All clues suggest that Binance, under Changpeng Zhao’s guidance, will follow the jugular and want to compete with Ethereum.
They recently released a whitepaper on Binance Chain, a blockchain platform that they claim will not only be decentralized but the virtual machine will be compatible with Ethereum.
The thing is, Ethereum is the kingpin in smart contracts and is the market leader.
However, the space is heating up and competitors are increasing, launching platforms that solve some of Ethereum’s core weaknesses such as scalability. Ethereum is based on a Proof-of-Work consensus algorithm and is decentralized.
For decentralization and security, network creators have to face scalability issues that prevent high demand applications such as social media platforms from launching on the platform without straining core.
Read: Binance Builds Blockchain Like Ethereum
Details of the Binance Smart Chain
Now, Binance Chain, gleaning from its whitepaper, promises more.
The extract reads that the chain will not only be compatible with Ethereum but it will also be easy for decentralized applications, dapps, to migrate to Binance with zero or minimal changes.
“To take advantage of the relatively mature applications and community, BSC chooses to be compatible with the existing Ethereum mainnet. This means most of the dApps, ecosystem components, and tooling will work with BSC and require zero or minimum changes.”
Binance, for years, has been trying to move promising price dapps away from the Ethereum platform to the Binance Chain.
But the introduction of Smart contract capabilities means that the table has changed. Binance, could also turn into a real threat, “killer”, Ethereum.
Their virtual machine will be based on Tendermint and new chain will run parallel to Binance Chain, an ecosystem that is continuously being built from 2022 consisting of a decentralized exchange, DEX, where multiple tokens are traded.
For convenience, both Chains can communicate smoothly. Additionally, it will allow its influence as New Chain, BSC, seeks to incorporate decentralized Proof-of-Stake, variants of Proof-of-Stake, and Proof-of-Authority (PoA).
The only coin allowed to bet is BNB.
Binance Removes ETH Listing In 2022
It makes sense for Binance to do this now. Last year, Binance was lambasted for pulling out an ETH pair while pushing BNB.
“There was some kind of partnership with Binance with developing the exchange and Binance had as a condition to delist or not list ETH pairs so BNB gets pushed. I think this might be the reason, no hard proof though.“
It even said Exchange approached the team and urged them to migrate to Binance Chain.
Read: Binance Unveils New Blockchain But Not Ethereum Competitor
Binance Should Be Praised?
However, there is nothing to take away from Binance. The exchange has grown to become one of the largest in the world just three years after its launch. Earlier this month, they acquired CoinMarketCap, coin tracker for $400 million.
They also have their tentacles around the world including South Africa and the Caribbean which allows trading of crypto-fiat, margin, and derivative contracts.