What is Binance Smart Chain? A Complete Guide

History of Binance Chain

In April 2019, Binance, the largest cryptocurrency exchange, decided to launch their blockchain and called it the Binance Chain. At the time, it was a remarkable move for the exchanges as Binance was trying a new approach alongside their traditional crypto exchange services.

The Binance Chain provided speeds that were incredible for 2019. The company took things a step further when they launched Binance DEX. This decentralized exchange became one of the biggest and most popular global decentralized exchanges.

However, not everything was green in Binance. Binance Chain suffered from issues like scalability and flexibility. These two shortcomings eventually overshadowed the other benefits the blockchain provided to its users.

Also, the lack of smart contracts was another significant hurdle that hampered the blockchain’s popularity. These shortcomings led the company to develop and launch Binance Smart Chain. This new endeavor is meant to build upon its predecessor’s works and create a better blockchain ecosystem for users. The aim was to facilitate Binance Smart Chain token development and Binance Smart Chain Dapps development.

Building a Healthier cryptocurrency ecosystem for users

Binance Smart Chain exists to build upon the incredible developments of Binance Chain and introduce additional functionalities for the user’s benefit.

Binance Smart Chain development led to the inclusion of smart contracts on the new blockchain. The benefit of smart contract functionality was a downside that Binance Chain lacked. Smart contracts enabled trust, security and transparency for every user on the blockchain.

BSC (Binance Smart Chain) and Ethereum

The Binance Smart Chain also has the caveat of being compatible with the EVM (or Ethereum Virtual Machine). This compatibility ensures that Binance Smart Chain developers can benefit from the many rewards the Etherum ecosystem has. These rewards include several functionalities and a growing number of decentralized applications running on Ethereum.

It is worth remembering that there are several differences between Ethereum and the Binance Smart Chain. For starters, Etherum’s ecosystem is significantly more extensive and has transactions taking place across several Dapps. Binance Smart Chain has the support of a centralized exchange. The platform has centralized elements that help it handle several trades at a lower fee.

One of BSC’s most attractive features is the reduced gas fees. Binance Smart Chain charges users significantly less. However, the compatibility that Ethereum has enabled developers to transfer their projects from ETH to BSC without much trouble.

The Binance Chain and Binance Smart Chain operate parallel to each other. Do note that BSC is not a second layer to Binance Chain. BSC can function independently of Binance Chain and continue operations if its predecessor goes offline.

The Technology powering Binance Smart Chain development

Binance Smart Chain utilizes incredible and powerful technology and improves upon existing services provided by Binance Chain.

Cross-chain compatibility                                                                                   

One shortcoming that affected Binance Chain was the lack of cross-chain compatibility. This problem made it difficult for developers to enjoy the benefits of other platforms. BSC overcame this issue with dual-chain architecture.

The dual-chain architecture enabled Binance Smart Chain to fix its compatibility issues. Solving this issue allows users to move their assets from one blockchain to another. The architecture also benefits users with an intuitive trading experience. Binance Smart Chain developers can build Dapps on the platform and import them to others without difficulty.

POS or Proof-of-Stake

In this paragraph, Binance Smart Chain operates on a Proof-of-Stake consensus algorithm. The blockchain uses a random selection process to find which node validates a block. The algorithm selects the node based on factors like the node’s wealth, its chance and the stake’s age.

In BSC, the users put their BNB on the line to try and become validators. The logic here is that if the algorithm selects a specific node, users earn a transaction fee.

BSC combines delegated PoS and proof-of-authority to reach network consensus and achieve blockchain security. BSC operates in a distributed manner as Binance retains total control over the blockchain.

Understanding wallets and BSC

Any user on the Binance Smart Chain can choose from several crypto wallets that suit their preferences. Here are the most popular wallets in use on the blockchain

Trust Wallet

Trust Wallet is one of the most secure crypto wallets available on mobile. It provides users with the benefit of earning interest in the wallet and can store NFTs and collectibles. Decentralized apps like PancakeSwap enable users to use Binance Smart Chain alongside the Trust Wallet.

Binance Chain Wallet

However, Binance Chain Wallet is another reliable choice when searching for a crypto wallet on BSC. A user can access the wallet through a browser extension available on Chrome and Firefox.

MetaMask

MetaMask is an Ethereum wallet; however, users can still link it to BSC. This compatibility assures that the users can enjoy the familiarity of BSC with the security Ethereum wallets provide.

Decentralized apps on the Binance Smart Chain

The development of Dapps on BSC saw incredible results taking place. For instance, users see PancakeSwap as the preferred choice for AMM development on BSC, while Uniswap and Sushiswap enable users to swap tokens on the Ethereum blockchain.

Another notable Dapp is Autofarm. The app acts as a yield aggregator and finds an ideal way to earn interest on their deposits. BurgerSwap is another Dapp that takes the role of an automated market maker on BSC.

Another enticing app for Binance Smart Chain developers is Cream. This app enables users to lend and borrow tokens. Cream exists on Ethereum, but its compatibility with BSC allows users to transfer the Dapp to the blockchain.

Spartan Protocol is another interesting Dapp available for BSC users. Here, users can make significant volume liquidity for the BEP 20 token.

Conclusion                                                                     

In conclusion, The backing of Binance ensures BSC can establish itself as a beneficial alternative for an Ethereum-dominant decentralized financial market.

Every day, developers build decentralized apps on BSC, which attract more users to the site. This growth means the ecosystem benefits and leads to the development of more Dapps for the BSC network.

BSC’s interoperability with Ethereum, the low transaction fees, and fast transaction speeds could make the platform the market-leading Binance Smart Chain token development. 

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