Remember when I wrote an article about Ethereum miners buying Lambos? The situation still remains the same as the Ehereum blockchain and the Ether token (ETH) are becoming exceedingly expensively for small investors or people that don’t own Lambos lol. Ethereum 2.0 was touted to solve the high ETH gas fees but the high fees have continued unabated. Investors are gradually pivoting from the Ethereum blockchain to cheaper and more scalable blockchains. These blockchains include Polkadot, Binance Smart Chain (BSC), Tron, etc.
While Ethereum holds the tag as the first mover in regards decentralized finance (DeFi), an important question to ask is: what is DeFi without affordable transaction fees and better scalability? These two important factors may make Ethereum blockchain obsolete in no time if not addressed ASAP. Already there has been a mass exodus to the Polkadot ecosystem and I recently discovered Binance Smart Chain (BSC) which is also cheaper and faster to scale.
Binance Smart Chain
Binance Smart Chain (BSC) is a parallel blockchain on the Binance ecosystem launched in April 2019. Two very important features of BSC are that it supports smart contracts and its compatible with the Ethereum Virtual Machine (EVM). Due to its compatibility to EVM, it supports Ethereum blockchain tools and DApps. Developers can easily move their projects from Ethereum here. On the part of users, DApps like Metamask and Trust Wallet can easily be configured to work with BSC.
Is Binance Smart Chain an Ethereum killer?
Scalability remains a major issue for blockchains. Any blockchain apart from Ethereum that supports smart contracts creation, decentralized applications (DApps) development, improved scalability, improved security and cheap transaction fees will definitely be an Ethereum killer. In this region there are three strong contenders which are Polkadot, Binance Smart Chain and Tron Network, but I think BSC has an upper hand to be an Ethereum killer for the following reasons:
- Its backed by the biggest centralized exchange: Binance Smart Chain was developed by Binance, the biggest centralized crypto exchange in the world today. This alone gives BSC some legitimacy and credibility.
- Developed using solidity programming language: BSC like Ethereum was developed using the solidity programming language.
- Scalability: BSC uses the Proof-of-Staked-Authority (PoSA) consensus mechanism where validators stake the native token of the Binance Ecosystem BNB, to secure the network and in return receive transaction fees. Here no new tokens are minted. This has made the network very easy to scale.
- Cheap transaction fees: If transaction fees on your blockchain are cheap they will definitely come. Today Fegswap an Ethereum based project had to deploy their token on the Binance Smart Chain Network due partly to the high transaction fees. Many projects are already towing this path, it’s just a matter of time before all DeFi projects dump Uniswap and Ethereum moving over to BSC and Pancakeswap.
- Interoperability: You can literally use ethereum tools and DApps on the Binance Smart Chain Network because it is compatible with the Ethereum Virtual Machine. For instance, my BSC wallet address is still my Ethereum blockchain wallet address, all I did was a few tweaks on my Metamask to access the Binance Smart Chain Network. If I can trade and farm on Pancakeswap with less than $5 transaction fees and better scalability I think I am better off than paying over $100 as transaction fees on Uniswap and the Ethereum Network.
Today I officially ported to the Binance Smart Chain Network due to the high transaction fees and scalability issues associated on the Ethereum blockchain. A transaction that would have cost me over $100 (47,000 Naira) cost me $1.6 (752 Naira) on the Binance Smart Chain. With the high Ethereum gas fees, small investors will not be able to invest, I have a friend that wanted to invest $20 in December last year to buy her first crypto but due to the high transaction fees she has not been able to do that till now.
Imagine how many small investors like her has been left out completely from investing in cryprocurrency due to the high fees? But now with Binance Smart Chain, small investors like her will be able to finally invest in crypto. In my opinion I think BSC came at the right time and I hope many DeFi projects will in the coming days and weeks port to Binance Smart Chain.