September 29, 2021
Ethereum has shown us that it isn’t yet suited for mass adoption. At times of heavy use, the network becomes congested and transactions are costly and slow, processing only 20-30 transactions per second (TPS) with its current architecture.
That’s why alternatives have shown up in the market – other smart contract-capable blockchains with higher TPS rates. The biggest one so far is Binance Smart Chain (BSC), developed by Binance.
What is the Binance Smart Chain?
BSC is a smart version of another blockchain, the Binance Chain (BC). BC was created in 2019 to support the Binance DEX, the company’s proprietary decentralized exchange.
It was in 2020, as DeFi protocols began exploding on the Ethereum blockchain, that developers of the Binance DEX noticed the limitations of BC. It could support tokens and trades, but couldn’t host smart contracts as effectively.
That’s why Binance launched BSC, which does have smart contract support. It also has Ethereum Virtual Machine (EVM) compatibility, high transaction throughput and a block confirmation time of around three seconds.
BSC can handle 55 to 60 TPS on average, and also has much lower fees than Ethereum.
BSC’s EVM compatibility means that developers can easily integrate Ethereum-built protocols into BSC. Interfaces like MetaMask can also be adapted to support dapps and tokens created on the new chain.
Which wallets are BSC-compatible? Binance itself recommends MetaMask, MathWallet, and Binance Chain Wallet for browser extensions. For those who prefer a mobile experience, Binance recommends MetaMask, MathWallet, Trust Wallet and SafePal.
BSC protocols can use one of two token standards – BEP-20 and BEP-721. These are just like Ethereum’s ERC-20 and ERC-721 token standards, creating fungible and non-fungible tokens respectively.
BSC was built as a parallel chain to BC, but it’s entirely independent. Tokens can be bridged between the two, and if BC fails or goes offline, BSC will keep working as usual.
When was BSC created?
The development of the Binance Smart Chain was really fast. It was first announced in April 2020 and went live only five months later, on September 1. Most of its features are similar to those of Ethereum, but modified to achieve the required throughput.
Barely a year after its launch, BNB, the BSC token, is already positioned as a contender to ETH in terms of market capitalization. It’s already surpassed Ethereum in levels of activity and has fostered the creation and migration of many DeFi protocols.
How far can BSC go?
BSC has grown very quickly, partly due to its features and partly due to the fact that Binance is one of the biggest cryptocurrency exchanges in the world.
However, at the time of writing, Ethereum hosts more than 3,000 dapps while BSC holds 493. This is a clear disparity, but when considering the young age of BSC, it demonstrates a robust and promising network.
Active addresses are also an essential on-chain metric to consider. Despite being a newer blockchain, BSC marked a high of 2,105,367 addresses on June 7, 2021. This surpasses Ethereum’s all-time high of 799,580 addresses on May 9, 2021.
Pancakeswap, an AMM DEX similar to SushiSwap and Uniswap, was created in the early days of BSC and it’s still the network’s main venue for trading tokens. Other protocols have also shown great growth – Venus, for example.
However, there are issues with BSC, and they come in the form of centralization. The fact that its development was conducted by a company makes it look like a private project, no matter how open-source it is.
Apart from this, it runs on a consensus algorithm called ‘Proof-of-Staked-Authority’, which uses only 21 nodes to validate transactions.
This setup enables high transaction confirmation speed, but also raises questions as to how trustworthy the network can be. Regular users can stake their tokens and delegate them to validators to earn rewards, but they don’t really get voting powers in return.
Kirobo may add BSC
Despite this issue, BSC is a very strong network with a lot to offer. In the coming months we can expect it to keep growing and hosting increasing numbers of dapps. As Ethereum’s upgrades go back and forth, BSC is a good choice for developers and users who don’t want to pay a fortune in transaction fees.
Kirobo intends to add BNB to its list of supported tokens, allowing its thousands of users to swap and send these tokens safely using the Undo Button and the P2P Swap Button.
With the Undo Button, a user who wants to make a transaction must create a password that they then give to the recipient, who needs to enter it correctly in order to receive the funds. If coins are sent to a wrong address, the owner of that address won’t be able to withdraw the money, and the user can cancel the transaction and retrieve the crypto.
The P2P Swap Button allows users to trade supported tokens supported with peers, at your own prices. This means that you won’t lose money to slippage or extra transaction fees.