This crypto turned $ 10,000 into over $ 100,000 in 2 years

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If you had spent $ 10,000 on the Binance Coin (BNB) two years ago, that BNB would be worth $ 103,190 today.

Two years ago (June 16, 2019) a BNB cryptocurrency cost $ 33.92. A $ 10,000 investment would have bought you about 295 BNB. According to CoinMarketCap data, its value has increased by over 900%.

Of course, looking back is a wonderful thing, and there are many things we all would like to have known two years ago. But since we can’t turn back time, let’s take a look at BNB today and see if it’s a good option for the future.

What does BNB do?

The Binance Coin is the native token in the Binance network. Binance is one of the largest cryptocurrency exchanges in the world.

BNB is more than a token on an exchange. That’s because Binance is both an exchange and a platform for decentralized finance (DeFi) and other applications. DeFi applications are all blockchain applications that are intended to replace existing financial services. Developers can use the Binance Smart Chain (BSC) to create new projects.

This combination is particularly powerful because DeFi projects that build on the BSC can then reach potential investors via the stock exchange. For example, there is a Binance launchpad on the stock exchange that presents new companies.

A little side note: Due to leveraged crypto trading regulations, U.S. citizens can only use Binance.US, which has fewer features and coins than the international website.

The Binance Smart Chain

The Binance Smart Chain is able to execute these important smart contracts.

Smart contracts, which have been key to Ethereum’s success, are small self-executing codes that live on the blockchain. At a very simple level, you can turn a coin from a pure barter token into a barter token with additional conditions.

Think of it as the difference between “I will pay you 1 BNB” and “I will pay you 1 BNB when you finish designing my company logo”.

The Ethereum network has been increasingly congested this year, which has increased its gas fees (transaction fees). Gas charges rise when the grid is full. This has led many DeFi developers to look for alternatives. Binance is one of them.

Here are just a few of the uses for BNB:

  • Reduce and pay for cryptocurrency trading costs on Binance exchanges
  • Take part in interest-earning activities such as staking on the Binance exchanges
  • Pay gas fees in the BSC network
  • Power DeFi and Non-fungible Token (NFT) projects

Potential challenges for BNB

If you are considering buying BNB, it is certainly a solid cryptocurrency with a lot to be said for it.

However, there are also some challenges on the horizon that one should be aware of.

1. DeFi regulation

Tighter (or too strict) regulation worries many cryptocurrency investors, but DeFi apps could be the worst hit. Various regulators want to get involved, and the end result could be a much more restrictive environment for both Binance and the applications on its BSC.

Increased regulation could affect Binance’s activities as an exchange and as a platform for other cryptocurrencies.

2. US regulators investigate Binance

Binance is currently under investigation by the Justice Department and the IRS over allegations that US customers have illegally used the international website. The company is also on trial in Germany and the UK after issuing tokens that track the prices of stocks like Tesla and Apple.

It’s not so much the result of either of these cases that is worrying – it’s Binance’s apparent willingness to keep pushing regulatory boundaries. The risk is that it will burst at some point.

3. Other market participants, including Ethereum 2.0

There’s a lot of competition in both of Binance’s markets. As a platform or ecosystem for other blockchain applications, Ethereum is currently still the largest player.

Ethereum is in the process of gradually rolling out its Ethereum 2.0 (Eth2) upgrade. If fully functional, Ethereum 2.0 would solve its scalability and sustainability problems, which in turn could make BSC less attractive. Cardano (ADA) and EOS (EOS) are also important players in this area, as both can offer an attractive environment for developers.

And there are hundreds of other cryptocurrency exchanges in the market, some of which are licensed to operate in the United States. Binance has a loyal customer base, but it’s just getting started.

All cryptocurrencies are volatile

As with any cryptocurrency investment, you should be aware that the market can be volatile and the market is relatively untested. Hence, investing money that you cannot afford to lose is not a good idea. Nobody can predict whether the BNB will grow by another 900% in two years. The real question is how do you think it will work in the long run.

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