In 2019, Binance introduced the Binance Chain, a blockchain to facilitate trading. But there were certain limitations to this application. Therefore, this prompted them to launch the new Binance Smart Chain.
Binance Smart Chain is an advanced blockchain service that enables users to develop high-performance “DApps” (Decentralized Apps). It made its way in September 2020 and is compatible with Binance Chain.
The original Binance Chain did not support a lot of decentralized apps. But the new and refreshing upgrade allows us to develop powerful such apps using smart contracts. And it retains the same functions as the old version along with an upgrade on its features. Plus, it is compatible with the Ethereum Virtual Machine (EVM), through which we can run applications like MetaMask.
But we should bear in mind that the two blockchains are of the same platform. But BSC is not a second layer of BC. Instead, these two go hand-in-hand and work in parallel with one another. Therefore, we get the best of both worlds.
Let us look at some essential attributes that go hand-in-hand with Binance Smart Chain.
Essential Attributes of Binance Smart Chain
- Proof-of-Staked Authority (PoSA) – Binance Smart Chain uses PoSA to stabilize network unity and maintain security. Validators are the people who are responsible for safety on the network. Here, members wager BNB to get the position as a validator. With this model, we can attain three-second block times. And when they submit credible blocks, they will earn additional fees. Plus, they will also acquire the transaction fees for each block.
- Compatible with Ethereum – Binance Smart Chain supports smart contracts, which is suitable for Ethereum. Using this, we can develop and transfer DApps and other elements on the BSC network with ease.
- Maintains Staking and Communal Authority – This platform abides with a Proof-of-staked authority consensus model. Binance Coin or BNB is the currency we use on BSC. And we can stake them to secure our network or vote on communal authority protocols.
- Interoperability – Binance Chain and Binance Smart Chain run parallel with each other. Therefore it provides seamless operations for the transfer of cryptocurrencies between them.
The cross-chain link between them makes this possible. Thus, it combines the quick trading power of BC along with the Smart Contract service of BSC.
- Independent Operation – We know that BC and BSC function in a parallel mode. But the new Smart Chain can work even if the old one goes offline. Therefore, it is an independent blockchain.
- Various Token Support – BSC supports a variety of tokens for trading. Binance Coin or BNB is the native token we use on the Binance platform. We can use it for fee transactions or running smart contracts on Binance Smart Chain.
If you want to become a validator, you can stake BNB on a smart contract. In doing so, we can earn extra rewards or contribute to network security.
BSC also supports other tokens like the BEP2E standard. The BEP2 and BEP8 standard also work for both BC and BSC.
- Validator Quorum – In order to maintain security, we need a group of people known as “Validators.” Every 24 hours, the BNB advocates elect 21 validators. Any member can become a validator. But for that, you must be among the top 21 highest-staked nodes.
Binance Smart Chain Wallet
To facilitate trading, we need a wallet to store our BSC coins. And to help with this, we have Binance Smart Chain wallets.
There are several BSC wallets you can choose from. Some of them are Binance Chain Extension Wallet, Arkane Wallet, MetaMask, and Trust Wallet.
How to Create a Binance Smart Chain Wallet
We will now learn how to make your own Binance Smart Chain Wallet. And for this purpose, we will create one using MetaMask. It is an efficient and user-friendly wallet for all your trading needs. But first, let us discuss in brief what MetaMask is.
MetaMask is a crypto wallet that equips us with features to manage our assets. Since it is an Ethereum wallet, we can use it for websites that use Ethereum. You can use it from your browser as well as through the official mobile app. It also acts as a powerful tool for smart contracts and decentralized applications.
Additionally, you can also connect hardware wallets, transfer funds, manage contacts, etc., just like you would with a standard crypto wallet.
Steps to create a BSC Wallet with MetaMask
To create a custom wallet, we must first download the MetaMask app. If you are a desktop user, you can head over to the official download page for MetaMask.
You can use MetaMask with browsers like Chrome, Brave, and Firefox. But irrespective of what browser you are using, the instructions below will be the same.
And if you are using a mobile device, you can download the iOS or Android app for free.
Here are the steps involved:
- After downloading the app, select the platform you are using. Once you install it, you need to add the MetaMask extension to your browser.
- Next, we must set up an account in the app. Select the “Create a wallet” option.
- After setting your password, you have to add a few secret “backup phrases.” This step is crucial as you can use it to restore your account should it freeze. It would help if you also remember to note down these phrases or memorize them for future references.
- After completing this, click on “Confirm.”
Connecting MetaMask to Binance Smart Chain
After signing up, you will notice that you are still in the Ethereum realm. Therefore, you need to shift your wallet to Binance Smart Chain. So, we want to configure our wallet to manage BNB instead of ETH.
Let us look at how you can integrate MetaMask with Binance Smart Chain.
- On the MetaMask app, click on the dropdown menu in the upper right corner. Then, select “Settings.”
- On the “Settings” menu, click on the “Networks” option. This will give you a variety of options. You want to click on the “Add Network” button located on the top-right screen. This option allows you to add the BSC network.
- Next, you must fill in the parameters for the two networks that we can use, i.e., the mainnet and the testnet.
