How The Binance Smart Chain Is Faring With Decentralization
Hate Binance or love Binance, the world’s largest cryptocurrencies exchange by daily trading volume has done well for itself since its launch in 2017.
Source: Cointmarketcap.com
But what led to the rise and dominance of Binance? And how is Binance’s own platform — Binance Smart Chain — fairing in these decentralized markets?
We’re going to tackle these and more questions in this post. Let’s get straight into it.
The role centralized markets played in the birth of decentralized systems
In order to understand why digital currencies and decentralized platforms have proved so popular, you have to take a look at the way traditional finance systems are structured.
It is no secret that when markets are centralized there is a lot of gatekeeping that takes place. Regulators and shadow agents make efforts to keep certain players outside in a show of power.
This power play is perhaps one of the biggest reasons decentralized finance (DeFi) has gained traction and enjoyed considerable success in such a short space of time.
You see, decentralized systems are open-to-all, eliminate the need for brokers or banks, and typically offer lower transaction fees.
Many are also drawn in by the fact that they don’t need to provide Social Security numbers or proof of address to trade on many of these DeFi exchanges and can hence remain anonymous.
All of this, coupled with the fact that we now have the technology to build dynamic new finance systems, has made it possible for platforms like Binance Smart Chain to thrive.
But just what is Binance Smart Chain?
Binance Smart Chain explained
Coinmarketcap.com defines Binance Smart Chain (BSC) as a:
“…blockchain network built for running smart contract-based applications.”
To put it in simpler terms, BSC is a cheaper decentralized applications (DApps) platform that:
· digital currency users can rely on to manage their cryptocurrencies and
· developers can lean on to design DApps.
How Binance Smart Chain squares up in the decentralized market
One of the best ways to evaluate BSC progress is to contrast it with a rival — Ethereum.
For a platform that’s not even 5-years old, BSC has made enough headway to warrant being the leading alternative for developers and investors fleeing Ethereum’s gas fee problems and congestion. Here is the evidence to prove it including insightful differences:
However…all that glitters isn’t gold
If you’ve read this far you might be tempted to think that all is well with Binance. Unfortunately in this Wild West of emerging financial systems, this is hardly ever the case. And this post would be incomplete without mentioning the numerous controversies surrounding Binance as a company.
To date, Binance has been banned in the U.S. and is currently under investigation for alleged money laundering issues. In June 2021, the U.K. issued a moratorium on all BSC trading.
A slew of other countries including Thailand, Japan, and Malta have also publicly issued statements about Binance not having the required licenses to do business in those countries.
But then again this is the advantage of decentralization, in spite of all these restrictions, users are still finding ways around and continue to trade.
So, how is Binance Smart Chain faring with decentralization? After all considerations, one could surmise that Binance Smart Chain is not going anywhere, anytime soon.