So, The Binance Smart Chain cheaper is an Ethereum copy that is much faster and its 4 times ahead of Ethereum in terms of the volume of transfers, while the Buterin’s project itself is ahead of Binance only in terms of commission growth. So is the Binance Smart Chain the real Ethereum killer?
In some words the Ethereum financial ecosystem became a hostage of its own popularity. The Hype around DefI has greatly increased the load on the network and pumping transaction fees to the sky. Some times ago, the fee for a simple transfer of currency from one wallet to another reached $ 50, that made the use of Ethereum economically inexpedient.
In situations like this, people are looking for an alternative with a more profitable commission system and here we can find the ecosystem of Binance Smart Chain, one of the largest cryptocurrency exchanges , built on the basis of the native BNB token. The size of commissions in the BSC network is ten times lower, that leads to an outflow of users from the ecosystem of Etherium to BSC. In recent days, the daily volume of transactions in BSC exceeded the 9 millions, surpassing Ethereum by 600% in this indicator.
What is Binance Smart Chain?
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), that allows users to get the best of both sights: the high transaction capacity of BC and the smart contract functionality of BSC. Furthermore, Binance Smart Chain also implements the Ethereum Virtual Machine (EVM), which allows it to run Ethereum-based applications like MetaMask.
The aim of the platform is to give possibility to developers to create decentralized applications (DApps) and help users to manage their digital assets cross-chain with low latency and large capacity. Binance does not hide that Binance Smart Chain is almost a copy of the Ethereum ecosystem, but with lower fees and low degree of decentralization. As an Ethereum replica with almost the same functionality and much lower fees, BSC has quickly gained popularity among DeFi users and developers. Astronomically high Ethereum gas prices have only accelerated BSC’s adoption.
The Pros and Cons of the Binance Smart Chain Blockchain
- Centralization — The Binance Smart Chain isn’t DeFi. Binance CEO Changpeng Zhao named it “CeDeFi” or Centralized DeFi. The nodes that manage the network are permissioned. Additionally, there is centralized authority, Binance, that manages the direction and operations of the chain. Centralized systems are more prone to system failures, attacks, regulatory compliance orders and even hacks. However, we must be aware of the fact that it is exactly this biggest trade-off that enables the low block times and low transaction costs, that is the largest advantage of BSC.
- Becoming a node operator and validator is complicated and resource-consuming — All network validators on BSC need to be approved by Binance and the minimum requirements for node operators are set quite high.
- Cheap transactions — In times of high congestion of the Ethereum network, the same transaction could cost over 1,000 times more on Ethereum instead of cheap transactions on BSC.
- Bridging allows for easy token migration — Developers have established several cross-chain bridges so BSC users can easily move tokens from one blockchain network to another. The Binance Bridge currently supports over 40 tokens. This allows users to move assets such as USDT, ETH, and many other tokens to and from Binance Smart Chain with ease.
- Faster adoption rates- Binance has an already established user base from which Binance is able to draw exponentially more users to BSC. This allows faster adoption than the organic growth of a smart blockchain project , that isn’t backed by a big entity like Binance can achieve
So will Binance Smart Chain unthrone Ethereum? While the size and influence of the Binance exchange and the market cap of the BNB coin make it a strong competitor, its centralized nature runs counter to the central ethos of the crypto economy, so it’s unlikely to replace Ethereum. Ultimately, the new crypto economy is not a zero sum game so a more likely scenario is that both systems will flourish, while the competition between them will drive innovation on both networks.