229
The Binance Smart Chain, (BSC), is a blockchain network built for running smart contract-based applications. It aims to lower transaction costs and provide a platform to create decentralized applications (DApps) and other DeFi products. The network runs parallel with Binance's native Binance Chain, (BC), allowing users to have the high transaction capacity of BC with the smart contract functionality of BSC. BSC also implements the Ethereum Virtual Machine (EVM), which allows the network to run Ethereum-based applications like MetaMask or Trust Wallet.
The rising congestion and gas fee costs on the Ethereum platform has been causing a spike in activity on BSC in 2021 thus far. Developers and staking investors do not want to pay an astronomical amount to move their crypto around, and BSC seems to be their first move. In this article, we will be taking a look at some notable attributes of BSC and why it's such a valuable asset today!
I am not sponsored by anyone or anything mentioned in this article.
This is not financial advice. I am not a financial advisor.
Please do your own research before making any decisions before investing.
This article is meant for educational purposes only.
I mentioned earlier that BSC runs parallel to with BC, the native blockchain of Binance. While this is true, BSC is a standalone blockchain. While operating with its' own set of software and coding systems, if the BC stops operating for any reason, BSC will continue to run all technical and business functions. BC and BSC can freely communicate with one another without friction, making it seamless for users to move their crypto between both platforms. This does not mean that BSC is a layer 2 solution... as BSC is independent and not built on top of BC.
The compatibility with Ethereum-based networks greatly increases the traffic on BSC and makes it more user-friendly. Smart contracts are supported and developers can either build or migrate DApps, tools, and other ecosystem components on the BSC network. A popular DApps utilized on BSC is PancakeSwap, allowing users to swap their crypto to either obtain a different token or stake their share.
BSC runs on a proof-of-stake (PoS) consensus model, specifically a proof-of-staked-authority model. BSC's native token, Binance Coin (BNB), can be staked to contribute to network security and offer voting on community governance protocols. This PoS model also allows the platform to process transactions faster and at a much more reasonable fee.
With the combination of both PoS and proof-of-authority (PoA) consensus models, this aims to maintain blockchain security and network consensus. Elected validators take turns in confirming transactions on the network. They are tasked to produce additional blocks in a PoA manner, putting the amount of their stake and reputation in the community both into consideration. To become a validator, all the user has to do is stake BNB.
A validator quorum is necessary to secure the BSC network. The blockchain validators are chosen every 24 hours. These 21 validators belong to the top 21 highest-staked nodes, granting them validator status. BSC implements "slashing" to disincentivize malicious actors from validating false transactions and/or double signing them. Slashing helps to expose an attacker and make their cyber attack astronomically expensive to execute. The validators on this consensus model achieve roughly 3 second block times and, if a block proposed by the validator is added to the chain, they will receive the transaction fees incurred in that block as a reward.
BNB is the BINANCE ecosystem's native utility token and can be used for both BC and BSC. Its' main functionality is to pay for transaction fees on the BC and Binance DEX platform, staking, and asset transfers (ie swapping BNB to BSC). BNB can also be utilized to run smart contracts on BSC.
BEP2 and BEP8 standards are both supposed on BC and BSC. ERC-20 tokens are available and supported on the BSC platform as well. You can actually enhance ERC-20 tokens on the platform by adding more identifiers to an asset. Token denomination, owner address, and decimal precision definition are a few ways the platform allows you to enhance your assets. This process is called "Token Binding".
If you've look through either the BC or BSC platform, you've probably noticed tokens that are pegged to a counterpart native token. These are called "peggy coins" and are supported on the BSC network. This is what allows developers to launch DApps that can facilitate cross-chain exchange trustlessly, like PancakeSwap.
With BSC being a standalone blockchain that offers a wide variety of services to everyone, it's no wonder why the network is being utilized more and more daily. A full-fledged environment for developing high-performance DApps and allowing for the exchanging between cryptos at a minimal fee, BSC is changing the way we view cross-chain compatibility. With the explosion of shitcoins, memecoins, and new developers looking to publish their own applications, the blockchain supports millions of users each day. I am excited to see where the adaptation of BSC goes and all the new additional features it will come with!
What's your favorite way to utilize BSC on a day-to-day basis?
Let us know in the comments down below!
Thanks so much for reading!
Please feel free to follow my page for daily blog posts about crypto news, updates, and research!
Have a wonderful day!
