Pros & Cons of Binance Chain & Binance Smart Chain (BSC) - Read This Before You Invest In BNB
Binance is the biggest cryptocurrency exchange in the world in terms of volume and no of users. They have created Binance Chain (BC) in 2018 to scale Crypto Trading activities. In 2020, Binance Smart Chain (BSC) was launched parallel to BC. If you want to know more about how BC & BSC work, please check out this crypto guide: What is Binance Coin (BNB)? - Binance Coin Guide.
In this blog, we are going to look at some of the major PROs and CONs of Binance Chain & Binance Smart Chain. At the end, I will try to answer whether one should invest in Dogecoin in 2021 or not.
Binance Chain PROs
- Performance: Binance Chain supports Binance Dex, used by millions of Crypto Traders all over the world. The blockchain provides quick transactions with low fees and high liquidity.
- Startup Boost: Binance chain provides a great platform for ICOs and Tokens to kick things off with ease. Crypto startup funding new token liquidity can be managed through Binance DEX supported by the Binance chain.
- Customer Support: Binance has strong customer support teams dedicated to fixing customer issues. Crypto is quite new, people make mistakes and lose their funds. Having 24x7 professional support at your disposal is worth it.
- Brand Image: Binance has established itself as one of the biggest & most trusted crypto brand in the world. The community is huge and quite active on social media. It's not just an exchange but a global blockchain company that is setting foot into all kinds of crypto trends.
Binance Chain CONs
- Centralization: With speed, security, and ease of use come centralization. Most of the Binance Chain top validators are directly or indirectly owned by Binance. Hence we cannot say it is fully decentralized.
- No Smart Contracts: Binance chain is used for trading but smart contract functionality is not available, that's why they also created Binance Smart Chain
Binance Smart Chain PROs
- Smart Contracts: Binance Smart Chain is a fork of Ethereum with some changes. Hence it has smart contract functionality and compatibility with Ethereum Virtual Machine. It's perfect to host DeFi & NFT applications.
- Interoperability: BSC and Binance chain are running parallelly and they are interconnected. It means that users can easily transfer their tokens from BSC to Binance chain and vice versa. Also, BSC is an independent chain that will run even if Binance Chain stops.
- User Experience: BSC has better speed and low gas fees as compared to Ethereum. While Ethereum kills the user experience with high congestion and gas fees, Binance is able to squeeze in more transactions in one block.
- Adoption: Since it is an exact copy of Ethereum and compatible with EVM, Ethereum based DApps can easily switch to BSC. There are multiple cross-chain bridges available by Binance and other third parties which makes the transition quite easy.
- Community: Apart from high performance and better User Experience, Binance has a huge user base that provides enough support to their new projects. Binance's community is one of the biggest reasons for BSC's success. BSC has already flipped Ethereum in a number of transactions.
Binance Smart Chain CONs
- Centralization: Just like Binance chain, BSC is also centralized. It used PoSA (Proof of Staked Authrority) mining in which 21 validators are required to keep the chain online. Most of the Binance Chain top validators are directly or indirectly owned by Binance.
- Dependence On Ethereum's Dev Community: Binance Smart chain is heavily dependent on ethereum's dev community which means not much innovation is happening on BSC but it is carry forwarded from Ethereum.
- Security: Since BSC is centralized, it is prone to hacks and 51% of attacks and also system failures since network validators are required to be approved by Binance's internal team.
Should You Invest In BNB In 2021?
BNB, the native token of Binance Ecosystem, is used for Gas fees, Governance, Trading Fees, etc. It has several use cases and it's not just a utility token anymore. Since the inception of Binance Smart Chain, BNB price has seen an uptrend and gained more than 800% as compared to the starting of this year. Due to crypto trading boom in 2021 after BTC reached its all time high, trading volumes of Binance has increased. Since many users like to pay fees in BNB, demand for the coin has grown.
