Binance Smart Chain Vs Ethereum I Deep Dive

Snapshot:

•  Binance smart Chain (BSC) Vs Ethereum (ETH) 
•  Comparison Table 
•  Consensus Mechanism, Tractions Fees and other differences 

At first glance, Binance Smart Chain (BSC) and Ethereum look very similar. Binance Smart Chain (BSC) is a hard fork of the Go Ethereum (Geth) protocol, and as such, shares many similarities with the Ethereum blockchain. However, BSC developers have made significant changes in some key areas. The largest change in BSC’s consensus mechanism is that it allows for cheaper and faster transactions.

Users might have noticed that their public wallet addresses are the same on both blockchains. There are even cross-chain projects that operate on both networks. Nevertheless, there are some noticeable distinctions between the two chains. wondering which to choose? Let us understand the differences first. 

Binance Smart Chain Vs Ethereum 

Blockchain traffic and DApp ecosystem 

As of June 2021, Ethereum hosts more than 2800 DApps on the blockchain compared to roughly 810 on BSC. It’s a significant difference, but considering BSC’s young age, it shows a strong and growing ecosystem.

BSC recorded a high of 2,105,367 addresses on June 7, 2021. It’s more than double of ETHs ATH of 799,580 addresses recorded as of May 2021. The BSC growth might also be related to the growing hype around NFTs and the compatibility with popular crypto wallets, such as Trust Wallet and MetaMask.

When it comes to decentralized finance, there’s a large amount of DApp cross-over between BSC and Ethereum due to the blockchains’ compatibility.

Transaction Fees  

BSC and Ethereum both use a gas model for transaction fees that measure the complexity of a transaction. Ethereum’s London hard fork does, however, bring in some new modifications that will likely remove the need for high fees. BSC users can set a gas price according to network demand. 

Ethereum gas fees have been much higher than the ones on BSC. The highest average seen was in May 2021 at $68.72. The Ethereum update creates a new pricing mechanism with a base fee per block. The base fee changes depending on the demand for transactions. For a simple transfer of an ERC-20 token to another wallet, the average price at the time of writing is $2.46. 

Transaction Time 

Measuring average transaction times on blockchains can be a bit tricky. While a transaction is technically complete once miners validate the block it is in. Factors that affect the time one needs to wait are: 

If the user deposits ETH (ERC-20) into your Binance account, you will need to wait for 12 network confirmations. With a block mined roughly every 13 seconds. On BSC, the average block time is 3 seconds. When we compare this to Ethereum’s 13 seconds, we’re looking at a speed improvement of roughly 4.3 times.

Consensus Mechanism 

While the Ethereum Proof of Work (PoW) consensus mechanism is similar to the one of Bitcoin,  it’s vastly different from BSC’s Proof of Staked Authority (PoSA). However, Ethereum 2.0 is expected to use the PoS mechanism. 

BSC’s PoSA combines aspects of Proof of Authority (PoA) and Delegated Proof of Stake (DPoS). 21 validators take turns to produce blocks and, in return, receive BNB transaction fees as a reward. Becoming a validator requires running a node and staking at least 10,000 BNB to become an elected candidate. Ethereum’s PoW is an extremely different system. Instead of the community choosing validators, there is a race to solve a computational puzzle. Anyone can take part, but they will need to buy or rent specialized mining equipment.

While PoW is an effective way of creating consensus and ensuring network security, developers have since explored the use of other mechanisms. Their goal is to find more efficient and environment-friendly alternatives without compromising security.

For these reasons, the Ethereum network will eventually switch over to Proof of Stake. 

Summing it Up! 

It’s clear that there are lots of similarities between Binance Smart Chain and Ethereum. In part, this is what has made it so easy for Ethereum users to migrate and start experimenting with BSC. However, there are considerable differences as well in terms of performance and efficiency. It completely depends upon the crypto investor to choose the blockchain system based on his preferences and comforts. 

That was all you needed to know about Binance Smart Chain Vs ethereum. Stay updated with everything happening around the crypto world with CoinDCX. Start your crypto journey today with India’s safest and easiest investment app, CoinDCX. Still, confused about a few terms from the blockchain industry? Deep dive with DCXLearn, a complete and free blockchain, and cryptocurrency course.