Binance Revs Up The Crypto Game With Bitcoin BEP2

The Binance BTCB: All you need to know

Earlier this week, Binance made yet another large launch, bringing the project to the forefront of crypto news sites. In this case, the hubbub was about the launch of BTCB, a new Binance-issued token.

But what is BTCB? Why does it matter, and which advantages can it bring to its holders? At first sight, it might not be obvious. But in truth, BTCB is one of many steps towards simplifying – and perhaps universalizing – cryptocurrencies.

What is BTCB?

BTCB is a pseudo-stable coin, issued by Binance and existing on the Binance Chain. It’s a separate token and project from the Binance Coin.

Its status as “pseudo-stable” comes from the way it works. As stablecoins do, the BTCB has its value tied to another currency. However, instead of tying itself to a stable fiat currency, BTCB’s price is tied to that of the bitcoin.

How does it work?

For each BTCB token issued on the Binance Chain, Binance holds an equal amount of BTC. This makes the token work exactly as stablecoins do – the price is to remain tied because the entirety of the coinage has hard backing.

You can buy BTCB on Binance, as you would any other tokens.

Why does BTCB matter?

Although at first, it might seem silly, in truth BTCB is a step towards pushing crypto adoption. After all, two of the big problems with widespread crypto adoption are:

1.       There are far too many tokens, and

2.       Said tokens work on separate blockchain, while interoperability is almost nonexistent.

By issuing pegged tokens on the Binance Chain backed with Bitcoin, Binance manages a single, very important thing: It allows tokens that aren’t native to the Binance Chain to be traded in it. 

This is, therefore, but the first publicly laudable step towards blockchain interoperability.

Why Bitcoin?

Because, for better or worse, the world at large think cryptocurrencies are the same as Bitcoin. Many new crypto investors go straight for BTC, and in many people’s minds, Bitcoin is the currency of the future.

Does this affect Bitcoin itself?

It actually does, positively. The Binance Chain, being a last-generation blockchain, has many advantages the Bitcoin blockchain lacks. Particularly, the Binance Chain is much better optimized and handles the Bitcoin Scalability Problem in a much better way.

To put it differently, BTCB doesn’t only allow for Bitcoin to be traded on the Binance Chain. It also brings all the advantage of that chain to Bitcoin, including faster transaction times, smaller transaction costs, and a much higher rate of transactions that can be handled per second.

In other words, the main issues of BTC are solved when trading BTCB, while the tokens will always be worth exactly the same amount.

How does this push us towards interoperability?

At first, this isn’t obvious, because it’s only BTC that’s pegged for now. But in the future, there’s nothing keeping Binance from issuing more pegged tokens – to ETH, Dash, Ripple, Monero, and others.

 All  these pegged tokens could be traded in the Binance Chain, allowing people to exchange them for each other instantly shall they wish to.

When users want to return to the main blockchains, they could cash out with Binance, turning in their pegged tokens and receiving the original token in the original blockchain in return. 

Thus, Binance Chain is taking steps towards creating a blockchain where diverse tokens can be freely traded.

Conclusion

There is no doubt that race to dominate the crypto trading scene is on, and Binance is sparing nofight to take the lead.