Binance Coin (BNB) vs Ethereum (ETH): Which Blockchain is Better?

Ethereum  has been the top blockchain for smart contracts, dApps and DeFi. In fact, it is the blockchain upon which the majority of crypto tokens (ERC-20) are created. Major projects such as Tron were also initially launched on Ethereum because of its ability to support the creation of other networks.

As time passed, other blockchains have emerged with their own tokens, which support similar functionalities as Ethereum. One of such is Binance Chain, which has Binance Coin (BNB) as its native token. In this article, we will compare the use of Ethereum’s native coin ETH to that of Binance (BNB). We will look at the community, public chain, use cases and utility of the two coins.

Community

ETH is the native cryptocurrency used to run the Ethereum network. All projects based on the Ethereum blockchain use ETH for several purposes and the growth of the DeFi ecosystem brought an unprecedented increase in the number of people using the network upon which the entire ecosystem is built. This ecosystem together with the many other users of ETH form the community.

Binance Chain has also waded into the DeFi ecosystem recently and has an active community of users in the space as well. It has a wallet known as Binance Smart Chain (BSC) wallet which is used primarily to interact with DeFi exchanges such as Uniswap, Sushiswap and the rest.

Like Ethereum, it also has a large community of everyday users and traders.

Public chain

The Ethereum blockchain is one of the largest because it supports several different functions that Bitcoin for instance cannot. This makes it grow continuously to reach the current size of users. As at 28 April, the number of active addresses on Ethereum hit a new all-time high of over 676,000.

The network currently processes over $30 billion in transactions per day, roughly double that of Bitcoin. While gas prices in the form of fees have been outrageous on Ethereum, it is said to be trending lower following the collaboration with Polygon to improve the network.

Binance Smart Chain (BSC) on the other hand recently hit 1 million daily active users, surpassing Ethereum. This makes it the most used blockchain by this measure according to onchain data analytics firm Crypto Rank. BSC has also surpassed Ethereum by number of daily transactions. This flippening of Ethereum by BSC is mainly due to the fees on Ethereum that has made users explore cheaper blockchains for transactions.

BSC has also surpassed Ethereum’s number of daily transactions. As at 8 April, BSC’s daily transactions was 4,995,155 which is roughly double that of Ethereum at 1,280,306.

📈#BinanceSmartChain has become the most used blockchain in terms of active unique addresses. It reached a high of one million active unique addresses on April 21, compared to @Ethereum 700,000 on the same day. pic.twitter.com/rPARHRODpQ

— CryptoRank Platform (@CryptoRank_io) April 29, 2021

Use cases

ETH can be used for many purposes, including payments. This is far cheaper than sending fiat money across borders as the fees are lower. However with the growth of Ethereum, scalability has become an issue, so the fees have skyrocketed. This has taken a toll on users of the network. It is also used to pay for gas fees on the network. ETH has also recently gained popularity as a store of value as the price has been soaring, placing it in the same class as Bitcoin.

BNB is also used for payment, it fuels the exchange platform and also as a store of value lately. The BNB price has risen rather very fast and investors now consider it as an investment, even though it was initially launched only as a utility token. Transactions with BNB have increased also rapidly due to the lower fees associated with its use compared to Ethereum which has similar use cases.

Binance exchange is getting more popular by the day and it is the world’s most used crypto exchange platform. New features are regularly added and traders are actively switching to Binance. Users of the Binance exchange can use the Binance Coin token to get additional discounts and rewards, which forces users to buy and hold Binance Coin.

Utility

ETH has a number of use cases. To start with, anyone who uses the Ethereum network uses it to pay for gas fees. ETH is also used for staking on the network to earn rewards. This is the most recent use case since the launch of Ethereum 2.0. As at 14 April, there was over $9 billion worth of ETH staked on the network. Those who use the Ethereum network for smart contracts and interact with dApps also use the coin for these processes. Another fast growing use case for ETH is for creating NFTs. The network is also the foremost for creation of NFTs which cost a significant payment in fees to create.

BNB has very similar use cases to ETH, since it’s a hard fork. First, it is used to pay for transaction fees on the Binance exchange. There are now dApps and smart contracts also supported on the network, so BNB is used as the native token that powers the network and also as the token to use for interacting with smart contracts and dApps. The popularity of PancakeSwap, which processed a lot of transaction with low fees gave investors a lot of trust in the Binance Smart Chain.

This is why the number of users on BSC is on the increase as shown by the number of active addresses which has surpassed that of Ethereum. The increase is also caused by the low fees on BSC as compared to Ethereum.

Conclusion which blockchain is better

The Ethereum network shares a lot of functions with the Binance Smart Chain (BSC). However, the latter is growing rapidly in popularity, a development that can be attributed to its faster transactions and lower fees. Ethereum lost this in 2020 when the DeFi ecosystem came on board. Therefore BNB which is the native token for BSC is also growing rapidly and some analysts say may flip Ethereum from the second place on the ranking of cryptocurrencies by market cap.

Due to the faster transactions and extremely low fees we think that Binance Smart Chain (BSC) is better for now.