What is Binance Smart Chain (BSC)?
Cryptocurrency and decentralized finance is all the rage right now, which means more would-be investors are participating in the various trading platforms and crypto day trading. As a result, trading volume has skyrocketed, leading to a massive scalability problem within decentralized exchanges.
Luckily, large platforms like Binance are constantly developing solutions to address this problem, which is where the Binance Smart Chain (BSC) comes into play. Read on to find out more about Binance’s crypto ecosystem.
The Basics Of Binance Chain And Its Currency
One of the biggest problems neophyte crypto users have is understanding the seemingly impenetrable world of blockchains, decentralized applications, and digital asset exchanges. However, familiarizing yourself with the basics is a great place to start. Here’s a short primer on Binance Chain (BSC’s older sibling) and Binance Coin.
What Is Binance Chain (BC)?
Binance, one of the largest crypto exchange services, launched the Binance Chain in April 2019. This decentralized trading protocol is designed to facilitate fast and relatively low-cost transactions. However, BC lacked smart contract functionality, primarily because it would hamper transaction speed.
Today, it works alongside BSC in the BNB Chain (not to be confused with Binance Coin), which supports large-scale applications and has the flexibility the original Binance Chain lacked.
What Is Binance Coin (BNB)?
BNB, formerly known as Binance Coin, is Binance’s native token. But what does that mean? BNB has two distinct functions:
- As a blockchain gas token for the BNB Smart Chain
- As a chain governance token, one of the most critical ecosystem components
What Is Binance Smart Chain (BSC)?
BSC is a blockchain similar to BC, but BSC works alongside the original solution on the BNB Chain rather than replacing it. Specifically, it was designed to address BC’s scalability and flexibility issues through its EVM-compatible programmability.
For the uninitiated, the term “EVM” means Ethereum Virtual Machine. This indicates that the BSC can run Ethereum-based applications, which opens it up to different types of projects and dApps. On top of this already robust list of features, BSC can also cut down on transaction costs.
How Does Binance Smart Chain Work?
As we mentioned earlier, the original Binance Chain lacked any smart contract platform, and BSC was built to fix that.
The BSC has various features that focus on immutability, validation, and security. This is implemented when trading Binance’s native token or other cryptocurrencies. Namely, this peer-to-peer system uses a Proof of Staked Authority algorithm or PoSA. That means transactions conducted on BSC are relatively quick while also providing a solution for gas fee issues.
In addition to this, the BSC also uses smart contracts – which exist to automate the exchange of currency between two individuals without too much effort.
TL;DR: BSC can facilitate fast and secure transactions while also offering EVM and smart contract compatibility.
BSC In Action: Your “Quick” Start Guide
So now that you have a basic understanding of the Binance Smart Chain, you’re probably wondering how to join other crypto day traders. The process can be a little confusing for most beginners, but here’s a quick overview of what you’ll need to know.
How To Get Started With Binance Smart Chain (BSC)
The first thing you need to do when getting started with BSC is select a wallet compatible with the system. However, deciding which wallet to use can be confusing. Here are some of the most popular options for crypto traders:
- Binance Chain Wallet: This chain wallet has many integrations that make it a slick and easy choice for beginners and seasoned traders. Namely, it has a browser attachment for Chrome, Firefox, and Brave – making all transactions easily accessible for its users.
- MetaMask: MetaMask is primarily an Ethereum wallet, but it can also be connected to BSC. That way, existing users will access an already-familiar interface when transacting. However, setting it up may take a bit of time.
- Trust Wallet: Trust Wallet is arguably one of the most accessible, making it a popular option for people just coming into crypto. It also has a mobile app, which means you can manage and monitor your transactions on the go.
How To Move Crypto To Binance Smart Chain (BSC)
Moving your cryptocurrency to BSC requires you to withdraw your funds from your existing Binance account or via the Binance Bridge. Do note that BSC supports BEP-20 tokens, so you’ll need to select that when withdrawing. Once the crypto is in your wallet, you’ll be able to use BSC dApps.
Binance Smart Chain Concluding Thoughts
Cryptocurrency can feel like the wild west to an uninitiated onlooker. However, dozens (if not hundreds) of systems are in place to ensure security and immutability throughout every transaction. Binance Smart Chain combines various tools and algorithms to provide a fast and secure experience for its users, so it’s only become more popular since launching in 2020.
So, if you’re looking to get into crypto as a beginner, consider exploring BSC and its many dApps for the easiest transition.
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