9 Binance Smart Chain Questions (Answered & Explained!)

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Binance Smartchain Questions

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Binance is a world-leading cryptocurrency exchange with millions of users and hundreds of markets.

Binance has been working intensely to solve the problems facing traditional centralized exchanges. One of the key issues that Binance addressed is scalability, which is essential for a healthy and stable cryptocurrency exchange.

As a result, Binance created its blockchain and native token — BNB. It enabled users to trade and pay transaction fees in a faster and more cost-effective manner than before.

Now, Binance is taking the next logical step into the future of digital assets by combining its existing business with a new blockchain project — The Binance Chain.

In this article, we will answer 9 questions that you may have about the Binance Chain and the Binance Coin (BNB):

In This Post:

What Is the Binance Smart Chain?

Binance Smart Chain is the underlying BNB blockchain. The BNB blockchain will support the tracking and transferring all digital assets listed on the Binance exchange.

Moreover, Binance smart chain implements a new consensus algorithm, the Proof-of-Performance (POP) consensus algorithm.

With the BNB blockchain, users will be able to trade and pay transaction fees in a faster and more cost-effective manner than before.

Users will be able to access the Binance smart chain by installing the official Binance Chain wallet. The wallets for the BNB blockchain will be available for Windows, Mac, and Linux systems.

The Binance smart chain works using a Delegated Proof of Stake (DPoS) consensus algorithm with an average transaction time of 2 seconds.

The nodes will have a preset target that they have to reach during each interval. If the target is met or exceeded, the nodes can remain in service. If the preset target is not met or exceeded, the node is removed from service, and a new node will fill that spot.

Features of BSC (Binance Smart Chain) include;

1. Independent Blockchain

Binance Smart Chain is an independent blockchain that works in tandem with BC. It implies that even though BC ceases operations, BSC will continue to operate its technical and administrative functions.

2. Ethereum-compatible

Binance Chain and BNB share a common code base. In other words, they both use the Ethereum Virtual Machine (EVM), making them compatible with ERC20-based tokens on the Ethereum blockchain.

3. Supports staking

Users will be able to stake their BNB tokens in the wallets of the Binance Chain. Holding the BNB tokens in your wallet will enable you to receive regular dividends from fees incurred on the blockchain. The amount received depends on how many tokens you hold and how many transactions are done on the blockchain each day.

Binance Chain is also compatible with Ethereum (ERC20 and ERC721 tokens). As a result, developers can use Solidity, Truffle, and other tools to develop smart contracts. It also implements proof of work (PoW) with an SHA-256 algorithm, used by Bitcoin for mining.

The Binance Chain will also support an on-chain decentralized exchange (DEX). The DEX is crucial in making crypto trading more secure and improving liquidity by connecting users directly with one another.

4. Validator Quorum

Each node has a preset target it must reach during each time interval. If the target is not met or exceeded, the node is removed from service, and a new node will fill that spot.

Roles on Binance smart chain’s validator quorum include:

Validator: The validator provides computing power to the blockchain, similar to Bitcoin miners.

Service Node: The service node provides additional services to operate as a validator. These include staking, voting, and helping with network health.

There is an epoch period which is the period during which service nodes can vote on proposals. During this period, all service nodes are required to confirm transactions and will be penalized if they fail to do so.

5. Proof of Staked Authority

Service nodes can vote on proposals. Service nodes have to stake BNB tokens to vote on proposals, or they will face penalties.

It combines proof of authority and delegated PoS consensus to achieve higher performance.

6. Multi-chain system

Binance Chain will support multiple chains at the same time, each using its consensus algorithm as well as smart contract functionality. For example, one chain may use a Delegated Proof of Stake (DPOS) consensus algorithm while another may use a Proof of Work (PoW) algorithm. In such a case, Smart Contracts are executed on one chain while another chain is used for cryptocurrency trading and transferring.

Therefore, there is no need to convert digital assets when transferred to another blockchain.

What Tokens Are on Binance Smart Chain?

The Binance smart chain simultaneously supports multiple blockchains using its consensus algorithm and smart contract functionality. For example, one blockchain may use a Delegated Proof of Stake (DPOS) consensus algorithm while another may use a Proof of Work (PoW) algorithm.

Some of the supported tokens include;

BNB: Binance Coin.-This is Binance’s token. It gives you access to reduced fees, instant trading, and other features.

BNB has a maximum supply of 200 million coins, with 100 million BNB sold during the ICO in July 2020. The remaining 100 million is locked up until 2021. Blocks on the Binance Chain will be rewarded 1,000 BNB per block with a block time of one minute until all 100 million tokens are released to service nodes and miners.

