Binance Smart Chain vs. Ethereum: What's the Difference?
Introduction
At first glance, Binance Smart Chain (BSC) and Ethereum look very similar. DApps and tokens built on BSC are compatible with the Ethereum Virtual Machine (EVM). You might have noticed that your public wallet addresses are the same on both blockchains. There are even cross-chain projects that operate on both networks. Nevertheless, there are some noticeable distinctions between the two chains. If you're wondering which one to use, it's best to know and understand the differences.
Transfers between networks
If you've made any BEP-20 or ERC-20 deposits into your wallet, you might have noticed your Ethereum and BSC wallet addresses are identical. So, for example, if you choose the wrong network when withdrawing your tokens from an exchange, you can easily retrieve them from the other blockchain.
If you accidentally withdraw ERC-20 tokens to BSC, you can still find them in the corresponding BSC address. You can also go through the same process if you accidentally send tokens from BSC to Ethereum. In both these cases, your funds are fortunately not permanently lost.
Transaction time
Measuring average transaction times on blockchains can be a bit tricky. While a transaction is technically complete once miners validate the block it is in, other aspects can affect the time you wait:
If you haven't set your fee high enough, miners might delay your transaction or even not include it in a block at all.
More complex interactions with the blockchain require multiple transactions. For example, adding liquidity to a liquidity pool.
Most services will only consider a transaction valid after a certain number of blocks are confirmed. These extra confirmations reduce the risk of merchants and service providers having the payments reverted in case the block is rejected by the network.
If we look above at the gas statistics for Ethereum, we can see that the transaction time ranges from 30 seconds to 16 minutes. These numbers take into account successful transactions but not the extra confirmation requirements.
For example, if you deposit ETH (ERC-20) into your Binance account, you will need to wait for 12 network confirmations. With a block mined roughly every 13 seconds, as you can see from the diagram below, this would add an extra 156 seconds when depositing ETH into your spot wallet.
Blockchain traffic and DApp ecosystem
As of June 2021, Ethereum hosts more than 2800 DApps on the blockchain compared to roughly 810 on BSC. It's a significant difference, but considering BSC's young age, it shows a strong and growing ecosystem.
Active addresses are also an important on-chain metric to consider. Despite being a newer blockchain, BSC recorded a high of 2,105,367 addresses on June 7, 2021 – more than double Ethereum's all-time high of 799,580 addresses on May 9, 2021.
So what's the reason behind BSC's sudden massive growth? A lot of it comes down to faster confirmation times and low fees. The BSC growth might also be related to the growing hype around NFTs and the compatibility with popular crypto wallets, such as Trust Wallet and MetaMask.
If we look at daily transactions, there's an even larger difference between the two. On BSC, it’s quicker and more cost-efficient for users to move their funds and interact with smart contracts. You can see below BSC's peak of around 12 million daily transactions and its current status at over four million.
At first glance, Binance Smart Chain (BSC) and Ethereum look very similar. DApps and tokens built on BSC are compatible with the Ethereum Virtual Machine (EVM). You might have noticed that your public wallet addresses are the same on both blockchains. There are even cross-chain projects that operate on both networks. Nevertheless, there are some noticeable distinctions between the two chains. If you're wondering which one to use, it's best to know and understand the differences.
Transfers between networks
If you've made any BEP-20 or ERC-20 deposits into your wallet, you might have noticed your Ethereum and BSC wallet addresses are identical. So, for example, if you choose the wrong network when withdrawing your tokens from an exchange, you can easily retrieve them from the other blockchain.
If you accidentally withdraw ERC-20 tokens to BSC, you can still find them in the corresponding BSC address. You can also go through the same process if you accidentally send tokens from BSC to Ethereum. In both these cases, your funds are fortunately not permanently lost.
Transaction time
Measuring average transaction times on blockchains can be a bit tricky. While a transaction is technically complete once miners validate the block it is in, other aspects can affect the time you wait:
If you haven't set your fee high enough, miners might delay your transaction or even not include it in a block at all.
More complex interactions with the blockchain require multiple transactions. For example, adding liquidity to a liquidity pool.
Most services will only consider a transaction valid after a certain number of blocks are confirmed. These extra confirmations reduce the risk of merchants and service providers having the payments reverted in case the block is rejected by the network.
If we look above at the gas statistics for Ethereum, we can see that the transaction time ranges from 30 seconds to 16 minutes. These numbers take into account successful transactions but not the extra confirmation requirements.
For example, if you deposit ETH (ERC-20) into your Binance account, you will need to wait for 12 network confirmations. With a block mined roughly every 13 seconds, as you can see from the diagram below, this would add an extra 156 seconds when depositing ETH into your spot wallet.
Blockchain traffic and DApp ecosystem
As of June 2021, Ethereum hosts more than 2800 DApps on the blockchain compared to roughly 810 on BSC. It's a significant difference, but considering BSC's young age, it shows a strong and growing ecosystem.
Active addresses are also an important on-chain metric to consider. Despite being a newer blockchain, BSC recorded a high of 2,105,367 addresses on June 7, 2021 – more than double Ethereum's all-time high of 799,580 addresses on May 9, 2021.
So what's the reason behind BSC's sudden massive growth? A lot of it comes down to faster confirmation times and low fees. The BSC growth might also be related to the growing hype around NFTs and the compatibility with popular crypto wallets, such as Trust Wallet and MetaMask.
If we look at daily transactions, there's an even larger difference between the two. On BSC, it’s quicker and more cost-efficient for users to move their funds and interact with smart contracts. You can see below BSC's peak of around 12 million daily transactions and its current status at over four million.