Binance, the world's largest cryptocurrencies exchange, has announced the launch of its own blockchain which is seen as direct competition to Ethereum. Named Binance Chain, the ledger will allow interested individuals and startups to issue their own coins directly on it, similar to how new cryptocurrencies are issued using Ethereum.
As part of the launch, Binance's own cryptocurrency, BNB, will also move away from Ethereum to Binance Chain.
"Binance Chain is a blockchain project initiated by Binance and has since involved a whole community of Binancians. Together, we want to ensure the creation of a blockchain that will serve as an alternative marketplace for issuing, using, and exchanging digital assets in a decentralized manner. The first use case for Binance Chain is Binance DEX, a new decentralized exchange (DEX) that aims to carry over the best features of the current Binance exchange in a decentralized setting, while also offering the benefits and security of a DEX. Below, we explain what sets Binance Chain and DEX apart," reads a statement by Binance.
Securing crypto exchanges
Over the years since Bitcoin was introduced and other cryptocurrencies followed, we've witnessed the hacking and loss of many people's coins held by cryptocurrencies exhanges. In most cases, exchanges are centralized and use multisignature (multisig) wallets thus their customers don't have access to their own wallet keys making the exchange a centralized target for hackers.
Binance hopes that with its new decentralized chain (DEX) it can make this a bit better with Binance Chain also serving as the foundation of Binance's own decentralized exchange.
"At Binance, we are fully aware of the issues that hinder DEX platforms from reaching a wider user base. And among the current and emerging DEX players in the market, we are in a unique position of knowing how to run a secure exchange platform that quickly processes billions in transactions for millions of people. From there, it’s a matter of figuring out how to replicate the successes of our market-leading centralized exchange into the decentralized realm."
Cover image credit: Changpeng Zhao, CEO of Binance.