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What is the Binance Blockchain?

By March 3, 2022 May 13th, 2022 No Comments

In terms of trading volume, Binance is the largest exchange in the world. Billions of transactions happen on the Binance exchange with new and experienced traders drawn in by the lure of lower transaction fees.

If you have ever wanted to trade cryptocurrency at any level, Binance will eventually be an exchange that you consider. As with any type of investing, there are significant risks but decentralized applications on a platform with this kind of history may make your investments there even riskier.

What is Binance (BNB)

Binance BNB is how the Binance ecosystem runs. Imagine each crypto token like a subway token. You use the token to go from Point A to Point B.

In the crypto world, each of the coins is a way to be a part of the platform. You can buy, sell, or trade these coins on each platform according to the rules in place on the platform and within the coins themselves.

Binance BNB is part of the Binance chain and you buy or sell BNB on the Binance exchange or you can opt to store it in a specific wallet that is allowed to operate there.

Is Binance a Good Investment?

Binance could be a good short-term investment for high-velocity traders who like to live life on the edge and maybe more comfortable with less than secure transactions.

Binance can be considered a good investment if:

  • You time your trades correctly and use the right exchange.
  • You are using it as a short-term investment.
  • You understand all of the substantial risks that are involved including those that go beyond the typical concerns with crypto in general.

Investopedia writes that Binance was best suited for more experienced traders but did warn about the regulatory issues that are currently putting the platform in jeopardy.

You might want to hold off on investing in Binance though if:

  • You are typically more cautious with your investments.
  • You are new to the world of cryptocurrency.
  • You are concerned about the troubled history and ongoing legal issues facing the Binance platform at this time, both in the US and internationally.

Does Binance Have its Own Blockchain?

Binance does have its own blockchain. Originally, Binance did not have its own token but launched one in 2018. There is a max cap of 200 million of the Binance coin, BNB.

  • All decentralized coins or tokens have a max cap meaning that once they are all in play, there will be no more to be “found” or mined.
  • The amount of time and energy needed to solve a block and add to a blockchain can vary by the miner and set up and the coin itself.
  • The blockchain can be simplified to the term “ledger” which makes it easier to understand for the average person who is new to digital assets.

What is the Difference Between Binance and Blockchain?

There are several differences between Binance and Blockchain and they all basically come down to the meaning of their terms and what they were designed to do.

  • Binance is a trading community that offers a range of digital tokens including BNB, Bitcoin, and a few of the less easily recognized types of crypto.
  • Blockchain is most easily defined as a technological ledger meant to keep track of assets and the actions that are taken with those assets.
  • The term blockchain is used because each transaction is part of a chain of other transactions that occur.

The language used in the crypto world can be bewildering at first but once you get the general idea of the terms and what they mean, it becomes far more easy to understand.

Final Thoughts on the Binance Blockchain

Currently, there are some major clouds that are hanging over Binance including an investigation and serious allegations. Binance is already blocked in several countries and Binance US is blocked in several US states. Additional states may be blocked from using Binance for trading or transfers of any kind until the investigations have concluded one way or another.

Anyone interested in investing in the crypto market should pay careful attention to how unstable it can be with prices rising and falling dramatically multiple times per day in some cases. There are few investments that are ever considered a “sure thing” but none may be as risky as these.

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