In a recent interview at “Decrypting Blockchain for Business” conference, Binance’s CEO Changpeng Zhao cracked the news that the exchange is going to launch a public blockchain dubbed Binancechain in a couple of months.
The new protocol will support the upcoming decentralized exchange announced by Changpeng Zhao back in March and allow users to create their blockchains and issue new tokens in large quantities.
We are launching Binancechain very soon, in a couple months or so, and you will be able to issue tokens on that….I think there will be millions of coins and thousands of blockchains." @cz_binance at @ForbesAsia #ForbesBlockchain @ForbesCrypto pic.twitter.com/az5H62Pgdm
— Michael del Castillo (@DelRayMan) December 4, 2018
Binance Pulls a U-turn
The idea of new tokens flooding the market in droves looks dubious from the practical point of view. Moreover, it contradicts Binance’s philosophy of staying away from low-quality coins with little practical use or poor security and technical attributes.
Back in August Expanse founder Christopher Franko accused Binance of being greedy. He said that the exchange had quoted him a fancy price of 400 BTC for getting his token listed on the exchange. However, Changpeng Zhao stroke back saying that Binance never lists s***coins, not at any price. He claimed that tokens are listed free of charge provided that they meet specific criteria.
We don't list shitcoins even if they pay 400 or 4,000 BTC. ETH/NEO/XRP/EOS/XMR/LTC/more listed with no fee. Question is not “how much does Binance charge to list?” but “is my coin good enough?” It’s not the fee, it's your project! Focus on your own project!
— CZ Binance (@cz_binance) August 11, 2018
Now, Binance is launching a blockchain where seemingly anyone will be able to issue new coins quickly and easily.
So far so good — but it is not entirely clear how Binance is going to police all those millions of tokens and make sure that no shitcoins make their way to the exchange.
The community received the news with heavy sarcasm. Many Twitter users questioned the need of so many blockchains and altcoins. This criticism looks legitimate. Over 10 percent out of 2,000 coins circulation in the market have an average daily trading volume less than $10, and only 2 percent of coins have a trading volume over $1 million. What’s more, according to the recent research conducted by GreySpark Partners, truly original blockchains can be counted on fingers — the rest are 80%-100% clones with minimal deviations in programming code.
Considering the above, it is hard to imagine that thousands of new blockchains will bring practical value and survive in a fierce competition with the existing chains and tokens.
Binance seems to be late for the party with its blockchain solution as the cryptocurrency market needs to purge itself from junk assets, not to spawn additional tokens that will eventually undermine the reputation of the industry.
What do you think of Binance decision to launch its blockchain? Do you think it’s a good idea to flood the market with “millions of coins and thousands of blockchains”? Let us know what you think in the comments below.
Images courtesy of Twitter.