes to cryptocurrency, Binance is considered to be one of the most popular exchanges available.
What does Binance offer?
The reason Binance is widely known is that it is the largest exchange available regarding exchange volume. Along with being an exchange, it also functions as a wallet. Considering its low transaction fee, it has managed to be the top exchange for trading altcoins, and as of 2018, it has achieved the same title for Bitcoin as well.
The platform delivers a variety of altcoins. It also has a global reach, thereby being an accessible exchange for all crypto enthusiasts. The platform offers various benefits that other similar exchanges don’t. For instance, crypto users get GAS if they hold NEO using Binance. When you add this to the referral program offered by the exchange, it is easy to understand why Binance has managed to gain a stronghold on the crypto market.
If you thought that Binance couldn’t further improve its offering, you are in for a treat. The CEO of the platform has released a statement on March 13th and announced that it would be launching its Blockchain soon!
Binance’s Blockchain announcement
If you were to ask Binance what its vision is, the company officials will tell you that they wished for a future where decentralized as well as centralized exchanges could co-exist. This is why Binance was created to help in trading and transferring digital assets. While the current operations of the company limited it to being just another exchange, the announcement that Binance is launching its own blockchain is bound to transform it into a community.
The move towards Binance’s own blockchain was revealed via an official statement by the CEO. The official statement released reflected Binance’s dissatisfaction with the correct decentralized frameworks. The masterminds behind the platform believe that they can significantly improve the structure to deliver a better trading experience to its users.
Previously, in a private event held in Singapore called “Decrypting Blockchain for Business,” the CEO of Binance, Mr. Zhao revealed his vision and intention regarding the crypto world. Mr. Zhao is a firm believer that the crypto space hasn’t reached its peak. Instead, it is only the start of blockchain development. As per his speech in the Singapore conference, he thinks that there is a real possibility for millions of other crypto coins as well as thousands of blockchain frameworks to be developed.
The event where the blockchain announcement was made was attended by wealthy Asians since it was organized to aid the influential Asians to understand the blockchain and crypto world.
What Binance’s blockchain will offer?
As per recent updates, crypto enthusiasts can expect the following features to be added to the new blockchain being launched by Binance:
- A new interface, with a focus on better UX and UI
- A revamped digital wallet
- A block time of one second between transactions
- Autonomy to users regarding the control of their funds
Just like the present decentralized blockchain frameworks, Binance’s DEX is likely to receive a favorable response from users. After all, the framework being proposed is expected to deliver better transparency than before. While traditional exchange platforms have a centralized database, Binance would now be able to provide better security owing to its move to DEX.
One of the major issues that many think Binance will face is regarding liquidity and volume. This is the case with most decentralized exchanges. However, since Binance has already succeeded in attracting high volume trades so far, the chances are it won’t have to worry about this aspect.
Why is Binance making a move?
There has been a lot of talk about why the most popular exchange is expanding into a new realm. While blockchain technology is heavily linked with the operations of Binance, the fact remains that it previously worked as an exchange and hence had not dealt with blockchain formation per se.
If you read between the lines of the official statement released by the platform, it seems that the move towards launching its own blockchain is to ensure that the Binance becomes a platform rather than a company. By having a blockchain, Binance is inviting other people to participate in the process, thereby making Binance bigger than a mere company.
How will the decentralized system compete with the currently centralized exchanges?
Mr. Zhao also made a point to address the underlying question of how the new decentralized exchange will compete with the current exchanges in the market. He believes that the proposed decentralized system would be a much safer alternative than the existing framework. The fact that Binance hasn’t once been hacked since its inception in 2017 gives meat to his claim.
He also stressed over the benefits of using a decentralized system over a centralized one. Since a decentralized blockchain framework is likely to offer control to users, it delivers much more freedom than centralized options. As more and more people realize how crucial this perk is, as per him, the adoption towards DEX will slowly follow suit.
New Coins and ICOs are likely to benefit
A lot of people were of the view that the new system might not work with the current system. However, recently the CEO of Binance, Mr. Changpend Zhao cleared all such misconceptions. According to him, the new blockchain system will adhere to the vision of the company and will complement the current exchange platform.
The decentralized exchange will work in two ways. It will act as a facilitator for digital assets. Apart from this, it will be the bridge for new coins as well as ICOs. Whether or not the users will hop onto the idea of a new blockchain is something that only time will tell. However, one must note that Binance has succeeded in gaining a positive reputation over time. Its users trust it, ever since it was able to handle the Viacoin drastic fluctuation with immense ease. Considering that the new decentralized system is likely to benefit new ICOs and coins alike, it is safe to predict that this news is bound to fare well with crypto enthusiasts.
Impact of the announcement
As soon as the announcement was officially made, the Binance coin (BNB) witnesses a dip of approximately 14% against USD. A day after the announcement, it was being traded at 5.54 while previously it had a high value of 6.67.
What does this drop signify?
Well, it doesn’t necessarily have to be ominous. It is common for the value of currencies to take a dip when something big happens. And the fact that a new blockchain system is being developed is surely a big enough news to cause disruption.
However, the fact that the dip was quite deep may seem troubling to some. This is mainly because BNB was on an uptrend till recently and the drop is something that the currency would have to overcome in due time.
It is too soon to comment on whether the new blockchain system will succeed. However, whatever happens, it has surely caused a ripple in the crypto world.