Binance unveils the smart contract-based blockchain and says there is no rivalry with Ethereum.
The cryptocurrency exchange announced Friday 17 that the new Binance Smart Chain (BSC) would function as a smart contract level that runs parallel to its current Binance Chain.
- As noted in a whitepaper released by Binance on April 17, 2020:
"The first practical and widely-used smart contract platform is Ethereum. To take advantage of the relatively mature applications and community, BSC chooses to be compatible with the existing Ethereum mainnet.
It also states that the new blockchain has a matching engine capable of performing fast commercial executions and a new consensus mechanism designed to combine quick confirmation times with strong chain governance.
Although Binance does not explicitly state that BSC is an Ethereum rival, it suggests in the white paper that the new level of smart contract could work better on several key metrics.
A high-performance blockchain that could compete with Ethereum?
First, its low latency platform will have faster runtimes. Then, its consensus mechanism - a hybrid between EOS delegated proof-of-stake (dPoS) and a proof-of-autority (PoA) system - is designed to be more efficient and environmentally friendly than proof-of-work by Ethereum (PoW).
It is worth noting that Ethereum will soon move to PoS, via an update known as Ethereum 2.0. In addition, in a statement, a spokesman said that BSC was designed to ensure that dapps can scale while still running on a high-performance level to ensure "a fast and fluid user experience."
This could give an advantage over Ethereum, where scalability limitations have sometimes created bottlenecks that have led to soaring transaction fees and extended confirmation times. For example, the game CryptoKitties quickly became so popular that it managed to put a strain on the net.
A port on Ethereum to facilitate the transition to BSC
Binance, which withdrew its Binance Coin listed token from Ethereum in 2019, denies that it wants to rival the original "world computer". On the contrary, Binance's spokesman said the two would complement each other in the growth of the blockchain ecosystem: "The industry needs more high-performance infrastructures, not a single blockchain."
Binance also wants to make BSC fully compatible with Ethereum. As he says in his white paper, it would give the new level of smart contracts direct access to an ecosystem full of "relatively mature communities and applications".
One of the main problems that has annoyed other smart contract protocols is that it can be devilishly difficult to convince existing users to move away from Ethereum. The process can be long and complicated: the development teams need to familiarize themselves with a new protocol and code base.
In the end, there is no guarantee that existing users will follow them into the new chain. But by building a port directly on Ethereum, Binance could try to make the path easier by facilitating the passage of protocols to projects.
As the exchange says in its white paper, being fully compatible means that "most dApps, ecosystem components and [Ethereum] tools will work with BSC and will require zero or minimal changes." After all, BSC's motto may be factual: "What have we got to lose?"
