Binance Smart Chain (BSC) is a blockchain network built for running smart contract-based applications. BSC runs in parallel with Binance’s native Binance Chain (BC), which allows users to get the best of both worlds: the high transaction capacity of BC and the smart contract functionality of BSC. Furthermore, Binance Smart Chain also implements the Ethereum Virtual Machine (EVM), that allows it to run Ethereum-based applications like MetaMask. The aim of the platform is to enable developers to build decentralized applications (DApps) and help users manage their digital assets cross-chain with low latency and large capacity.
- Important differences between ETH and BSC
Ethereum has a larger ecosystem with transaction numbers spread more widely among bigger numbers of DApps. On the other hand, Binance Smart Chain is supported by a centralized exchange. It has centralized elements that allows it to conduct large amounts of transactions at a comparatively low cost. Gas is hugely cheaper on BSC than on ETH that is currently struggling with scaling issues. Transaction fees on ETH are around $20, whereas on BSC, they are just $0.01. But the compatibility with Ethereum allows developers to transfer their projects easily from Ethereum to the Binance Smart Chain without complex technicalities.
- How Does the Binance Smart Chain Work?
As it was mentioned before, Binance Smart Chain is an independent blockchain, but it was also developed as a complementary system to the original Binance Chain. Therefore BSC utilizes a dual-chain architecture — due to that users can transfer assets from one chain to another with ease. This interoperability ensures that the Binance Chain facilitates fast transactions, that is very important because many powerful dApps are built on the Binance Smart Chain.
It won’t be an exaggeration to point out that the Binance Smart Chain uses a Proof-of-Stake consensus known as the PoSA, or the Proof of Staked Authority. The meaning of this mechanism is that participants stake their BNB, or the Binance Coins in order to become validators. The BSC achieves a block time of less than 3 seconds with PoSA. If any of the participants of the BSC propose a valid block, they will receive a transaction fee for all the transactions from which the block consists of. There is no block distribution for the freshly minted BNB tokens, unlike most other protocols. In fact, BNB is non-inflationary, which means that its supply is going to diminish over the time, as the Binance team burns coins regularly.
- Moving Cryptocurrencies to the Binance Smart Chain
An example of the utility of the cross-chain functionality is the ability for users to swap BEP-2 tokens for the BEP-20 tokens. BEP-20 is the new token standard introduced for the Binance Smart Chain, and the BEP-20 tokens have all the same functions as the ERC-20 tokens, which is the most common Ethereum token standard. You can simply move tokens from one chain to another (for instance, BEP-8 to BEP-20 ) by using the Binance Bridge in TBCC Wallet . Another way to get the BSC digital currencies is through withdrawals from your TBCC Exchange account directly to your wallet. While you will be making a withdrawal, you will find the option of choosing BEP2 or BEP20 standard. Choosing BEP20 is the right way to move your cryptocurrencies to the Binance Smart Chain.
- Checking the metrics on the Binance Smart Chain has been simplified through the use of BscScan which is a product of Etherscan. Through the BscScan, you will be able to monitor closely the metrics of the average gas prices, unique address counts, total daily transactions, the top BEP-20 tokens and BSC validators and yield farms.
While the number of users of BSC is already huge, the future for this Blockchain looks bright as more developers are moving projects to it. The inbuilt cross-chain compatibility has been a major game change for BSC as it continues to forge a path in providing users with an excellent Blockchain experience. Currently, many users prefer BSC, in order to get around massive gas fees on Ethereum. It definitely draws in users with fewer funds who want to participate in Yield Farming, Liquidity Mining or DeFi to BSC. As long as the most popular smart contract-based blockchain, Ethereum, continues to struggle with congestion, slow transaction speeds and exorbitant transaction fees, we can expect to see the increased adoption of more affordable alternatives like BSC, Polkadot and Cardano.