Binance Develops a New Blockchain to Compete With Ethereum

April 18, 2020 4:08 PM UTC

Binance is set to launch a new blockchain that would allow users to enjoy smart contract functionalities within the ecosystem of Binance native token (BNB).

According to the new whitepaper published on April 17, the new blockchain, Binance Smart Chain (BSC), will operate in hand-to-hand with the real Binance Chain but will be completely independent. The Binance Chain team emphasizes that it had to build a new chain in order to sustain the performance of the main chain.

Binance said “, The first practical and widely-used Smart Contract platform is Ethereum. To take advantage of the relatively mature applications and community, BSC chooses to be compatible with the existing Ethereum mainnet.”

BSC Consensus is Similar to Other Validator Systems

The new Binance Smart Chain will be employing the Proof of Staked Authority consensus mechanism. This consensus algorithm is pretty close to EOS Distributed Proof-of-Stake. 21 validators will take part in producing blocks and the stakeholders will have to lock their BNB tokens to make their decision.

“BNB is the token used to stake for BSC,” said Binance, adding that its an “attractive opportunity for all BNB holders who are interested in staking BNB to support the development of Binance Smart Chain and earn rewards.”

The exchange officially clarified that the new blockchain (BSC) will provide a sophisticated space to Dapp Developers. The BSC will have an enhanced mechanism to manage and create more affordable and active transactions. Moreover, it will also support Ethereum’ existing tools.

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