Binance Smart Chain (BSC): Its Edge over Ethereum Blockchain
- Binance smart chain is the foundation of the BNB cryptocurrency. The system is optimized to offer ultra-fast trading to users.
- The Binance made some trade-offs to achieve its very fast trading capability.
- Binance Chain (BC) is not flexible in terms of programmability, compared to other blockchain systems.
- Ethereum blockchain is likely to lose its Defi battle against Binance Smart Chain.
Binance smart chain (BSC) is a blockchain technology protocol with a conducive system for building high-performance dApps. The aim of developing the BSC is to have a system that allows cross-chain compatibility with the Binance Chain. This cross-chain compatibility feature will allow users to access the best of both systems.
Also Read: Bitcoin Lightning Network
In April 2019, Binance launched the Binance Chain (BC) to facilitate and improve fast and decentralized crypto trading. However, the chain is not very flexible. The smart contracts features optimized to offer fast and efficient trading have the potential to congest the network. The issue of blockchain scalability has remained the most challenging obstacle to blockchain development. The Binance Smart Chain was created to solve this lingering problem.
Exposition of The Binance Smart Chain (BSC)
In simple terms, we can define BSC as the blockchain protocol that runs parallel to Binance Chain. However, BSC has smart contract functionality and is very compatible with the Ethereum Virtual Machine (EVM). The BSC project kept the high throughput of the Binance Chain in place, but it brought smart contracts into the system. Therefore, both BSC and BC blockchain protocols operate side by side. Meanwhile, the Binance Smart Chain is capable of running independently if the Binance Chain happens to go offline.
Remember that BSC is EVM compatible and launched with support for the rich ecosystem of Ethereum tools and dApps. Theoretically, it means that it is easy for developers to move their projects from the Ethereum blockchain to BSC. In effect, applications like MetaMask can be easily modified to work with the Binance Smart Chain.
The Ethereum Blockchain Protocol
The Ethereum protocol is a decentralized open-source system that features smart contracts. Developers can write code and build different kinds of decentralized applications on the Ethereum blockchain. The main focus of the Ethereum network is to run the programming code of any decentralized application. It is basically the same function that BSC has.
However, this post highlights logical reasons why the BSC is technically a mile ahead of Ethereum.
Why Binance Smart Chain is better than Ethereum Blockchain
Although the price of Ethreum reached an all-time high of $2,024, the increasing gas fee has become a problem. Ethereum network’s high transaction fees have rendered a number of Defi projects almost unusable. Defi protocols on the Ethereum blockchain have been one of its best success stories. However, Ethereum is practically losing its Defi market dominance to Binance Smart Chain. The high transaction fees of Ethereum have become a growth catalyst for BSC.
BSC has become the go-to place for many traders and due to high gas fees on the Ethereum network. The rising popularity of BSC has caused the price of its native token BNB to skyrocket. Recently, the BSC trading volume is nearly double that of Ethreum. This is an obvious indicator that the market is shifting from Ethereum to the Binance Chain. Onwing to scalability issues and high gas fees, the Ethreum network is about to be relegated to the background.
The growth of the Defi market was the beginning of the “end” for the Ethereum blockchain. During the Defi boom, a study by Finance Magnates revealed that the Ethereum network witnessed high network congestion. The more Defi protocols build on the network, the high the number of transactions going through the network. With the high traffic comes high congestion and the more fees go up, and transaction time slows down.
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Although the founder of Ethereum, Vitalik Buterin promised the issue will be resolved with the coming upgrade. However, Ethereum 2.0 would take at least another 2 years for its complete rollout. Ethereum currently has no advantage over BSC, it could lose a big portion of its market to BSC. BSC gives users more options for cheaper fees, and that’s a master class from the Binance team. Although Changpeng Zhao (CZ) said in the past that BSC is a support network to Ethereum, we are seeing the opposite today.
Binance Smart Chain is undoubtedly in a pole position to be the go-to network for building dApps and Defi protocols. However, we must not take anything away from the Ethereum network. With the experience of the people behind the project, they can turn the tide around. But until then, the market is under the control of BSC.