BNB's market cap is growing due to growing interest in DeFi and NFTs. Apart from these, one of the major reasons for BNB is an attractive investment is the quarterly burns. Binance uses around 20% of its quarterly profits to buy and burn BNB.
So should you invest in BNB in 2021? Yes, BNB is backed by one of the biggest crypto & blockchain brand in the world. Ethereum's transaction fees continue to be high and DeFi space is continuously growing. Due to the increasing popularity in crypto, more and more people are joining this space and Binance is becoming their first choice of entry. Hence, BNB seems like a lucrative investment in the short term as well as long term.
What is @crypto-guides?
It's an initiative by @forexbrokr to drive organic traffic to the leofinance.io domain through long-form, SEO-optimized posts featuring high-volume keywords. The goal for this project is to eventually have a leofinance.io based crypto guide for every single coin or decentralized project in existence through user-generated content. Go and check out both the Hive guide and Bitcoin guide that they already published with contributions from the community members.
Participate & Earn Leo Tokens
You can earn crypto (LEO) by contributing to the latest guides about crypto. Learn more: https://leofinance.io/@forexbrokr/introducing-leofinance-crypto-guides
Posted Using LeoFinance Beta
Wow... i can evem say the advatages here even supercede the disadvantages.
Thanks for sharing this post. I learn a lot from it
You are most welcome @abimbola753. Glad you liked it & learned something new.
Posted Using LeoFinance Beta
When we start to dive a bit deeper into Binance Coin and its associated blockchains' pros and cons, the issue of centralisation keeps popping up.
BSC may look like a blockchain on the surface, but with the Binance head office essentially influencing all validators on the network, it's not a decentralised blockchain in its true sense.
While BSC is currently faster and cheaper than Ethereum, making it more appealing to crypto n00bs, I don't think it will ever surpass Ethereum because it may as well be a Binance database.
Just my 2 cents.
Posted Using LeoFinance Beta
Yes, BSC is highly dependent on Ethereum's success & it is centralized. It will co-exist as a cheaper and faster alternative with others like Polygon, Cardano and Polkadot. BSC has a big brand associated with it which is an added advantage for BNB holders.
Posted Using LeoFinance Beta
The level of centralization on BNB and bsc is what I don't like on this one. Overall it's a decent one that can get better overtime
Yeah, that's true. Binance Chain & BSC, both are centralized. Which will be a roadblocker for many in the future. Right now ease of use & adoption is the priority.
Posted Using LeoFinance Beta
We have centralization in everything we use daily, so BNB is mainly capitalizing on low fees and user friendliness and easiness of things. They already had a big community that backed it's success.
Posted Using LeoFinance Beta
That's true. This is the reason why I think BNB will continue to go up. Today they have launched their NFT marketplace too. Time to buy more BNB? ;)
Posted Using LeoFinance Beta
The flaw of the gignte is in its very purpose, it could also be said that as it is very easy to enter many people can get scammed with shitcoins that can promise a lot of money.
Posted Using LeoFinance Beta
Yeah. There are a lot of shitcoins that are being sold on Binance. While it's great for adoption, it also gets newbies rekt very easily.
Posted Using LeoFinance Beta
I fell for it 2 months ago, and I thought I was being the best investor hahaha. Well lessons I learn on my way
Posted Using LeoFinance Beta
Haha. No problem bro. I hope you didn't lose much. Just HODL it for a few more months and see where it ends up.
Posted Using LeoFinance Beta
I think you could arguable add CZ under the cons list. After all he was implicant in helping JS with his hostile takeover of STEEM.
I believe the Polygon Network will emerge as a viable alternative, similar EVM compatible dev environment, actually decentralized.
Posted Using LeoFinance Beta
Haha JS is a scammer and anyone helping him is nothing different.
100%. I also believe that Polygon is going to solve the scalability & user experience issues of Ethereum better than BSC or any other chain. Ethereum's Dev community is huge and most of them are now choosing polygon over others.
Posted Using LeoFinance Beta