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BSC vs Ethereum: A rivalry for control of decentralized finance.

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@fabian98
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Rivalries in the economy have always existed and in a certain sense they bring some excitement, as the constant struggle to conquer markets unleashes confrontations of all kinds between companies, for example Coke vs. Pepsi, McDonald's vs. Burger King, Apple vs. But in the world of cryptocurrencies lately we have Binance Smart Chain vs Ethereum. Where BSC has been presented as an alternative to Ethereum because it brings different and effective solutions that the other does not have, but also big disadvantages.


As I commented in this post the Achilles heel of the ethereum blockchain is its high transaction fees, which is mainly due to the huge network bottleneck and saturation that has caused transaction fees to reach a peak of $39, leaving those who have no way to pay them out of the game. But when Binance Smart Chain was launched, a potential rival was seen as a relief for all traders because no matter the amount of money the transaction costs are really low compared to the competitors, and that is the main advantage and the reason why Binance Smart Chain has been so successful in such a short time, because in the case of Binance Smart Chain commissions are still pennies. While trading on the Ethereum network is in the $20 range.

In addition to low transaction fees, we also have the ability to automatically migrate from ETH to BSC, thanks to the existing virtual machine, since by using PoS instead of PoW it is not necessary to have large mining rigs, giving it an advantage over other blockchains of being much more environmentally friendly. It also has a fast validation of transactions, with an average of three seconds, much faster than its competitors.

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Of course, not everything is rosy, because when it comes to security, transparency and decentralization, BSC has a disadvantage, since it has only 21 validator nodes, which greatly limits decentralization and also puts the security of users at risk by exposing them to hacks. In fact, there has recently been news of a hack of a DeFi on Binance Smart Chain called Meerkat that has left more than $30 million in losses. But unlike BSC, Ethereum has this in its favor, as the large and robust decentralization and almost unbreakable security make it perfect for user security risks.

Furthermore BSC does not give users autonomy through the use of non-custodial wallets as ethereum does. And this is not unimportant, as centralized exchanges like BSC have a problem that is not commonly talked about: the way they create extra transaction costs by having to move cryptoassets out of the custodial wallet to one where it is possible to interact with DeFi projects. And when this happens on exchanges like Binance it is not possible to access the private keys of the funds. This takes away confidence on the part of the users.

But as we all know BSC has very little time in the market, there is still much to improve and evolve, also when the Ethereum blockchain was also new it had many problems as BSC has today, so it is a question of waiting to see how this Ethereum rival develops and see if it can win the battle.

Posted Using LeoFinance Beta