Different Types of Cryptocurrencies: Binance Coin as an Example
All cryptocurrency assets can be divided into different categories. Bitcoin is the first cryptocurrency, so it has the status of a separate asset outside of the categories. The other blockchain projects, like Binance Coin, can be divided into several types. Do you want to exchange 0.0012 BNB to USD or any virtual asset? Then you should first learn more about them.
These are alternative coins — any cryptocurrencies with their own blockchain (except for bitcoin). Some of them are similar to Bitcoin. Others are focused on introducing and using new tools and expanding capabilities. By changing the open-source code of the BTC, altcoin developers can:
- Speed up transactions
- Optimize the mining process
- Create various automated contracts
- Form the basis for working with crypto applications, etc.
They function as digital assets but do not have their own blockchain like a standard cryptocurrency. Instead of mining, tokens are immediately issued in full emission. These assets are created by various companies. Brands like to use them to raise funds for the development of their projects or to ensure the performance of products. Investors, in turn, receive guarantees that the company will fulfill its obligations to them.
Digital coins, the price of which is tied to tangible assets — dollar, gold, oil, etc. The rate of bitcoin and other similar cryptocurrencies changes during the day, week, and month. On the other hand, the cost of Stablecoins is extremely stable. Price fluctuations, of course, happen, but they are rarer than that of cryptocurrencies. Stablecoins are suitable for those who intend to transfer their savings into digital assets with minimal risk.
It should be borne in mind that these terms may have different meanings depending on the context. For example, the word “cryptocurrency” can mean, among other things, Altcoin, Token, and Stablecoin. A Stablecoin is, from a technical point of view, a kind of token. With the development of the cryptocurrency industry, new technologies began to appear that are rapidly gaining popularity.
This is how non-fungible Tokens are denoted. They were created to transfer ownership of unique assets to the blockchain:
- 3-D models
- Game items, and more.
Each token is unique and cannot be replaced with another. NFTs are especially popular in the collector community.
Decentralized Finance is not separate cryptocurrencies. They stand for complex platforms that can combine different types of digital assets and their functions. Some experts believe that projects like these revive the cryptocurrency segment.
The main feature of such services is that their users can provide and receive various services directly without the involvement of intermediaries. Moreover, all calculations are carried out in a reliable decentralized network.
Binance Coin (BNB)
It is the main token in the Binance cryptocurrency exchange system, as well as in the Binance Chain and Binance Smart Chain blockchains. You cannot mine this coin. BNB is valuable because it can be used as a means of payment both on the exchange itself and in many services outside of it.
- Discounts for services of the Binance Coin exchange;
- Convenient use as a means of payment — the number of transactions is bigger than in Ethereum;
- Low commission;
- Deflationary effect — every quarter, a part of tokens is burned to limit their number.
Today BNB can be used for a variety of tasks:
- Payment of commissions on the trading platform and Binance blockchains;
- Exchanging on the Alligat0r crypto exchange aggregator;
- Participation in Launchpad;
- Creation of smart contracts;
- The payment as a reward;
- Sending donations.
Thanks to all these advantages, Binance Coin has become one of the most popular cryptocurrency assets.