Bitcoin is known as the biggest and most valuable cryptocurrency by market cap. It is also the first cryptocurrency to be created, which may be why it is more popular than any other.
But how does it compare to Binance Coin (BNB), a proof-of-stake cryptocurrency owned by the Binance company? Which of the two is a better investment and under what circumstances should you prefer one over the other?
In this guide, we explore the major differences between the two cryptocurrencies, highlighting their uniqueness to help you decide which one you would like to buy today. Without any further ado, let’s get started.
What Is Bitcoin (BTC)?
As mentioned earlier, Bitcoin doesn’t need any introduction as far as the crypto space is concerned. It was the first cryptocurrency created, currently the largest by market cap and also by unit value.
Bitcoin was originally created as a way of making instant peer-to-peer electronic transactions. As time passed however, the network became slower and so because less appealing to those who used it for payments.
This led to a split that resulted in the current Bitcoin Cash cryptocurrency. However, no upgrade has been done on the network to make it faster as the developers claim that the slow transactions are a part of the design and not a problem.
Although some merchants still accept BTC as payment, there are not as many as there would be if the network was faster. Bitcoin however has found another important use case, since it is now regarded as a store of value in the category of gold.
Most people who buy Bitcoin today do so to hold it as a store of value and a hedge against inflation. So far, Bitcoin’s value has increased hundreds of folds since its launch in 2009, unlike fiat currencies which are becoming less valuable by the day.
The rapid increase in value may have to do with Bitcoin’s limited supply. There are only 21 million BTC that can ever exist, and almost 20 million are already in circulation. Bitcoin uses the proof-of-work (PoW) consensus which requires mining to release new BTC.
With the small supply, it is expected that the price will continue to soar as demand continues to surge in the future.
What is Binance Coin (BNB)?
Binance Coin (BNB) is a proof-of-stake (PoS) cryptocurrency that is used to power the Binance ecosystem. The token is used to pay for transaction fees on the Binance Smart Chain (BSC) blockchain, and also used for staking to secure the network.
BNB also serves as a governance token. Those who hold it can vote on new development proposals on the network, thus participating in the governance of the project.
Because it is a PoS cryptocurrency, Binance Coin is much faster than Bitcoin in terms of transactions and also costs much less than Bitcoin. However, the Bitcoin network may be more secure because of the PoW algorithm which requires a lot of work to crack.
Like other PoS networks, BSC supports non-fungible tokens (NFTs), smart contracts and decentralized applications, all of which you can use if you own some BNB. The token is also widely used as a token for payment at merchants.
BNB is also popular among investors as an investment asset, which is also a major strength. The price has also risen significantly from its initial price, making it the fourth largest cryptocurrency by market cap currently.
Which Should You Buy?
If you’re looking for a reliable long term crypto investment, Bitcoin is the one to go for, because it has proven its reliability and established itself as an investment asset.
However if you’re looking for a token to invest in that you can also use easily for payments, BNB is the best. You will have to buy BNB as well if you wish to participate in the web3 ecosystem supported by Binance.
