BSC works hand in hand with Binance’s native Binance Chain (BC), giving users the best of both worlds: BC’s massive volume of transactions and BSC’s smart contract capabilities.

Binance Smart Chain also implements the Ethereum Virtual Machine (EVM), letting it operate Ethereum-based apps like MetaMask.

The platform’s purpose is to make it easier for developers to construct decentralized apps (DApps) and for users to handle their assets throughout several blockchains with high speed and low capacity using the platform.

As a consequence of Ethereum’s congestion and gas tax issues, Binance Smart Chain has gained tremendous popularity in early 2021, which has driven developers and stakeholders to look for alternative options. To offset Binance Coin’s price spike to over $300 in February, the BSC community reduced the network’s gas tax from 15 Gwei to 10 Gwei, making it even more enticing to new users as a cost-effective and reliable alternative.

What Is Binance Chain (BC) and How Does It Work?

Binance Chain (BC) is a blockchain that Binance created with the goal of providing a decentralized exchange (DEX) for crypto assets. BC (DPoS) relies on Tendermint’s BFT consensus and delegated proof-of-stake. We can say that it’s primarily based on Tendermint and Cosmos SDK branches.

What Is Binance Coin (BNB) and How Does It Work?

Binance Coin (BNB) is BC’s native coin, which was first released as an ERC-20 token in July 2017. Transactions on BC burn BNB tokens every three months, according to a fee schedule. Burns will continue until the supply reaches 100 million, starting with a maximum supply of 200 million. BNB is really a BEP-2 token, and that is the native token of BC.

BNB is being used to pay for processing fees on BC, new asset issuance fees, minting and burning expenses, and more as the native token. BNB is also used to allocate authority validator staking and to fuel the BSC.

What Would be Binance Smart Chain (BSC)?

Here are a few of BSC’s characteristics:

Blockchain technology is self-contained

Binance Smart Chain is an independent blockchain that works in tandem with BC. This means that even if BC shuts down, BSC will continue to carry out its administrative and technical responsibilities.

Smart contracts which are Ethereum-compatible can be created with the Ethereum-Compatible BSC. Developers may use this capability to easily create and share utilities, DApps, and other ecosystem parts on the BSC network.

Stakeholders and community-based governance are supported.

The platform is based on a proof-of-stake consensus approach, especially proof-of-staked-authority. BSC’s native currency, Binance Coin (BNB), may be staked to improve platform security and also vote on community regulation processes. Its proof-of-stake (PoS) model also allows it to process transactions more quickly, putting it ahead of networks that still use full proof-of-work (PoW) systems.

Even though BSC is not a layer 2 solution, it is possible for BC and BSC to interact with each other (as it is an independent blockchain, parallel to Binance Chain). Users may now easily move their bitcoin between BC and BSC.

Proof-of-Staked-Authority

BSC achieves network consensus and blockchain security by combining delegated PoS with proof-of-authority (PoA). PoA is famous for its ability to defend against 51 percent assaults and its resistance to Byzantine attacks.

In this architecture, validators are chosen and take turns validating transactions on the network. They are also responsible for producing blocks in a PoA way, which considers their stake and reputation in the community. To become a validator, you first must stake BNB.

BSC can reach block durations of roughly three seconds because of its consensus approach. The trading fees incurred in a validator’s suggested block are rewarded if it is added to the blockchain.

Validator Quorum

A secure BSC network and a validator quorum go hand to hand. BNB stakers pick 21 validators to operate on the blockchain every day. Anyone can run for the validator, however, for the next validator set, only the top 21 highest-staked nodes will be chosen.

Validator setups can update the BSC network as desired throughout the platform’s “epoch” phase. Each epoch period is made up of 240 blocks that take 20 minutes to finish.

To prevent hostile actors from verifying erroneous transactions or duplicating signatures, BSC uses “slashing.” Slashing is a technique for recognizing and making an attacker’s attempts more costly.

Binance Coin (BNB)

BNB is the native utility token of the Binance ecosystem, and it may be used for both BSC and BC. BNB is primarily used to pay for staking, transaction fees, and asset transfers on the BC and Binance DEX systems. On BSC, BNB can be utilized to execute smart contracts.

BNB may be staked on a smart contract by people who wish to contribute to network security or receive additional BNB incentives. Users are able to delegate their stake to a BSC validator of their choice and enjoy its benefits.

Furthermore, validators have the ability to choose how much of the BNB earned from gas fees are transferred to their delegators.

Other Tokens That Are Supported (BEP2, BEP8, ERC-20)

Both BC and BSC tokens are supported by BEP2 and the future BEP8 specifications. The BSC blockchain accepts ERC-20 tokens, often known as BEP2E tokens. More identifiers on an asset, such as owner address, token denomination, and decimal precision specification, may be added to “improve” ERC-20 tokens on the platform. “Token binding” is the term for this.

When you look at the BC’s platform, you’ll find that tokens (sometimes known as “peggy coins”) have been issued that are tied to the native token. The BSC network accepts these tokens as well. This enables developers to design DApps that offer trustless cross-chain trading, the same as what PancakeSwap did on their platform.

Without mentioning the PancakeSwap trade, BSC’s growth in 2021 would be incomplete. The BSC-based decentralized exchange has experienced significant growth in 2021, both in terms of trading volume and its governance token CAKE, with the total value locked on the exchange increasing from $150 million on January 23 to $2.5 billion at the start of March 2021. As of the time of publishing, PancakeSwap had surpassed Ethereum’s UniSwap as the second most popular DEX.

Staking BNB

Staking is the process of depositing one’s “bonded” tokens inside a staking pool by BNB holders. They then have the option of selecting a validator or candidate to acquire their tokens. As soon as the election for the new validator set begins, they can re-delegate their tokens to another validator.

Validators who were chosen have the authority to give their delegators their blocking reward.

BSC implements its staking mechanism on BC to enable this functionality in order to remain compatible with Ethereum. This means that token bonding and delegation take place on the BC network rather than the BSC network.

Final Thoughts on Binance Smart Chain

For cryptocurrency users, the Binance Smart Chain provides a low-cost and rapid DApp platform. It’s no surprise that on February 9, 2021, the number of daily unique active wallets surpassed 50,000, and the overall transaction volume surpassed $15 billion.

We may expect to see growing acceptance of more cheap alternatives like BSC, Polkadot, and Cardano as long as the most popular smart contract-based blockchain, Ethereum, continues to struggle with congestion, and sluggish transaction rates, and excessive transaction fees.

Latest Coins on BSC: https://bsc-coins.com/