Blockchain technology has opened the world of finance to
an entirely new ideology: decentralized, secure, and
digital commerce. Binance Chain hit the cryptocurrency
exchange market in 2109. Now, only a year later, Binance
Smart Chain has launched and is seemingly changing the
industry. But, what is Binance Smart Chain? And, how will
it affect the future of blockchain technology?
To give you an idea of Binance and its current level in the crypto game, we’ll cover all of the basics about Binance Smart Chain and explore the concept of blockchain technology—including its potential in the future of finance.
Binance, the largest cryptocurrency exchange platform in
the world as of April 2021, was founded only four short
years ago in 2017. The exchange supports
more than 500 cryptocurrencies
and allows users to trade various commonly-sought options,
including Bitcoin, Ethereum, and Dogecoin. Binance even
launched its own native cryptocurrency, Binance Coin,
which can also be exchanged within the software. Binance
also offers a crypto wallet, where users can store
Binance launched its first blockchain, Binance Chain (BC), to provide a high-speed chain that would successfully support large transactions. Soon enough, however, Binance realized the chain wasn’t providing enough flexibility for users—BC couldn’t support smart contracts.
To maintain BC’s performance by not integrating smart contracts, the exchange platform looked to a new solution, and Binance Smart Chain (BSC) was born. BSC is designed to work parallel to BC, although it remains entirely separate. BSC offers smart contract capabilities and complete programmability for users.
Using an optimized version of Ethereum’s blockchain technology, BSC created a similar exchange platform that offers crypto advocates the opportunity to buy and trade currencies for low fees and higher transaction throughput.
Binance Chain Wallet
Binance Chain Wallet is the new and improved virtual wallet to store cryptocurrency and connect to various projects through different blockchains. It distinguishes itself by offering quick and easy linking to other digital wallets and eliminate the need to copy and paste addresses to transfer assets. Binance Chain Wallet allows users a single hub to access BSC, BC, and Ethereum cryptocurrencies.
Now, less than a year after its launch, BSC has proven itself to the cryptocurrency industry by having a nearly identical experience to that of the Ethereum blockchain, but with faster transactions and lower fees. Although BSC may seemingly have similarities to other blockchain technologies, it distinguishes itself in several ways. To provide a clear distinction, we’ll go over two of the most well-known blockchains in the industry today.
Both Bitcoin and Ethereum are based on the same blockchain technology, where users can have a secure, decentralized payment experience through a virtual network that records all transactions.
However, while Bitcoin is merely a currency that users can trade within the system, Ethereum is that, and much more. Ethereum is a ledger technology that businesses can employ to create their own decentralized apps and programs, making it more powerful and appealing.
Ethereum offers a decentralized finance solution, where no single owner controls the network. Instead, a myriad of validators ensures transactions—similar to Bitcoin’s mining experience. However, due to its considerable demand for smart contract abilities, Ethereum has begun lacking in transaction speeds and increasing transaction fees. BSC, on the other hand, has swooped in to take over the game.
BSC provides a decentralized finance experience only with
the benefits of a centralized network. BSC takes the best
of both and combines them into what its CEO calls
“CeDeFi,” centralized decentralized finance. To give users
lower fees and higher-quality performance, the new and
improved concept of Binance Smart Chain, out of
scalability necessity, requires a sacrifice in
Validating transactions within the chain works differently—while Bitcoin and Ethereum users can begin mining the currencies at any point themselves, BSC works on a Proof-of-Staked-Authority mechanism. In contrast to Ethereum and Bitcoin, BSC is somewhat centralized as its validators are authorized, and the blockchain is essentially controlled and managed by Binance itself.
BSC’s CeDeFi experience also allows users to transfer assets between blockchains as it works alongside Binance Chain and is compatible with Ethereum. Not to mention, users can create smart contracts in the system for a much lower cost than on Ethereum due to its semi-centralized network.
The blockchain industry is evolving considerably and has,
especially recently, become one of the most prominent
fields for constant innovation. It is an essential
creation to come out of the cryptocurrency industry as it
enables enterprises everywhere to automate finances and
other processes and develop and see smart contracts
through from beginning to end. But, what is the future
look like for blockchain technology?
As more and more improvements are made with blockchain development, estimations about its potential future uses have begun to pop up everywhere. Many assume that blockchain technology will eventually replace current government data distribution, easier collaboration and transparency between various industries and companies, identity verification, and a simpler and more traceable solution to the global economy.
A thoughtful innovation, Bitcoin Networks, recently launched in an effort to provide an environmentally friendly mining system by formulating a new type of blockchain. Bitcoin Networks will enable any and all users an opportunity to mine and earn rewards through day-to-day, already-owned and operational devices, including smart phones, personal computers, and even electric cars. That said, anyone can easily mine the new and improved blockchain without high-power or excessive energy consumption. While the work has only recently begun, Bitcoin Networks is a unique and time-consuming task. Although no promises can be made concerning its success, through user aid and smart chain technology, it’s hopeful Bitcoin Networks will give blockchain technology another chance with mineable tokens.
With its already-unquestionable efficiency and the lack of any middlemen, blockchain technology can offer the world a new solution to and open-source, traceable ledger that will allow users a more secure network for record-keeping. As it continues to advance, blockchain is likely to become the future of financial and economic success. And, among its significant benefits of both centralization and decentralization, Binance Smart Chain is seemingly the first step in the right direction.