BNB vs ETH, the battle between two prominent networks in crypto space. However, there is no formal confirmed competition between Ethereum and Binance Smart Chain. But their format, structure, and preference for traditional and new projects are sufficient to indicate the competition between BNB and ETH. In depth analysis and comparison of networks might clear the BNB vs ETH.
The whole crypto space turned out to be a sea full of cryptocurrencies, networks, projects, etc. From only one bitcoin blockchain to today, hundreds of blockchain networks for various purposes other than just transactions, the space has evolved to a large extent. Distributed ledger technology or blockchain technology has become the basis for crypto-assets and solutions to run upon. Now developers and creators of projects use the technology and build on networks like Ethereum and Binance Smart Chain.
Reason behind BNB vs ETH can begin from their individual emerging insights
Smart Chain Pioneer – Ethereum Blockchain network
As mentioned earlier, blockchain emerged as a network to support transactions, making it faster, decentralized, permissionless, beyond the boundaries and a bunch of new ways to look at payments. All that went on until the revolution in technology, which is seen as a revolution, the development of smart contracts. Ethereum was the first to bring the smart contract features to its chain. In 2015, Russian-Canadian programmer Vitalik Buterin co-founded the Ethereum network, which made a huge impact in the contemporary scenario of blockchain technology.
From just a chain turned to a Smart chain – Binance Smart Chain
The largest crypto exchange platform globally, Binance launched in 2017 to perform its task related to serving users and clients for crypto trading, investing, and payment services using the Binance chain. Eventually, when the company observed the scope of smart contracts in terms of DeFi and DApps evolution, and much more, the Binance chain enabled smart contracts and became Binance Smart Chain. However, the Binance Smart Chain was developed just by changing some codes here and there, making it compatible, and the largest crypto exchange has launched its smart chain. Soon enough, Binance Smart Chain got popular and adopted to a large extent since it’s also an open smart chain and has very few issues compared to Ethereum.
The key discussion point that both BNB and ETH networks make differences are
- Decentralization
- Scalability
- Transaction speed
- Gas Fees or transaction fees
- Consensus Mechanism
- Market Cap
- Total and Current Supply
- Number of projects on Blockchain
- Future updates
| ETH | BNB | |
|---|---|---|
| Decentralized | Completely decentralized | Somewhat centralized as ran by the company |
| Scalability | Hardly scalable | Comparatively more scalable |
| Transaction Speed | Around 30 transactions per sec | Perform approx 300 transactions per |
| Gas Fees | Could go upto $15 to $50, currently more than $2 | Around $0.32 |
| Consensus Mechanism | Proof of work | Proof of stakes (authority) |
| Market Cap | $375,116,091,294 | $68,380,291,201 |
| Total & current Supply | 120,118,363 ETH | 165,116,761 BNB |
| Number of projects | More than 3000 | More than 500 |
Which is the most decentralized — BNB or ETH
For Ethereum, it clearly can be said that the first smart chain network is community-driven, which makes it a decentralized blockchain network. While the Binance exchange platform company itself drives Binance Smart Chain, that makes it a somewhat centralized chain. Following the blockchain trilemma, which states that all three components of a blockchain that are decentralization, security and scalability are hard to get all together. At a specific moment, it is only possible to have only two of them while compromising on one that could be left out. Later on, we would take its preference while discussing other factors.
Both the blockchain networks are open source chains that make it easy for developers and creators to have their projects, either Dapps or DeFi protocols, on either of the networks according to their convenience.
Scalability and Security on Ethereum and Binance Smart Chain
Both the blockchain networks are at their level best in terms of security. Regarding scalability, here’s where Ethereum lags behind the Binance Smart Chain network as the former is least scalable compared to the latter. Recalling blockchain trilemma, compromising on decentralization makes BSC able to cater to scalability issues, and the firm could deploy infrastructure to maintain it. While being a decentralized and vast blockchain network, any upgrade on Ethereum is far more typical, due to which it faces congestion.
Which network is Faster and cheaper in terms of transactions
Scalability solves the issue with the speed in any blockchain network. It makes transaction speed faster on Binance Smart Chain than Ethereum network. Transaction speed on BSC could go upto 300 transactions per second, while for Ethereum, it’s barely 30 transactions.
Transaction speed directly affects the transaction or gas fees of the network. A network with high congestion is more likely to have high transaction fees, making transaction fees high on ETH networks than on BSC. The average transaction cost on the Binance network could go around $0.32 per transaction, while on Ethereum, it could go more than $15 to $50, and even at the time of high congestion, it could go upto $100.
The consensus Mechanism differs for both ETH and BNB
For validation of transactions approval, networks use different consensus mechanisms, and all have their advantages. Proof of work consensus mechanism on Ethereum makes the process more decentralized but poses high energy consumption and environmental threat. On the other hand, Proof of stakes allows a handful of validators to authenticate the transaction, saving vast amounts of energy. Still, it makes the process somewhat centralized and limited to a few people.
Market cap and supplies of both ETH and BNB
The total supply of cryptocurrencies defines if they are inflationary or deflationary while multiplying the supply by the current market price defines market capitalization. In terms of the total supply of a cryptocurrency, Ethereum has around 120,118,363 ETH, while Binance Smart Chain currently possess 165,116,761 BNB. Ethereum is the second-biggest cryptocurrency with around a $400 billion market cap. In comparison, the BSC network has a market cap of over $71 billion, making it the fourth-largest cryptocurrency in the crypto market.
Current projects on ETH and BNB networks and their plans
Both are smart contract-enabled blockchains that are open source, making them accessible to anyone wanting to create or develop projects related to DeFi, such as DEX or similar DApps. Newly evolved concepts of NFTs brought all new usability of smart chains along with their popularity and necessity. Many projects use both ETH and BSC as most of the prominent and popular projects are either NFTs or DeFi based on these two. However, since the Ethereum network is here since a very long and comparatively Binance smart chain is recent, ETH is far ahead of BSC.
Projects like Uniswap, MakerDAO, Chainlink Aave, 1inch, Sandbox, Curve Finance and a lot more are based on the Ethereum network, while PancakeSwap, FTX, Dogecoin, Venus, Swipe like projects are using Binance Smart Chain.
The future of both these chains can be assumed to be far better with upcoming updates, especially on the Ethereum network, with the highly anticipated upgrade of the network becoming Ethereum 2.0. Since Binance somewhat owns Binance Smart Chain, any upgrade and resolving an issue on the smart chain is far more accessible than on a decentralized and gigantic Ethereum network. However, current development on the Ethereum network would bring features and capacity like never before. For instance, the consensus mechanism would shift from PoW to PoS, transaction speed is estimated to go upto 100,000 transactions per second, and a lot more upgrades would place the Ethereum network at unimaginable heights. So no matter today, BSC seems a better option than ETH in many terms, but the future holds a lot for the latter.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2022/04/13/bnb-vs-eth-lets-face-it-is-the-actual-neck-to-neck-in-the-whole-cryptosphere-but-why/