It probably isn’t the first time you’ve read something about the Binance Smart Chain and/or Binance Chain. But do you realize they are two different chains? We’ll go through the specifics in this article and explain how they are related to one another.
Like brother (or sister) chains
So to get this out of the way in the first go. Binance Chain and Binance Smart Chain are two different blockchains. They have some things in common and work together closely however they were designed to tackle two different problems we see when analysing blockchains.
The Binance Chain was launched on April 18th 2019 and with it the process of swapping of BNB tokens to BNB coins, from the Ethereum chain to the Binance Chain. The Binance Chain had gone through a two-month public testing phase together with the decentralized exchange (DEX) that was built on top of it. The DEX is what the Binance Chain is all about. Seeing all transactions, i.e. buy and sell orders, on the DEX happen in real-time on the blockchain, there was a big need for a fast and efficient blockchain. As the CEO of Binance CZ has a history himself programming high-frequency trading systems, we can understand why Binance decided to tackle the issue themselves and create a blockchain from scratch. Hence, the Binance Chain was born on which the DEX can operate smoothly.
The Binance Smart Chain (BSC) was launched little over a year after the Binance Chain, on September 1st 2020. It had also undergone a private and public testing phase in the months prior to the launch. The BSC was developed for several purposes, but prior to leading the way as a direct competitor to Ethereum. The BSC runs parallel to the Binance Chain but is optimized for smart contracts. This opens the gates to all projects that are DeFi focussed but also to the possibilities for other projects to launch their own tokens on the BSC. For this purpose the BEP20 standard was developed, going into competition with Ethereum’s ERC20 token standard.
It goes without saying that the way Binance tackled the most common issues that trouble a lot of blockchains is genius. The combination of two parallel chains that cooperate smoothly and that were developed specifically to master just one or a couple of blockchain possibilities was very smart. The Binance Coin (BNB) being like the glue that keeps the chains together and go easily back and forth between them. It’s like a master plan coming together perfectly.
Fell down the crypto rabbit hole in 2017 months before the top. Rode the rollercoaster into the depths of 2020. Making mistakes, but learning and writing on the way down. Big fan of what Binance is becoming and sharing that with as much people as possible. If you like my content and haven’t signed up to Binance yet, feel free to use my reflink and we’ll both get a 10% kickback!