Binance Smart Chain and Ethereum are both popular blockchain platforms, but they have their own unique features and use cases. In this article, we’ll take a closer look at the similarities and differences between the two, to help you decide which one is the best fit for your decentralized application or token.
What is Binance Smart Chain?
Binance Smart Chain (BSC) is a high-performance blockchain that was launched in September 2020 by the popular cryptocurrency exchange, Binance. It is built on top of the same codebase as Ethereum, but with some key differences. BSC is fully compatible with Ethereum’s smart contracts, making it easy for developers to build decentralized applications (dApps) on top of it.
One of the main benefits of Binance Smart Chain is its low transaction fees. BSC uses a consensus mechanism called “Proof of Staked Authority” (PoSA) which is more energy-efficient than Ethereum’s “Proof of Work” (PoW) mechanism. This means that transactions on BSC are cheaper and faster than on Ethereum.
Another key feature of Binance Smart Chain is its high scalability. BSC can process up to 100 transactions per second, making it much faster than Ethereum, which can handle around 100.000 transactions per second.
What is Ethereum?
Ethereum is a decentralized, open-source blockchain platform that was first proposed in 2013 by Vitalik Buterin, and it was launched in 2015. It is the most popular blockchain platform for building decentralized applications, and it is also the most widely used blockchain for initial coin offerings (ICOs).
Ethereum’s main feature is the ability to create and execute smart contracts, which are self-executing contracts with the terms of the agreement written directly into the code. This allows for the creation of decentralized applications, or dApps, that can run on the Ethereum blockchain.
Like Binance Smart Chain, Ethereum also uses a consensus mechanism called “Proof of Stake” to validate transactions and create new blocks. However, unlike Binance Smart Chain, Ethereum’s current version can handle 100.000 TPS which is quite low.
Key Differences between Binance Smart Chain and Ethereum
- Transaction Fees: As mentioned earlier, Binance Smart Chain has much lower transaction fees than Ethereum due to its more energy-efficient PoSA consensus mechanism.
- Scalability: Binance Smart Chain is able to handle more transactions per second than Ethereum, making it a better option for dApps that need high scalability.
- Block time: Binance Smart Chain’s block time is faster than Ethereum, which means that transactions on Binance Smart Chain are confirmed more quickly.
- Decentralization: Ethereum is considered to be more decentralized than Binance Smart Chain because it is an open-source platform with a large number of users and developers, while Binance Smart Chain is relatively new and is mainly used by projects affiliated with Binance.
- Use Cases: Binance Smart Chain is mainly used for trading and liquidity pools and also for High-frequency trading or other high-performance dapps. Ethereum, on the other hand, is widely used for decentralized finance (DeFi) applications and for launching new tokens.
Both Binance Smart Chain and Ethereum are powerful blockchain platforms with their own strengths and weaknesses. Binance Smart Chain offers faster and cheaper transactions,