Binance Smart Chain – BSC – is a blockchain system of cryptocurrency trading platform Binance. BSC is designed to provide high-performance infrastructure for decentralized trading, building dApps, interoperability between other blockchains, and compatibility with smart contracts and other DeFi products.
BSC was launched in April 2019 and launched on mainnet in September 2020. The Binance community came up with the idea of creating a cross-chain network where users can benefit from Binance Chain’s high performance and smart contract compatibility.
How BSC Works
Let’s get to know Binance Chain (BS) first. This network is home to BNB (Binance Coin) and where the community exchanges, spends and trades digital assets in a decentralized manner with high returns. Binance Smart Chain is here to extend Binance’s reach to DeFi developers looking for a powerful and efficient network.
Full compatibility with other blockchains
- BSC is not a build but a dual-chain system that supports many features of the DeFi universe such as: B. You can think of BSC as a complementary network to One feature that makes BSC an interesting option for developers is its full programmability and compatibility with the Ethereum Virtual Machine (EVM). This allows developers to transfer their projects from the ETH to the BSC. By implementing EVM, BSC has access to the many Ethereum tools and dApps, such as B. MetaMask.
- BSC takes advantage of interoperability to allow users to exchange some assets on the BEP-8 (a low-cost project for small projects) for BEP-20, which is a BSC standard token, via Binance DEX or Trust Wallet.
BSC uses a hybrid consensus is known Proof of Staked Authority (PoSA). This algorithm allows all participants to become validators by using their BNB coins. PoSA can be forked and requires more block acknowledgments than usual. Each validator can create a block; therefore, multiple blocks are needed to verify the data on Binance Smart Chain as the data cannot depend on a single validator.
Advantages & Disadvantages
BSC is basically a copy and paste of the ETH ecosystem, only with lower fees and a centralized system. As Ethereum’s high fees skyrocketed, many DeFi users flocked to the BSC system to benefit from Ethereum’s near-exact functionality but without spending expensive gas fees.
- Compatibility with
- Interoperability with Binance
- Smart Contracts and dApps support. Cross-chain communication and transactions.
- Centralization: Another issue to keep in mind is that BSC is highly centralized. There are only 21 community validators who control the network by providing computing power and hardware. Centralized systems are always vulnerable to system failures, attacks from malicious users, regulations, enforcement orders, or even hacks.