For the Mainnet:
- For the “New RPC URL,” fill it with: https://bsc-dataseed.binance.org/
- Input for the “ChainID” will be: 56 (in case of error, try 0x38)
- Entry for the “Symbol”: BNB
- For “Block Explorer URL,” enter: https://bscscan.com
- Enter “Smart Chain” for the “Network Name.”
For the Testnet:
- For the “Block Explorer URL,” write: https://testnet.bscscan.com
- Enter “Smart Chain – Testnet” for the “Network Name.”
- Entry for the “Symbol” will be: BNB
- Input for the “ChainID” will be: 97 (in case of error, try 0x61)
- For the “New RPC URL,” fill it with: https://data-seed-prebsc-1-s1.binance.org:8545/
We should note that adding both networks is very important. This dual-network will aid in transferring BNB (Binance Coin) or BSC tokens to your account. You can use the mainnet for actual transactions and the testnet for practice.
But for this tutorial, we will be using the testnet. So, let us continue with the steps.
- After you press the “Save” button, go back to the main page. You will see that the network according to the one we set. And your assets also have a BNB denomination.
- Next, choose “Account 1” and copy the address. Now, go to Binance Smart Chain Faucet and paste the address in the box.
- Click on the “Give me BNB” option and choose the desired amount. After a few minutes, we will receive the funds in our testnet wallet.
After you complete these steps, let us send our funds somewhere to see how it works.
You can choose any address from BscScan Testnet to send your funds.
Now, click “Send” and then “Next.” After revising your transaction, you can hit “Confirm.” You will receive a notification after the process is complete.
And there you have it. You have successfully connected MetaMask with Binance Smart Chain.
Is Binance Smart Chain Decentralized?
Decentralized Finance (DeFi) refers to the financial services and applications that are built on blockchain technology. Or in other words, it refers to an ecosystem that provides a transparent financial service. Users have full access over their assets without any administrative authority.
Blockchain technology is transparent, secure, and decentralized in nature. This is the reason why they are sought after by several companies.
And to answer the question: Yes. Binance Smart Chain is a decentralized blockchain.
Binance founder and owner, Changpeng “CZ” Zhao stated that Binance Smart Chain bridges the centralized and decentralized finance gap.
It is one of the top blockchains for decentralized finance and provides the platform for developing DApps. And to make things easy, BSC uses Ethereum as a contract platform as developers are familiar with its functions.
BSC promotes a DeFi platform that anyone with a computer or mobile device and internet connection can use. Plus, it has a low fee order and a quick transaction time. This allows for smooth and efficient service for developers.
There are more than sixty DApps active on Binance Smart Chain right now. And the majority of them point towards providing solutions for decentralized finance.
Features that make Binance Smart Chain a reliable tool for DeFi
All DeFi developers need a robust blockchain that provides a cheap and user-friendly platform. And BSC is the solution for all their needs. Here’s why it is reliable.
Interoperability is one of the main features that DeFi developers look for in a well-built blockchain.
And BSC is at the top of this, offering you access to a massive ecosystem with multiple use cases.
It comprises a “dual chain architecture.” And this provides you with a flexible method for transferring assets between different blockchains.
- Cheap Transactions
When we complete a transaction on a blockchain, we have to pay a certain amount. This amount is known as blockchain fess.
On some DeFi platforms, we have to go through multiple, step-by-step transactions. Hence, we should keep in mind the blockchain fees.
And where blockchain fees are concerned, Binance Smart Chain is a cheap option.
- Transaction Speed
Blockchain transactions take a long time to confirm transactions. The completion time for a transaction depends on the duration of confirmations.
If we look at some blockchains like Ethereum lack, we see that they lack efficient scalability. Hence, we have to wait for a long time to complete a transaction.
On the other hand, Binance Smart Chain combines with Binance Chain to offer faster transaction speeds. It strengthens scalability to develop decentralized applications using smart contracts.
Binance Smart Chain is likely to grow into a more stable and decentralized infrastructure soon. There are funds of up to $100 million to support DeFi projects.
Tracking your Metrics in Binance Smart Chain
After you have successfully set up your account, you are free to use BSC for trading.
But how can we view our activities?
The answer is the BscScan explorer. Through this platform, we can stay up-to-date with our metrics and analytics. Here, you can view BNB prices, the latest blocks and transactions, validators leaderboard, and more.
To access this, go to the BSC page, click on the top-right corner menu, select “Explorer,” then BSC Explorer.
Can you use Binance Smart Chain in the United States?
Binance blocks the United States from its website and analyzes transactions for any illegal activity. They sent emails to many American customers asking them to withdraw all their funds from Binance.
But if you are a US citizen, don’t worry. You can use Binance.US, an alternative option. It is a separate and smaller company dedicated to American traders.
However, Binance.US is only available in 41 states in the US. Plus, it offers only 52 cryptocurrency options, compared to 259 in Binance. Also, the fees on Binance.US are higher if we compare it with Binance.com.
Binance Smart Chain, with its low cost and efficiency, is an automatic choice for developers and traders alike. Statistics from February 9, 2021, also show the increase of custom wallets of up to 50,000. We can certainly believe that “DeFi” is one of the biggest trends in the world of finance. And it is likely to grow more prominent with the hundred million dollar fund for its development.