Binance Smart Chain

What Is The Binance Smart Chain(BSC)?

Binance Smart Chain (BSC) is a blockchain that runs concurrently with the Binance Chain. In comparison to Binance Chain, BSC supports smart contracts and is compatible with the Ethereum Virtual Machine (EVM). The design aim was to preserve Binance Chain's high throughput while including smart contracts into its ecosystem.

In essence, both blockchains coexist. It's worth mentioning that BSC is not a solution for so-called layer two or off-chain scaling. It is a self-contained blockchain that would continue to operate even if Binance Chain went offline. Having said that, both chains share a strong design resemblance.

Due to BSC's EVM compatibility, it began with support for Ethereum's vast ecosystem of tools and DApps. In principle, this simplifies the process of developers migrating their applications from Ethereum to Bitcoin. This implies that users may easily configure apps such as MetaMask to function with BSC.

What Is BNB?

BNB was established in 2017 as a utility token for discounted trading fees, but its usage have expanded to include transaction fees (on the Binance Smart Chain), travel bookings, entertainment, online services, and financial services.

How Does It Work?

Binance Smart Chain utilizes a Proof-of-Stake consensus mechanism to reach 3 second block timings. It does it through a process called Proof of Staked Authority (or PoSA), in which participants stake BNB in order to become validators. If they propose a valid block, they will be compensated for the transactions contained within.

Contrary to many other protocols, there is no block subsidy for newly created BNB, as BNB is not inflationary. On the contrary, the quantity of BNB continues to decline with time, as the Binance team burns coins on a daily basis.

Binance Smart Chain was envisioned as a stand-alone solution that complements the existing Binance Chain. Dual-chain architecture is employed, with the goal of allowing users to transfer assets easily between blockchains. Thus, Binance Chain enables quick trading, while BSC enables the development of sophisticated decentralized applications. Through this interoperability, customers gain access to a huge ecosystem capable of supporting a wide variety of use cases.

Binance Chain's BEP-2 and BEP-8 tokens can be exchanged for BEP-20 tokens, the new standard introduced for Binance Smart Chain. Have you read Getting Started with ERC-20 Tokens? Then you're already familiar with the BEP-20 format. It performs the same functions as Ethereum.

To transfer tokens between chains (i.e., BEP-2 to BEP-20 or vice versa), the most straightforward option is probably to use the Binance Chain Wallet, which is available on Chrome and Firefox.