A Beginner’s Guide to the Binance Smart Chain and the BscScan

When it comes to cryptocurrencies, blockchains like the BSC and the BscScan are integral parts of their transactions. That is because the transactions of crypto coins are inscribed on the blockchain making it impossible to alter without unanimous approval from all nodes. This is possible because of its decentralized features. 

Since a lot of people are engaging in crypto activities, companies are creating blockchains to hold all of these digital tokens. One of them is Binance which created the Binance Smart Chain and the BscScan. Although Binance Smart Chain is different from the BscScan, they are very much connected and dependent on one another. But before tackling those, let us know first what Binance is.

What is Binance, maker of BSC and BscScan?

Binance is a cryptocurrency exchange platform that was registered as a company in the Cayman Islands around 2017. It is very well-known since it deals with most crypto transactions across the globe. This made Binance the largest crypto exchange in the world. 

Founded by a Chinese-Canadian Developer, Changpeng Zhao, Binance was originally based in China. However, since the said country has banned all cryptocurrencies and activities related to them on all its territories, they had to move to the Cayman Islands. Although the crypto exchange giant was in some legal controversies last year, it remained one of the most trusted Bitcoin and NFT exchange mediums. 

Apart from being an exchange platform, Binance created a few more platforms that will allow its users to take advantage of the decentralized features of the blockchain. Among them are Binance Chain, Binance Smart Chain, and the BscScan. One of their most famous products is the Binance Smart Chain.

What is Binance Smart Chain?

The Binance Smart Chain is a blockchain that Binance dedicated to smart contracts. It was launched back in September 2020 just more than one year after the Binance Chain. To achieve this, it was modeled around the Ethereum platform and other dApp software programs. The Binance Smart Chain is commonly referred to by its abbreviation BSC. 

Although Binance can simply upgrade its Binance Chain, they chose to create a separate blockchain to host smart contracts and other DeFi software programs. The reason behind this is that the Binance Chain could slow down once the smart functionality has been integrated into it. Since Binance values efficiency, they created the BSC and managed it alongside the Binance Chain. 

How does Binance Smart Chain Operate?

In creating the BSC, Binance took the open-source code of Ethereum which was available for anyone to fork. However, duplication of an existing registered online platform can lead to legal issues. Thus, Binance made some modifications to the Go Ethereum (Geth) code. 

The biggest difference between the BSC and Ethereum is their consensus mechanism. Ethereum uses Proof of Work (PoW). In this mechanism, network members need to solve mathematical problems with the use of high-powered computers. 

On the other hand, BSC uses Proof of Staked Authority (PoSA). This consensus mechanism is a combination of two other mechanisms called Proof-of-Staking and Proof-of-Authority. This combination enables users to stake digital coins and collaborate. Moreover, PoSA is less expensive and allows short block times, unlike PoW.

Similarities Between Binance Smart Chain and the Binance Chain

Although the difference between the BSC and the Binance Chain has been glossed over earlier, this portion will further expound on it. When it comes to their similarities, they have two main characteristics. One of them is fast block time which means that a block or even blocks are added to the chains in just under one second.

The last notable similarity between them is their low charge fees. This is because they are using consensus mechanisms that do not require a lot of work compared to other blockchains that use PoW. Transactions on the Binance Chain and BSC are more economical compared to other cryptocurrencies like Bitcoin and Ethereum. 

Differences between Binance Smart Chain and the Binance Chain

When it comes to differences, there are several but there are three that are significant. They are the functionality, consensus mechanisms, and their Binance Evolution Proposal or BEP standards. 

In the functionality, Binance Chain only serves one purpose which is to host the Binance DEX. While the BSC has other purposes aside from integrating smart contracts. More precisely, the BSC can serve all dApps, and data from other dApps can also be transferred to BSC. 

As for their consensus mechanisms, it was already mentioned that BSC is using PoSA and how it operates. Binance Chain, on one hand, is using the Tendermint BFT consensus mechanism. 

This consensus mechanism enables Binance to have control over the blockchain without the involvement of a community. This is a striking contrast to BSC which permits its community to have some governance over the blockchain, especially when it comes to validation. However, the BSC is not completely managed by the community. Binance still has rights to vetting block validators as they see fit. 

Lastly, the BSC and Binance Chain differ in their BEP standards. The BSC is minted under the BEP-20 standards. This means that the BSC can launch more token issuance standards if necessary. It can also issue NFTs and other digitized collectible items. On the contrary, Binance Chain is using the BEP-2 issuance standard that has a more restricted capability. 

What is BscScan?

The Binance Smart Chain Scan or BscScan is a blockchain explorer that makes it possible for users to search for any information on a blockchain. If you have used Etherscan beforehand, you will not have any trouble getting familiar with the BscScan. Both blockchain explorers have similar visual interfaces and functionality since both were made by the same team of developers. 

Since the Binance Smart Chain is indexed in its ecosystem, it is easy for the BscScan to navigate through its database. Anyone can access blockchain information and it is not difficult to create a BscScan account. However, BscScan is not a crypto wallet or a service that deals with it. But fortunately, you can link your BscScan account to an existing wallet to aid you with your searches. 

How is BscScan used?

The main function of the BscScan is to serve as a search engine of the Binance Smart Chain. It can be used to look up transactions, yield farms lists, smart contracts, BEP-20 tokens, ERC-721 Tokens, and also NFTs. If you wish to search for transactions, you can simply put the transaction ID on the search bar. An alternative is to search for the wallet address that is involved in the transaction you are looking for. 

Another way to look for transactions on the BscScan is by using hashes which are strings of numbers and letters. Hashes are essential in tracking the status of a blockchain transaction. Many prefer inputting hashes on the BscScan since it provides a lot of vital information about a particular transaction. 

Token data and transactions are also available on the Binance Smart Chain Ecosystem and can be detected by the BscScan. As of now, the BscScan only supports BEP-20 and ERC-721 Tokens but more will be added in the future. Since it can detect ERC-721 tokens, it can also be used to search for NFTs. However, if you want to look for the artwork itself, it may be difficult to do that with the BscScan since that feature is not yet available. 

Conclusion

The Binance Smart Chain and its BscScan are essential when you are engaging in cryptocurrency transactions. Knowing how the BSC works will help you understand what happens to your digital coins and how you can take advantage of the system to yield earnings. With the aid of the BscScan, it will be easy for you to navigate the platform. If you wish to learn more about platforms and tools used in cryptocurrencies, check out more of our blog posts. 

* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.