ERC-20: Ethereum-compatible tokens.

BEP8:

BEP2 and the future BEP8 specifications recognize both BC and BSC tokens. On the BSC blockchain, Ethereum – based tokens, or BEP2E tokens as they are known on the chain, are supported. Additional variables on an asset, such as token valuation, ownership address, and decimal clarity specification can be added to “improve” ERC-20 tokens on the platform. It is referred to as “token binding.”

Therefore, ERC-20 tokens from Ethereum and ERC-20-based tokens can be used on the BSC platform.

Does Metamask Support Binance Smart Chain?

Metamask is a popular web browser extension that has many cryptocurrency-specific features. It allows users to keep track of and control their cryptocurrency holdings using one click. The wallet included with Metamask is called a vault and can hold any ERC-20 tokens.

Metamask supports Binance smart chain. Here are the steps to add BSC to Metamask.

Step 1: Install Metamask on the chrome browser extension

Enable and set a password to protect it.

Click on the icon to the left of the address bar in your browser to launch Metamask. Select the “Create” option from the dropdown list to create a new wallet. Set a strong password. You will need this password every time you want to access your account.

Step 2: Configuring the wallet

To view your Binance smart chain wallet, navigate to the settings menu. Scroll down the menu and click on “network menu.”

Step 3: Setting up your Binance smart chain token.

In the “network menu,” you will find a dropdown menu. There are two networks; Mainnet and Testnet.

For mainnet, you will come up with something like this;

Network Name: Smart Chain

New RPC URL: https://bsc-dataseed.binance.org/

ChainID: 56

Symbol: BNB

Block Explorer URL: https://bscscan.com

Step 4: Click on the save button and close Metamask.

Now you will be able to see the Binance smart contract.

How to view your Binance smart chain wallet?

Navigate to the settings menu in the chrome browser, scroll down and click on “network menu” Then click on the mainnet network name, mainnet. You will have to enter the private key, which is the password you set for your Binance smart chain vault. Confirm by clicking on the “Create account” button, and you will see your Binance smart chain address there. You can now send funds to your Binance smart contract from Metamask, and you can use that to log in to the wallet with a passphrase/private key.

Is Binance Smart Chain Safe?

Absolutely, the Binance smart chain is not a cryptocurrency but an application platform on top of the existing blockchain. As such, the Binance smart chain does not have any control over your coins. You are in complete control of your funds, and if you put it in a Binance smart contract wallet and lose access to that private key, there’s no way for them to get back your coins.

The security of the chain is achieved through the service nodes. Service nodes will manage and safely keep them. The BNB tokens will incentivize them.

Here are ways to make it safer for your coin;

1. Non-custodial wallets

The Binance smart chain supports non-custodial wallets, also called HD wallets. Autonomous, open-source software lets you store your private keys on your computer but doesn’t allow anyone else to access or manage them.

2. Hardware wallets

The BNB tokens are compatible with the Ledger hardware wallet, one of the most popular hardware wallets for crypto users. It will ensure your BNB token’s security in a more secure way.

3. Private keys

Choose a private key that is easy to remember but difficult to guess. A fake private key could be of any length, and the randomness would be the same every time. You have just created your private key if you can remember a long string of random numbers and letters. The longer it is and the harder to guess, the more secure your wallet will be.

Additionally, private keys are also represented by a seed phrase.

You will only need to input the private key or seed phrase to spend funds. It would help if you kept your private key and seed phrase secret. No one except you should know this information.

Can Us Citizens Use Binance Smart Chain?

Besides being banned by the New York State Department of Financial Services, Binance is also banned in the United States territory. However, it is still unclear how this ban affects Binance smart chain.

Suppose you’re an American citizen and you want to use the Binance smart contract to store cryptocurrency. The best option for you is to use Binance.us to do this;

Step 1: Get started at Binance. us

To make any transaction over the entire blockchain, users must hold BNB. It is the chain’s fuel.Binance.us doesn’t support BEP-20 tokens, so you should use Metamask to add the Binance smart contract to your existing wallet. Then, you can send your coins from Binance.us to the address in Metamask.

Step 2: Add Binance smart contract to your Metamask

Head over to the transaction tab and add a Binance smart contract wallet by clicking on the “CREATE WALLET” button;

You will see a pop-up menu and get a code. It is the wallet address you need to use to send your coins from Binance.us to your Binance smart contract wallet.

You should note that the only wallets used for withdrawal include; Trust wallets, Binance chain wallets, Metamask, and Ledger.

