Neither Bitcoin, Ethereum, BNB… This is the perfect world for Binance CEO – CVBJ

0


Highlights:

According to Changpeng Zhao, “It is important that entrepreneurs issue their own cryptocurrency.”

Several examples show that investing in these currencies, multiple times, is not a good deal.

There are currently over 8,000 cryptocurrencies and tokens. For Changpeng Zhao, CEO of Binance Exchange, this number is not enough and he considers that there should be millions.

That’s what the businessman (better known by his initials “CZ”) said in a post on the company’s official blog with a Tolkien-inspired title: “One coin to rule them all or million pieces? “

CZ himself answers the question at the top of his text: “I think people are going to keep creating new tokens for their projects. And there will be millions of tokens. Like startups, most will fail. But those who succeed will be very successful and create a lot of value for the world. “

Chagpeng Zhao not only imagines that this will happen, but he wishes it would. For him “it is important that entrepreneurs issue their own currency” and he assures us that he is responsible for explaining them to them when he talks to managers of other companies. “Once I explain it to them, they usually have a whole new perspective on cryptocurrency and why it’s important to their future economy.”

3 advantages for companies that issue their own cryptocurrencies

The 44-year-old Chinese-Canadian businessman argues that there are three advantages to a company that creates its own token or cryptocurrency.

The first of these is the possibility of raise funds at launch. Through Initial Coin Offerings (ICOs), coin issuers are able to receive large sums of money. In return, they give coins at low prices to early investors.

As a second benefit, CZ mentions the parts that the team holds. These are sometimes sold later if the price of the crypto asset increases. Thus, the issuing company obtains economic advantages.

Finally, the CEO of Binance describes that with your own token, you can create a new ecosystem capable of retaining users.

The Binance Coin (BNB) token is an example of the latter. Within the exchange, it is used to pay commissions, participate in launch pads, and earn interest (paid in the same currency) if it gets stuck for a period of time. Outside of the exchange, BNB is the native token of the Binance Smart Chain blockchain and there are many decentralized funding platforms (DeFi) and games to win in which BNB plays a leading role.

The development teams of the Metaverse, so fashionable lately, have also understood this. To bring Decentraland to life, for example, it is necessary to have the mana token, which is the currency of this virtual universe.

That said, Changpeng Zhao advises entrepreneurs:

You cannot do this with fiat currencies. It just doesn’t work. You cannot do this even with Bitcoin. You need to create a new token for your platform or ecosystem; otherwise, you cannot create a symbiotic growth environment with its users. “

Changpeng Zhao, CEO of Binance Exchange.

Binance, founded and run by Changpeng Zhao (pictured), is the cryptocurrency exchange with the highest volume of trading. Source: Piergiorgio Borgogno / YouTube.

Launching cryptocurrencies is usually a good deal (buying them isn’t always the case)

There is nothing wrong with your logic. Indeed, for issuers of tokens and cryptocurrencies, the launch is generally a good deal. This is also true for Binance and other exchanges that list these crypto assets. Trading and withdrawal commissions bring in a million dollar profit for the brokerage houses.

Investors who manage to grab pre-sales (if the project is not a fraud), in general, also manage to turn a profit.

The problem, perhaps, is assuming that these projects (and their tokens) will continue to appreciate in the long run. Those who have been in the bitcoin and cryptocurrency world for years know the many fashions that come up from time to time and get all the attention.

But they are usually just that: fads. The Royal Spanish Academy gives this word two possible meanings and is distinguished both by its transient and changeable character.

“Fashion: 1) Usage, fashion or custom which has been in vogue for some time, or in a certain country. | 2) Collective and changing taste in clothing and accessories. “

Dictionary of the Royal Spanish Academy.

For example, one of the fads that hit the bitcoin universe was “ICO fever” in 2017 and 2018. Dozens of initial coin offerings were released daily. Thousands of bitcoins have been collected by the issuers of these assets. Almost 5 years later, most of these projects – which looked extremely promising at the time – have failed to transcend. With a few exceptions, their prices, measured in a hard currency like BTC, have trended downward since then.

It can be named, among other failed projects (from the point of view of investing in their currency), to EOS and IOTA. Also cardano (ADA), despite the fact that its dollar price has increased, it still does not exceed the BTC figure reached in March 2017.

The price of ADA, Cardano’s native cryptocurrency, has not surpassed the all-time high reached in 2017 (if its price is measured in bitcoin). Source: CoinMarketCap.

Bitcoin: “the old reliable”

In this context, bitcoin (BTC) continues to present itself as the “old trusted”. With its monetary policy defined since its inception; its supply limited to 21 million pieces; its emission rate, which is halved every 4 years; and support from the market and miners; The decentralized money created by Satoshi Nakamoto has been strong and continuous for 13 years.

Maybe bitcoin won’t make you rich overnight. You may even have to wait long hours of “hodl” before seeing any monetary gain measured in fiat money after investing in BTC. This is not a problem: Bitcoin was not created to make you rich but to give you complete financial sovereignty as an individual (a possibility that centralized cryptocurrencies do not offer, with a company or a foundation that determines the progress of the project and its use cases).

In the long run, the increase in the price of bitcoin has left most hodlers in profit. Source: CoinMarketCap.

Either way, the historical bitcoin price chart shows that in the long run, the first cryptocurrency did not disappoint anyone who understood its properties, and decided to use it to protect their capital.


Share.

Comments are closed.