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3 Main Differences between Ethereum and Binance SmartChain

3 Main Differences between Ethereum and Binance SmartChain

3 Main Differences between Ethereum and Binance SmartChain

Binance and Ethereum are quite similar at first glance, but what 3 differences make them completely different. In this article, we will look at these differences more specifically.

1. Binance Smart Chain is a sidechain of the Binance exchange

Formally, BSC is considered an L1 blockchain.

 

Binance Smart Chain is a fork of the Geth Ethereum client, which uses the Tendermint BFT consensus mechanism with 21 trusted validators instead of proof-of-work Ethereum 1.0. (You can also read the article Binance blockchain of the future)

 

The consensus on the state of Binance Smart Chain is formed by 21 persons affiliated with Binance in one way or another. These are the leaders of BSC. They can censor and cancel transactions. In a word, Binance Smart Chain is a centralized network and due to this, it achieves an increase in productivity.

 

There are many centralized networks, but BSC outshines its competitors due to access to the liquidity and volumes of the Binance exchange, as well as copying DeFi applications from Ethereum. BSC is a more open structure than Binance, which frees the hands of developers who can now create their applications there.

 

The centralized Binance network acts as a valve that relieves the load from the overloaded Ethereum and allows you to test financial applications cheaply.

 

2. BSC makes money for one company

Binance Smart Chain is a product of the Binance exchange. The profit generated by BSC goes into the piggy bank of Binance and shareholders.

 

This is the key difference from Ethereum, which has no owners. The earned profit is returned back to the ecosystem in the form of commissions to the manners and validator, to ETH holders after the activation of EIP1559, which should take place already in July 2021, or to developers.

 

The main goal of Ethereum 2.0 is to become a sustainably decentralized protocol that returns earned profits back to the ecosystem. (You can also read our article Ethereum 2:0)

 

3. BSC competes with the “Ethereum killers”

Interestingly, Binance Smart Chain has fulfilled a number of promises made earlier by the so-called “Ethereum killers”: scalability, low commissions, availability of users.

While some “killers” nobly tried to make their protocols decentralized, Binance is limited only to the theater of decentralization… and it worked!

 

There is nothing wrong with Binance Smart Chain. This product benefits people. But it cannot be put on a par with Bitcoin and Ethereum because they have a soul.

Those who promote BSC from this angle understand that this is nonsense because Bitcoin and Ethereum strive for maximum decentralization, but Binance Chain does not.

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