Step 3: Transfer Binance Smart Chain coins to your Metamask

If you want to use the Binance smart contract, you need to send your assets from Binance.us to the address in Metamask first. After that, when you open Metamask, go to the “addresses” section and click on the address in Binance smart contract wallet.

It’s highly recommended that you create a new and strong password for your Metamask. Keep it very safe, just like your private key.

You can use your Binance smart contract to store cryptocurrency by following the steps mentioned above. So, now you can start buying and selling Binance smart chain. The steps are simple, and everyone can understand them.

It is vital to be extra careful while withdrawing funds from the smart contract. In case of an accident, you will suffer the loss of all your assets. You must have a strong password and back up your private key on other devices.

Is Binance Smart Chain Proof of Work?

Binance smart chain is a hybrid proof of work/stake consensus. The first mining phase uses Proof of Work.

The only thing that will change from the original Binance Coin is that no mining and supply remains the same. Binance Chain uses a dual-coin system where miners will earn BNB, the original coin, and BC or Binance Chain stabilization tokens, which allow for voting rights and whose supply will be locked in smart contracts.

Plans include changing to a Delegated Proof of Stake consensus mechanism. Proof of work is used for the first mining phase and is limited to the initial 100 million BNB coins. The coin supply can only increase by adding new service nodes, which will be part of the network’s Proof of Stake network. The incentive for miners is revenue from transaction fees and additional BNB tokens. Therefore if miners successfully solve the PoW, they are rewarded with BTC.

What Is the Rpc URL for the Binance Smart Chain?

The RPC URL is https://bsc-dataseed.binance.org/,it is the main node for the Binance Chain smart chain.

Does Binance Us Support Binance Smart Chain?

Although Binance is legally banned in the US, it still has an office in the United States. That makes it easier to set up a solution running on Binance smart contract and have access to it from your US address.

To get started and make any transaction over the entire blockchain, users must hold BNB. It is the chain’s fuel.Binance.us doesn’t support BEP-20 tokens, so you should use Metamask to add the Binance smart contract to your existing wallet. Then, you can send your coins from Binance.us to the address in Metamask.

To complete cross-chain transfers, the user must first obtain their asset’s Binance Smart Chain network address to execute a cross-chain transfer. The recipient’s address will be this one. The next phase is also approached with caution. Participants must move funds from their Binance Network address to the Binance Smart Chain network interface, the Metamask account.

As soon as the transaction is complete, it must be broadcast to all network members, and miners will have 24 hours to verify it. If no one objects during that time, the transaction is considered valid and can be paid with assets on any chain supporting cross-chain transfers.

Is the Binance Smart Chain Decentralized?

Binance remains on the list of more than 50 exchanges by Coinmarketcap. The best thing about Binance is that it’s decentralized. With its blockchain, Binance smart chain is one of the most decentralized cryptocurrencies available today.

The main aim of Binance smart chain is to provide a platform for the future of cryptocurrencies. It will be an alternative to centralized exchanges, and it will revolutionize the whole industry.

Binance as a dApps means that Binance smart chain is a blockchain that lets you create decentralized applications. It will offer users a wide range of opportunities and a new way to promote their business. As part of the Binance ecosystem, you can create your tokens, ICOs, etc.

The Binance blockchain has no limits. Therefore, it’s possible to set up smart contracts and make cross-chain transfers between different cryptocurrencies. You can even use it for fast payments, and the transaction speed depends on the number of available confirmations from miners.

Smart contracts are a big advantage of the Binance blockchain. It allows users to create their tokens and set up an ICO.

The smart contract is a program stored in the blockchain and can be used for digital transactions. The major benefit of smart contracts is that a third party cannot change them. They are also designed to be transparent and unchangeable. As these contracts become more popular, the smart chain may change how people carry out transactions online and in person.

Wrapping Up

In conclusion, Binance Smart Chain is an ERC-20 token that runs on the Binance Chain. It is the same chain that Binance uses for its exchange ecosystem. The difference is that Binance smart chain does not have mining. It completely relies on the Proof of Stake consensus.

Not just a dApp, but a platform for usable dApps, which can be created by anyone and then used on a plethora of different blockchains with cross-chain capabilities!

As stated above, BSC is safe and secure, and I would recommend keeping your BNB in a hardware wallet. Feel free to contact Binance Chain Team for more information, start your ICO (Initial Coin Offering), and use the Binance blockchain!

References

  1. https://academy.binance.com/en/articles/an-introduction-to-binance-smart-chain-bsc
  2. https://coinmarketcap.com/alexandria/glossary/decentralized-applications-dapps
  3. https://www.bsc.news/post/cryptonomics-smart-contracts-explained