Binance Smart Chain BSC is a blockchain platform that operates in parallel with binance chain the native blockchain of Binance which is the world’s largest cryptocurrency exchange based on trading volume. BSC aims to provide a rapid, secure and scalable atmosphere for decentralized applications DApps and smart contracts while maintaining compatibility with Ethereum.
What is Binance Smart Chain?
Binance smart chain is a dual-chain architecture that enables users to transfer assets between binance chain and Binance smart chain seamlessly. Binance chain is optimized for ultra fast trading and high output while binance smart chain supports smart contract functionality and interoperability with Ethereum.
Binance smart chain is constructed on a Proof-of-Staked-Authority PoSA consensus mechanism which combines the features of Proof-of-Stake POS and Proof-of-Authority POA. POSA allows faster block times around 3 seconds and lower transaction fees around $0.01 than Ethereum while also ensuring security and decentralization through a network of 21 validators.
Binance smart chain also supports the Ethereum Virtual Machine (EVM) which means that it can operate any Ethereum-compatible DApps and smart contracts without any modification. This simplifies the process for developers and users to migrate from Ethereum to Binance smart chain or use both platforms simultaneously.
How Binance Smart Chain Works?
Binance smart chain employs a cross chain bridge called Binance Bridge to enable the transfer of assets between binance chain and Binance smart chain. Users can exchange their tokens from one chain to another through a straightforward interface on the Binance website or app. For example users can exchange their BNB tokens from binance chain to binance smart chain and vice versa.
BNB is the native token of both binance chain and binance smart chain. It serves as the gas fee for transactions and smart contracts on BSC as well as the staking reward for validators. BNB also has various use cases on the binance ecosystem such as paying for trading fees, participating in token sales and accessing exclusive services.
Binance Smart Chain also supports other tokens that are pegged or wrapped from other blockchains such as BTC, ETH, USDT, BUSD etc. These tokens are called BEP-20 tokens which follow a standard similar to ERC-20 on Ethereum. BEP-20 tokens can be utilized on any DApps or smart contracts on BSC as well as exchanged on decentralized exchanges (DEXs) such as PancakeSwap.
What is BNB Token?
The BNB token serves as the utility token for both Binance Chain and Binance Smart Chain. It has multiple use cases such as paying for transaction fees, staking for network security, participating in governance voting and accessing various decentralized applications and services on both blockchains. Binance users can benefit from discounts on trading fees and other perks.
The total fixed supply of BNB is 200 million tokens with 100 million being sold in an initial coin offering ICO in 2017 and the other half allocated to the Binance team. Binance has committed to gradually reducing the total supply by burning 50% of the tokens over time based on its quarterly profits until only 100 million BNB tokens remain.
Advantages of Binance Smart Chain – BNB Token Benefits
Binance smart chain offers several advantages over other blockchain platforms such as –
High performance – BSC can process around 300 transactions per second (TPS) compared to approximately 15 TPS on Ethereum. This means that transactions on BSC are faster and more reliable.
Low cost – BSC has significantly lower gas fees than Ethereum making it more affordable for users and developers to interact with DApps and smart contracts. The average gas fee on BSC is around $0.01 while on Ethereum it can reach up to $100 or more.
Compatibility – BSC is entirely compatible with Ethereum meaning that it can run any Ethereum-based DApps and smart contracts without any modification. This gives users and developers more options to choose best platform for their needs.
Innovation – BSC supports a vibrant and growing ecosystem of DApps and projects across various sectors such as DeFi, NFTs, gaming and social media. Some of the most popular DApps on BSC include PancakeSwap, Venus, BakerySwap, ApeSwap etc.
Support – BSC receives support from Binance the leading exchange and cryptocurrency ecosystem in the world. This implies that both users and developers can benefit from the vast resources, expertise and community of Binance.
Binance smart chain is a blockchain platform that aims to provide a swift, secure and scalable environment for decentralized applications and smart contracts. It is compatible with Ethereum and accommodates various tokens and projects across diverse sectors. Moreover it delivers economical transaction fees and exceptional performance compared to other platforms. If you want to explore the possibilities of BSC you can commence by generating a wallet and interchanging your tokens using Binance Bridge.
