8️⃣Blockchain Network
Last updated
Last updated
Blockchain is a distributed digital ledger technology that organizes encrypted transaction information into blocks and connects them, ensuring trust and secure transactions without the need for intermediaries. The blockchain infrastructure guarantees transparent value exchange between platform users and businesses, providing a foundation for issuing tokens used in the trading, distribution, and evaluation reward processes of content and products, as well as facilitating exchanges with domestic and international exchanges.
BSC is a blockchain network that provides various Web3 tools and decentralized applications (DApps). It is a high-performance blockchain that supports smart contracts, enabling developers to create all types of services and applications, including blockchain games, governance and voting systems, and decentralized finance (De-Fi). BSC was developed to address the limitations of the BNB Beacon Chain (the initial version of the BNB Chain). The design goal of BSC is to introduce smart contracts to the BNB ecosystem without interfering with the operations of the BNB Beacon Chain. Therefore, unlike the BNB Beacon Chain, BSC has high compatibility with smart contract functionalities and the Ethereum Virtual Machine (EVM).
BSC utilizes a consensus algorithm called Proof-of-Staked-Authority (PoSA), which is a combination of Delegated Proof of Stake (DPoS) and Proof of Authority (PoA) mechanisms. This provides programmability and interoperability with the BNB Beacon Chain. Validators are incentivized through transaction fees generated from the blocks they validate.
PoSA employs a system of elected validators based on the number of tokens they hold. These validators take turns verifying transactions and adding them to the chain of new blocks. In the event of a malicious attack that takes a validator offline, backup validators known as "Candidates" are responsible for security. They can report the situation to the Beacon Chain, resume processing on BSC, and propose the re-election of active validators.
BSC was created to provide smart contract functionality. It adopts the BEP-20 token standard and operates as a layer compatible with decentralized applications (DApps), decentralized finance (De-Fi) services, multi-chain support, and other Web3 applications, all while being compatible with the Ethereum Virtual Machine (EVM). Essentially, the BNB Beacon Chain and the BSC blockchain operate in parallel. BSC is not a so-called layer 2 or off-chain scalability solution. Since BSC is compatible with the EVM, it supports Ethereum tools and DApps, making it easy for developers to migrate projects from Ethereum to BSC, and allowing users to seamlessly integrate applications like MetaMask with BSC.
• Short Block Time
BSC aims to achieve a short block time of up to 3 seconds on its live blockchain (mainnet). This means transactions can be processed quickly, allowing for faster confirmations and reducing potential delays.
• Rapid Transaction Confirmation
BSC confirms transactions swiftly. Once a transaction is included in a block, it is finalized and cannot be reversed or altered. This feature enhances the security and reliability of transactions on BSC.
• Non-Inflationary Model
BSC adopts a non-inflationary model for its native BNB coin. Unlike traditional inflation models where new coins are generated through mining, BNB block rewards are collected from transaction fees. This mechanism helps maintain a stable and predictable supply of BNB over time.
• Ethereum Virtual Machine (EVM) Compatibility
BSC is fully compatible with the EVM. This compatibility allows developers to quickly migrate existing Ethereum-based applications and smart contracts to the BSC ecosystem. It also provides users with a familiar environment and access to a variety of DApps.
• Proof-of-Stake (PoS) Governance
BSC uses a Proof-of-Stake governance mechanism. PoS allows BNB holders to participate in the consensus and decision-making processes of the network. By staking BNB tokens, holders can contribute to block validation and participate in voting on network upgrades and proposals.
BNB is the native utility token of the BSC ecosystem. It is used for paying transaction fees on the Binance exchange and the BNB Beacon Chain, as well as for staking and asset transfers. BNB is also utilized for executing smart contracts on BSC. The gas fees paid for blockchain transactions on BSC can be settled in BNB.
