Apart from BNB, Changpeng Zhao, the founder and CEO of cryptocurrency exchange heavyweight Binance has another reason to smile.
Yesterday the Binance Smart Chain (BSC) handled 21 percent of Ethereum transactions, at 0.6 percent of the gas fees charged for transfers on the latter. This makes BSC about 35 times cheaper, he said. Also, CZ added that if BSC handles more volumes, it will bode well for BNB price and node operators.
Binance Smart Chain Handles 21 Percent of Ethereum Transactions
According to the latest update from Binance CEO Changpeng Zhao, yesterday, the Binance Smart Chain (BSC) successfully processed 21 percent of Ethereum transactions charging a much lesser amount in transfer fees than the latter.
— CZ Binance (@cz_binance) October 9, 2020
As per the table of calculations shown above, while BSC tackled 213,900 transfers compared to 1,019,446 handled by Ethereum, it charged just $13,000 in fees. On the Ethereum node, operators made a whopping $2.2 million.
From quick napkin mathematics, the transaction fee rate for BSC works out to be $0.06 per transfer, whereas, for Ethereum, it cost almost $2.16 per tx. CZ said this makes Binance Smart Chain a 35x cheaper alternative for processing transactions.
He also added that these drop-dead transfer rates may not help BNB price and node operators (for now), but the above costs are way more user and developer-friendly (than, of course, Ethereum).
However, Zhao shared a long term scenario for BSC, where the network handles much more volumes than today. In that case, Binance Coin’s price and BSC node operators will stand to benefit a lot.
What Is BSC Anyway?
According to the official Binance blog, Binance Smart Chain operates parallelly to the earlier launched Binance Chain (BC). But BSC files a gaping gap left by BC. And that gap is ‘smart contract functionality and compatibility.’
BSC retains BC’s high throughput features with the added compatibility with the Ethereum Virtual Machine (EVM). Actually, that was the original design goal for BSC right from the start.
The design goal here was to leave the high throughput of Binance Chain intact while introducing smart contracts into its ecosystem.
But it is worth paying attention to the fact, both Binance Chain and the Binance Smart Chain operate in tandem with each other. Also, ‘BSC isn’t a so-called layer two or off-chain scalability solution.’
As per the folks at Binance, BSC is ‘an independent blockchain that could run even if Binance Chain went offline.’ Both BC and BSC have identical and bear strong resemblances from a design standpoint.
Binance Coin (BNB) price remained relatively stable following the update but is up 4 percent in the last 24 hours as bitcoin (BTC) guns for $11,000.