Ethereum (ETH) is in trouble due to excessive transaction costs. As a result, many projects and users are turning to alternative platforms, including Binance Smart Chain (BSC), Cardano (ADA) and Harmony (ONE). While BSC ranks among Ethereum rivals, research firm Messari is less convinced of the network. For example, the degree of centralization within this network would be high.
Various projects can be found on the crypto market. Many of these projects run on their own blockchain, which in turn runs on a self-developed technology. Similarly, Binance Smart Chain. That network runs on a Proof of Staked Authority (PoSA) protocol. Ethereum, on the other hand, runs on a Proof of Work (PoW) protocol, which means that miners have to perform intensive tasks to process transactions. This is difficult to scale and is therefore the reason for the high transaction costs.
BSC solves this by not having thousands of miners do the work, but a select group of validators. The network consists of 21 active validators who approve transactions. Because there are so few of them, the network can scale up faster and better to process more transactions faster. But these 21 active validators are chosen every day by Binance Chain, the blockchain that does not run smart contracts. Binance Chain consists of only 11 validators. Basically, the 21 validators on the Binance Smart Chain are chosen by the 11 validators on the Binance Chain:
In a follow-up tweet, the researcher states:
“It’s hard not to assume that every Binance Chain validator is connected or bound to Binance in some way.
They take turns producing blocks [containing transaction data] in a seemingly predefined sequence. There does not appear to be a weighted stake mechanism to determine which one produces the next block. ”
Despite the particularly good performance of Binance coin (BNB), the underlying network seems to be quite centralized. And that in itself is not a problem; there may also be a place in the digital future for more centralized networks. Although it cannot compete directly with Ethereum in the field of full decentralization.
“If you really think BSC has reached the supremacy of smart contract and will become the settlement layer of the world, then you’re on the crack.”