Advantages and disadvantages of Binance Smart Chain (BSC)

Binance Smart Chain is a BlockChain technology project that copies the code identically to the Ethereum network. Although it is initially a copy the Ethereum network, it features higher speed and lower cost per transaction.

Advantages and Disadvantages of Binance Smart Chain

Although it is a platform that includes blockchain technology this is governed by third parties, that is to say it is a private company who controls the project.

Binance Smart Chain (BSC) is a blockchain that runs in parallel to Binance Chain. Unlike its predecessor, BSC features Smart Contratcts implementation and is compatible with Ethereum Virtual Machine (EVM). The design goal was to keep Binance Chain’s performance intact, thus maintaining its integrity while introducing new changes such as the implementation of smart contracts into its ecosystem.

Benefits of Binance Smart Chain:

  • Interoperability with the Ethereum network. Supports the BEP-20 token standard. in the same way that it supports Ethereum’s ERC-20 tokens. BEP-20 focuses on easy implementation of tokens on DeFi protocols.
  • Facilitated implementation of tokens on DeFi protocols.
  • Ease of creating decentralized applications (DApps),one of the goals BSC has is that developers can make their project directly from the network itself.
  • Transactions cheap, transactions on this network are quite cheap relative to its direct competitor Ethereum.
  • Relatively constant transactions, gas prices on transactions within the BSC do not tend to vary in times of congestion on the network itself.
  • Faster adoption speed, Binance has an already established user base from which it can attract exponentially more users to Binance Smart Chain. So the adoption of its blockchain occurs under the backing of the Binance entity
  • BNB reflects deflationary nature, this is a positive point in principle although it has the exception that it is managed by a highly centralized for-profit company

Disadvantages of Binance Smart Chain:

  • The network presents quite a lot of centralization, as it is controlled by the Binance company, so its operation depends on the decisions made by the company itself.
  • Not everyone can be a validator node. All nodes must be pre-approved by Binance, currently there are 21 validator nodes. So it represents a centralized structure. The requirements are quite high so it cannot be just any validator node.
  • Innovation does not take place in BSC. Innovation takes place in the Ethreum network, so the BSC network does not take the lead in implementing new projects is dedicated to include technology previously introduced in Ethereum. Therefore, Binance relies on Ethereum innovation.
  • Collaboration with governments, Binance does not follow the precepts of anonymity and decentralization to the letter. The company usually collaborates with governments as long as it only affects users’ sensitive information.
  • Saturation in the network, being one of the most popular networks for beginners welcomes a large number of users so that sometimes the network is congested.
  • Binance controls or owns at least 50% of BNB’s supply. As a result, Binance will closely determine the fate of the BNB cryptocurrency and not so much the everyday users themselves.