TRON founder Justin Sun took a break from promoting his own personal cryptocurrency projects to shill Binance Coin (BNB) — calling it “a new Bitcoin.” His comparison wrong on so many levels.
ERC20-based token Binance Coin (BNB) has been on a tear since the start of the New Year — there’s no doubt about it. On Jan 1, 2019, BNB was worth around $6 and had a market cap of almost $800 million. Three months later, the token’s price more than doubled to over $14 and a market cap of $2 billion.
The rise helped BNB gain traction on both social and mainstream media. Just several days ago, Forbes published an article about bears still dominating the cryptocurrency landscape and how Binance Coin has risen above the current market’s conditions.
Binance CEO Changpeng Zhao shared the story immediately and thanked Forbes for the wonderful job they’ve done in promoting his precious token. This could have been the end of it, if not for TRON founder Justin Sun.
To please his good friend, who has helped him raise $7.2 million in just 15 minutes with the BitTorrent ICO, Sun went on and tagged BNB as “a new Bitcoin.”
— Justin Sun (@justinsuntron) March 5, 2019
Crypto Twitter reacted immediately.
We don’t need a meme to express our indignation. Instead, we have several hundred words to help the TRON founder understand the obvious differences between Binance Coin and Bitcoin (BTC).
BNB: A Company-Issued, Centralized ERC20-Based Utility Token
First of all, Binance Coin (BNB) is a token. More specifically, it is an ERC20-based asset created on the Ethereum blockchain that had an ICO of its own in 2017.
Even though holders correlate Binance exchange performance with BNB, Zhao mentioned just days ago that the token isn’t a security whatsoever. Therefore, owning BNB does not entitle anyone to receive a part of the exchange’s profits.
No, that would make #BNB a security, and you don't want that.
— CZ Binance (@cz_binance) March 4, 2019
BNB will move to the Binance DEX ‘blockchain’ once the mainnet is live — facilitating trading and reducing fees. Nevertheless, there are still many questions revolving around the decentralization of the future DEX.
Most importantly, BNB is a centralized asset that serves the purposes of a lucrative company. This company has bought back and burnt tokens and will continue to buy back and burn tokens, which may continue to inflate the price.
What could happen to the token if Binance theoretically files for bankruptcy and disappears off the face of the cryptocurrency ecosystem? Though the hypothetical scenario is unlikely, BNB would be then rendered useless.
Bitcoin: The Mother and Father of BNB and Tron
Bitcoin (BTC), on the other hand, is not subject to such centralization. There is no company that could change the total supply or activate a ‘kill switch.’ Bitcoin solely depends on its community, not on a specific company.
Furthermore, Bitcoin is not a utility, undercover security, or token. Contrary to what some maximalists believe, BTC was designed to be a reliable, fast, and independent means of payment. While it may struggle to be digital cash, at the moment, there are still many service providers and online retailers accepting Bitcoin.
Even though Zhao may try to push BNB to the same level as BTC and advertise the token as digital currency, he won’t succeed. Binane Coin doesn’t meet the Bitcoin standard — decentralization, transparency, privacy — and never will. BNB will remain a company-issued cryptocurrency mostly used on the Binance platform.
Last, but not least, without Bitcoin to create the necessary market, BNB or Binance would have never existed in the first place. TRON (TRX) wouldn’t exist, either.
What do you think of Sun’s latest blunder? Is he just seeking attention and trying to stir up controversy? Did he compare BNB to BTC because he truly doesn’t know any better? Share your thoughts in the comment section below!
Images courtesy of Shutterstock, Twitter.