Binance Smart Chain (BSC) is a blockchain network of the Binance cryptocurrency exchange, designed specifically for smart contract applications. BSC is capable of working independently and together with Binance Chain, giving users the best of both systems, smart contract support, and high throughput.
How the BSC blockchain works
Binance Smart Chain was launched in 2020. The main goal is to develop decentralized trading, for which the developers had to make certain compromises. BSC was particularly successful in 2021. This was partly due to problems with Ethereum congestion, which forced investors and developers to look for new options.
The network enables users to quickly manage digital assets between different blockchains. BSC combines two algorithms, Delegated Proof-of-Stake (DPoS) and Proof-of-Authority (PoA), to maintain high security and achieve network consensus. With this model, the block validation time takes only 3 to 5 seconds.
A full-fledged environment for the release of decentralized applications is available on the network, and it is also possible to migrate already released applications from the Ethereum blockchain without significantly slowing down the system. The BNB token, developed for Binance Chain, is used to pay fees when issuing smart contracts. The token works on both networks in the same way that ETH works on Ethereum. Customers can use it to pay for smart contracts and to perform cross-chain transactions.
Features of Binance Smart Chain
Independence. Although Binance Smart Chain works together with Binance Chain, these are two independent blockchains. Even if for some reason Binance Chain ceases to function, BSC will not be affected and will continue to perform all of its functions, both technical and business-related.
Compatibility with Ethereum and BC. Binance Smart Chain is capable of supporting Ethereum-compatible smart contracts. With this feature, developers can create or transfer tools, applications, and other ecosystem components to the BSC blockchain.
Binance Smart Chain and Binance Chain communicate freely with each other, with BSC being an independent, parallel blockchain rather than a second-layer solution. Users can seamlessly move their cryptocurrencies between the two blockchains.
Community management, staking support. The network’s token BNB can be staked in order to participate in security and voting on community management protocols.
Binance Smart Chain enables faster and cheaper transactions than Ethereum. This motivates participants to actively try most of the existing protocols today, such as lending, pharming, etc. Developers have succeeded in creating competition in the field of DeFi, so the growth rate of the ecosystem will continue.