Similar to ETH on the Ethereum blockchain, the gas fees on BSC provide incentives to validators for confirming transactions and securing the network. BNB holders who wish to earn additional BNB or contribute to network security can stake BNB in smart contracts. They can also delegate their stake to BSC validators to earn a portion of the block rewards. Validators can decide how much of the BNB collected from gas fees to redistribute to their delegators.
BSC has introduced new functionalities and greater customization through smart contracts, facilitating explosive growth in decentralized applications (DApps) and Web3 services. Smart contracts are applications (programs) executed via the blockchain, which carry out specific tasks (contract terms) when certain conditions are met. By using smart contracts, the need for a third party to act as an intermediary is eliminated, significantly reducing operational costs.
The smart contracts on BSC consist of contract code and two public keys. The first public key is provided by the contract creator, while the other represents the contract itself and serves as a unique digital identifier for each smart contract. All smart contracts are built through blockchain transactions and can be activated only when called by an EOA (Externally Owned Account) or another smart contract. However, the initial trigger is always initiated by an EOA (user).
The smart contracts on the BSC network have the following features:
• Trust and Transparency
Once the terms of a contract are recorded in a smart contract, none of the parties can change the contract conditions for personal gain. Additionally, all parties can view the terms, allowing everyone to track the execution of the contract and review information about the transactions.
• Security
Each record on the smart contract is linked to both preceding and succeeding records. This means that a hacker would need to reconstruct the entire chain to alter a single record on the ledger. While the records of smart contracts are accessible to anyone, the anonymity of the parties involved is maintained. Names and other private details of the parties are not disclosed.
• Automation
Conventional contracts may allow one or both parties to ignore specific aspects of the agreement, implement the contract differently, or fail to fulfill it altogether. However, such actions are impossible with smart contracts due to their automation feature. Since all tasks in a smart contract are completed mechanically, there is no need for any form of intermediary. Moreover, as everything is handled by software, there is no possibility of data manipulation or failure to comply with parts of the contract.
• Reduced Expenses
All parties involved in a smart contract can verify every transaction perfectly, eliminating the need for any intermediaries to perform and monitor complex payments. Instead, everyone can streamline all operations in real-time, meaning no fees or charges are incurred.
• Accuracy, Efficiency, and Agility
The automation feature of smart contracts enhances the speed of every step involved in contract execution. The programming ensures that the contract is fulfilled while maintaining accuracy. Once the prerequisites for executing the contract are met, the necessary actions are carried out immediately, consistently applying to any contract.
BEP-20 is the most common token standard of the BSC network, extending the ERC-20 of the Ethereum network. It can be described as the blueprint of a token that defines how the token is used, who can use it, and other rules regarding its usage. Designed as part of BSC's technical specifications, BEP-20 allows developers to create various digital assets, including NFTs and utility tokens. Because BEP-20 shares many similarities with BEP-2 of the BSC network and ERC-20 of Ethereum, it is compatible with both BEP-2 and ERC-20.
BEP-20 aims to provide a flexible format for developers to launch a variety of tokens. This can represent everything from corporate shares to dollars stored in bank vaults (e.g., stablecoins).
Like BEP-20 tokens, native assets can be created or tokens from other blockchains can be pegged to be used on BSC. This is facilitated by Peggy coins, which are essentially BEP-20 versions of other cryptocurrencies. BEP-20 is known as Peggy coins because cryptocurrencies from other blockchains can be pegged to BEP-20.
Similar to the BEP-2 tokens on Binance Chain (BC), BNB is used for transferring BEP-20 tokens. This incentivizes validators to include the transaction in the blockchain, as BNB is collected as the fee for the transaction.
BSC is an extension of Binance Chain (BC). In a dual-chain architecture, the two chains complement each other. In other words, BSC supports decentralized applications (DApps) without bottlenecking the original chain, optimizing it for ultra-fast transactions. This architecture has significantly emphasized cross-chain compatibility, allowing BEP-2 tokens to be exchanged on par with BEP-20.
