DEFINITION
Binance Smart Chain (BSC) is a blockchain network built for running smart contract-based applications.
Binance Smart Chain is designed to work in parallel with Binance Chain, which is the native blockchain of the Binance ecosystem.
- Smart Contract Functionality: BSC enables the creation and execution of smart contracts, a feature that Binance Chain lacks. This makes BSC a suitable platform for decentralized applications (dApps) developers.
- EVM Compatibility: BSC is compatible with Ethereum Virtual Machine (EVM), allowing developers to port their Ethereum dApps over to BSC easily.
- Performance and Scalability: BSC boasts high performance and scalability, with a block time of about 5 seconds. It's designed to offer a high throughput, which is the number of transactions processed within a certain period.
- Cross-Chain Compatibility: With its dual-chain architecture alongside Binance Chain, BSC enables cross-chain communication and transfers, allowing users to transfer assets between Binance Chain and Binance Smart Chain.
- Cost-Effectiveness: Transaction fees on BSC are significantly lower compared to those on Ethereum, making it a cost-effective choice for users and developers.
- Native Token: The native token of BSC is Binance Coin (BNB), which is used for transaction fees and other functionalities within the Binance ecosystem.
- Consensus Mechanism: BSC uses a consensus mechanism known as Proof of Staked Authority (PoSA), which is a combination of Proof of Authority (PoA) and Proof of Stake (PoS) mechanisms. This mechanism aims to maintain a balance between decentralization, speed, and security.
- Community: BSC has fostered a thriving community of developers and users, partly due to its compatibility with Ethereum-based tools and dApps, which has led to the creation of numerous projects on its platform.
- Bridging to Other Blockchains: BSC facilitates interoperability with other blockchains through the use of cross-chain bridges, enabling assets to be moved between BSC and other networks.
- DeFi and NFT Projects: BSC has become a hub for many decentralized finance (DeFi) and Non-Fungible Token (NFT) projects due to its low transaction fees and high performance.
Binance Smart Chain has rapidly gained popularity in the cryptocurrency and dApp development communities due to its low fees, high performance, and interoperability features, making it a strong competitor to other smart contract platforms like Ethereum.