In this post, we'll see How Binance Smart Chain Works. This is one of the section of the previously released Binance Guide.
Introduction
Binance smart chain has been viewed as an alternative to the Ethereum blockchain due to various features that are offered. A lot of DeFi apps and the Bridges to external blockchains have been built using the Binance smart chains.
In this post, we will see how does this smart chain works and what are some of the features of this blockchain.
What is Binance Smart Chain?
Binance smart chain is a blockchain developed by the Binance exchange. This smart chain has been developed to offer features set similar to the Ethereum and that can make use of both binanace virtual machine as well as the Ethereum virtual machine (EVM).
What does Binance Smart Chain offers?
Binance smart chain(bsc) offers various features into it's smart chain that allows secure transactions, decentralization, dApps and smart contracts support. It has the BEP-20 token protocol that works similar to the ERC-20 protocol and most of the ERC-20 dApps are easy to port on this protocol as well. Smart chain has the proof of stake consensus which makes it easy to do the transactions at much cheaper cost than the Ethereum.
How does Binance Smart Chain work?
Binance smart has been designed to offer features that could even surpass the ethereum blockchain. Here are some of the feature set that shows you how this smart chain works.
- Ethereum Compatibility : BEP-20 protocol was designed in such a way that it would be supporting the ERC-20 tokens and smart contracts too. So porting Ethereum based apps and the projects to the BSC would be easier.
- Lower Gas Fees : Ethereum has higher gas fees due to proof of work and the 2.0 upgrade yet to take effect on the prices. Binance smart chain has cheaper transaction costs and also offers it lot consistently.
- Cross-chain Interoperability: Binance smart chain can connect with other external blockchains and also it would be easier to connect other blockchain for bridges and the DeFi.
- Validator Quorum : Validators are required to run the Binance node and also you have to keep the 10,000 BNB at stake. Considering this is proof of stake algorithm running for this blockchain, it speeds up the transaction and also secures the network from the attack.
- Proof of Stake Authority: Unlike ethereum, the smart chain supports the proof of stake consensus on it's blockchain. This helps with security, transactions speed, less gas fees and consistent transaction fees.
Conclusion
Binance chain was developed to be Ethereum compatible however Binance Smart Chain (BSC) goes few steps ahead and reduce the amount of the issues with the Ethereum and tries to overcomes them. Not only that it offers ability to be compatible with Ethereum tokens and the dApps. In process there are many projects that developed it's own tokens on the BSC ecosystem leading to DEX projects like Pancakeswap, Cakeswap etc.
Binance smart chain in the quest to offer the solution towards Ethereum blockchains problem turned out to be creating it's own strong ecosystem where it's own use case and solution based dApps and DeFis are developed.