Binance Chain vs. Binance Smart Chain: What's the Difference?

Two blockchains, run by the same company. What gives?

With the increasing popularity of blockchain technology, it can be difficult to keep up with the continued new developments and launches within the industry.

A key player in the cryptocurrency exchange field is Binance, a company that has launched two separate blockchains over the past few years: Binance Chain and Binance Smart Chain. But what are the differences between these two, and what can you use them for?

What Is Binance Chain?

Binance Chain is Binance's first blockchain and was launched in April of 2019, just two years after the company itself was founded. This blockchain provides a marketplace platform for exchanging crypto-based assets. One of the key exchanges available on the platform is Binance DEX, wherein you can trade Binance Coin (or BNB).

This move to a trading platform with its own crypto coin made Binance a big competitor against other major coins, such as Bitcoin and Ethereum. In fact, Ethereum's trading volume was hit pretty significantly as BNB rose through the ranks.

Related: What Is a Decentralized Cryptocurrency Exchange (DEX)?

Binance Chain is designed also designed to allow people to develop decentralized apps, also known as Dapps. The blockchain offers low trading fees, as it doesn't use any third party to facilitate trading. Given that it is decentralized and transparent as a system, users don't have to worry about an authoritative party having a hold on funds at any given time.

So, what can you do with Binance Chain? Well, firstly, you can securely store your cryptocurrency funds. You can also send, receive and exchange Binance Coin on this platform. What's more, you can create trading pairs between separate tokens. These pairs are essentially crypto assets that can be traded for each other via exchange.

However, in September of 2020, Binance developed another blockchain, named Binance Smart Chain, or BSC. But why did they do this, and what's Binance Smart Chain all about?

What Is Binance Smart Chain?

Binance Smart Chain is also an individual blockchain, but it isn't the replacement for Binance Chain, despite it being newer. Binance Smart Chain is actually designed to run alongside the original Binance Chain. This blockchain was developed because the Binance Chain had some frustrating programmability limitations. So, the new blockchain comes equipped with EVM-compatible programmability.

But what is this exactly?

EVM stands for Ethereum Virtual Machine. BSC's compatibility means that Ethereum-based applications can be run on the blockchain. There are currently hundreds of apps hosted by Ethereum on the Binance Smart Chain. However, all of the top Dapps on BSC are still hosted by Binance.

Related: What Are Atomic Swaps in Crypto?

The Binance Smart Chain uses a Proof of Staked Authority (PoSA). A PoSA is a modified version of the original Proof of Stake mechanism, in which network users stake their identity and reputation (instead of tokens). It is also a combination of Proof of Authority (PoA) and Delegated Proof of Stake (DPoS). If any user proposes a valid block (or transactional data file), they can become a validator.

Lastly, the BSC can enable smart contracts. These are contracts between two individuals that come in the form of code. This creates a program that runs on the blockchain, which can automate the completion of a contracted agreement without any need for human intervention. These contracts can lower trading or transactional fees and make the entire agreement process more convenient for users.

In short, Binance Smart Chain (while running alongside the original Binance Chain) offers a fast, secure, EVM-compatible experience for users with the addition of smart contract convenience.

Check Out These Blockchains If You're Interesting in Trading Assets or Developing Dapps

These two blockchains offer a reliable and well-oiled platform for users to store and trade their crypto assets and build upon their Dapp development. There's a clear goal to make these experiences more convenient and accessible for users, so check them out if you're looking to get started in the crypto market or diversify your assets.

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