Wednesday, October 5, 2022

What is BNB Chain?

The BNB Chain (formerly Binance Smart Chain) was created to promote quick and decentralized trade. It was agreed that the BNB Chain project would have a goal throughput by incorporating smart contracts into its ecosystem. Why Binance, the world’s largest cryptocurrency exchange, decided to back another blockchain even while it had its own blockchain platform were questions that sprang up. Was it just impossible to merge the two blockchains together? Also, when compared to Ethereum, the leading smart contract platform, how does the BNB Chain fare? We’ll find out in this article.

What is BNB Chain?

A year and a half after the debut of the Binance Chain (BC), the BNB Chain was published in September of 2020. The protocol provides a framework for programmers to use in order to create decentralized applications (DApps). Forked from Ethereum, BNB Chain offers all of the same capabilities as its parent blockchain while also being substantially faster and less expensive to use than the original.

It is worth mentioning that, rather than making improvements to Binance Chain, Binance elected to create a second blockchain as a result of the limitations of the first. According to the exchange, the addition of smart features to the Binance Chain would have hindered the network’s performance and reduced its overall efficiency.

The most viable alternative for Binance was to support the creation of a new blockchain that was compatible with Ethereum, the dominant decentralized application network, and also enabled smart contracts. For Binance, which was racing against the clock to capitalize on the Decentralized Finance (DeFi) and Non-Fungible Token (NFT) crazes, the thought of creating a new blockchain from the ground up sounded like a terrible idea.

How does it work 

There are 21 validators on the BNB Chain, who use a combination of Proof of Authority (PoA) and Proof of Stake (PoS) consensus techniques. This means that the block time will be shorter and the costs will be reduced. In the role of validators, those with the highest number of staking bonds will be the ones that create blocks and receive payment when their work is validated by the entire network. 

Due to the cross-chain compatibility of the BNB Chain and the Binance Network, users will be able to send data between the two chains. A primary goal of the platform is to provide low latency and high capacity transactions across several blockchains so that developers can build decentralized applications (DApps) and users can manage their digital assets. 

A lot of factors contribute to the popularity of BNB Chain among cryptocurrency enthusiasts and this includes;

  • EVM-compatibility.
  • It is designed for scaling high-performance decentralized applications, and it includes native dual-chain communication as standard functionality.
  • With PoSA’s distributed on-chain governance, you have the participation and decentralization of the whole community at your fingertips. As well as serving as a fuel for smart contract execution and a staking token featuring the native coin, Binance Coin (BNB).
  • High-speed transactions are made possible at a low cost to the network for network participants.

How to use Binance Smart Chain 

Create a Binance account 

You’ll need a Binance account in order to browse the DApps available in the BSC ecosystem. With a large number of trading tools and a variety of cryptocurrencies, Binance is a great place to start.

Keep in mind that the exchange’s Know Your Customer (KYC) verification process will need you to prove your identity. You may be required to link your bank account to the exchange in order to transfer fiat currency.

Buy BNB

BNB can be traded on the Binance marketplace against a variety of fiat currencies. A few clicks on a computer are all it takes to make a purchase. There will be a noticeable buy button on the screen once you have selected your basic pair. 

Verify your order after you’ve placed it, following an email confirmation of your registration to your email address. Check your junk mail bin if you don’t see any new messages in your inbox. The final step is to click the verification link in your email, and your transaction is processed in a moment.

Download a cryptocurrency wallet 

To withdraw your BNB from the exchange and interact with DApps running on BSC, you’ll need a cryptocurrency wallet with networking capabilities. MetaMask and Trust Wallet are two of the most widely used crypto wallets. It’s easy for each of them to fit into the BSC system. Your BEP-20 token should show up in your wallet as soon as the transaction is confirmed.

BNB Chain, like other blockchain networks, has its advantages and disadvantages, which are listed below.

Pros

With its lightning-fast transaction time, the BNB Chain is one of the most popular smart contract platforms available today, at least four times faster than Ethereum’s block generation time of 13 seconds. 

A minimum of 5 Gwei is required to finish a BNB Chain transaction, whereas an average of 40 Gwei is required to complete an Ethereum transaction, making the former very cost-effective 

Also compatible with the Ethereum virtual machine (EVM), BSC allows users to produce a large number of tokens for use on the Ethereum network through the use of smart contracts. Cross-chain compatibility increases the liquidity, usability, and value of tokens by allowing them to be traded between different blockchains. 

Cons

The most common criticism leveled toward BNB Chain is that the protocol is overly centralized. As in both BNB Chain and BC, the Binance cryptocurrency exchange is a major factor in their success. In order to facilitate the migration of Ethereum-based decentralized apps (dApps) to BNB Chain, Binance has gone to great pains to duplicate the Ethereum network.

BSC has therefore seen very little innovation outside of what is already available on the Ethereum platform. As long as Binance doesn’t make significant efforts in local innovation on the BSC network, it may continue to remain in the shadow of the Ethereum network. 

Conclusion

On the Binance Smart Chain ecosystem, there are presently 628 applications spanning AMM, NFT, Infrastructure, and Decentralized Exchange DEX. Due to its quick development and widespread community support, the BNB Chain has been dubbed the Blockchain of the Future. 

Recent months have witnessed substantial expansion in both the on-chain and BSC ecosystems, with the most intriguing advances occurring in the fascinating realm of decentralized finance. Aside from Uniswap, the second-largest decentralized exchange in the cryptocurrency business is PancakeSwap, thanks to its integration with the BNB Chain.

Ayo Alabi
Ayo Alabi is an experienced writer and Fintech enthusiast, passionate about educating people and helping businesses that want to see their Google search rankings surge. Her articles have appeared in a number of e-zine sites, with focus on balancing informative with SEO needs–but never at the expense of providing an entertaining read.

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