CZ: The binance chain "Do not defy Ethereum"

Changpeng Zhao ("CZ"), co-founder and CEO of Binance, seems to be trying to moderate the expectations of his company's new and much-awaited channel by pointing out that some existing projects currently running on Ethereum might migrate to Binance Chain. to take advantage of his superior speed, he should not be considered an "Ethereum killer".

What is the binance chain?

Here's what the Binance team wrote about Binance Chain on March 13, 2018, the day the project was officially launched:

"As a public blockchain, Binance Chain will focus primarily on blockchain transfer and badet trading, while providing new opportunities for future blockchain badet flow." Binance Chain will focus on performance, ease of use and liquidity Binance Coin (BNB) will be enhanced on its own main blockchain network and become a local coin, while Binance will become a business and become a community. "

According to the documentation provided by Binance, the main design objectives of Binance Chain and Binance DEX (a decentralized exchange powered by Binance Chain) are as follows:

• "No guard of funds: traders keep control over their private keys and funds."
• "High performance: low latency, high throughput for a broad base of users and high cash trading Our goal is to reach a block of time for one second, with definite confirmation. "
• "Low cost: both in fees and in the cost of liquidity."
• "Simple user experience: as user-friendly as Binance.com."
• "Fair trade: Minimize upstream transactions as much as possible." "Scalable: able to grow with a stack of technologies, architecture and ideas constantly improving."

If you're wondering what you can do about Binance Chain, here's the answer:

• "Send and receive BNB"
• "Emit new chips"
• "Shipment token, receipt, engraving / mint and freezing / unblocking"
• "Suggest to create pairs of exchange between two different tokens"
• "Send orders to buy or sell badets via trading pairs created on the chain"

Why are so many people excited about Binance?

Well, here's what CZ himself said about Binance Chain on March 5 during his second session on Periscope, Ask Me Anything (AMA):

"Binance will migrate to the Binance channel as an original part, and we are encouraging other ERC-20 chips to migrate to the Binance channel." There are many benefits to doing this. … Binance Chain is a faster chain … It's super easy to create a token on Binance Chain … There are no smart contracts to program … C & # 39; is more secure … There is less room for bugs … There are about eight projects already confirmed for migration to Binance Chain since ERC-20 … These are not small projects. "

And here's what Binance apparently reported to CCN in an interview about Binance Chain and Binance DEX:

"Binance Chain was created to support the issuance and exchange of digital badets." Any project can issue new token on Binance Chain, and existing tokens that do not rely on smart contracts are welcome to migrate to Binance Chain, to trade natively on Binance DEX and enjoy the benefits of this low-latency, high-speed network. "

Comments from the CZ on Binance and Ethereum

On Thursday, April 18, after seeing CCN's tweet about an article by journalist Joseph Young about Binance, CZ sent the following answer:

Thank you for the beautiful article! But almost too favorable. lol. @Binance_DEX do not challenge Ethereum, he does not even have smart contracts. This challenges us, exchanges. 🙂

– CZ Binance (@cz_binance) April 18, 2019

CZ says two very interesting things in this tweet:

• Binance Chain / DEX "does not challenge Ethereum"
• Binance Chain / DEX "challenges us, exchanges"

It is true that the Binance chain and the Ethereum blockchain are very different. Here are some key differences between the first and the second:

• Less decentralized. As CZ acknowledged at its very first AMA session on February 7th, Binance Chain will start with a small number of validation nodes (about 11), and Binance will control the network:

"Just like EOS, we are looking for people who can execute very fast validators and protect validators from DDoS and other attacks, so that nodes will be selected first through our close partners, but we will gradually increase the number of nodes, validation nodes. "

"Do we have a lot of influence on the network and the validators?" Yes, we do, so initially we want the channel to be more centralized in this way. We'll have a little more influence, but I think it's important for us to keep this influence at the very beginning, and as time pbades, more and more validators will register, and our influence will diminish. "

• Different consensus algorithm. Binance Chain utilizes Tendermint's consensus algorithm, which offers much higher performance, much greater scalability and processing time to final settlement well below that of the consensus algorithm based on on the proof of work (PoW) of Ethereum.
• No support for smart contracts. Binance Chain has been designed for speed rather than flexibility, so Binance DEX can handle the same type of load as Binance's centralized trading platform. CZ talks about it in more detail:

"Cosmos had the closest thing we were looking for.They had a solid product, the architecture of Cosmos was closest to what we wanted.What we did was we took Cosmos – well, we took Tendermint, in fact, and so we did not use the standard SDK, so we cut and cut a lot of things, so in the Binance chain, it does not matter. There is no smart contract, we just have an interface for you to issue tokens, Binance Chain is a very simple chain of application, but it can handle very large loads. is more important than the functions. "

Two days after CZ tweeted about Binance Chain, Ethereum was not really up to the challenge, so he once again reminded everyone that Ethereum offered a lot more flexibility than Binance Chain when it was not a challenge. he corrected the Twitter user "@LarssonFuture"Who wrote why all new projects would choose to use Ethereum to issue their chips (ERC20) when they could simply use Binance Chain and take advantage of all the advantages it offers:

ETH can do a lot of other things that Binance Chain can not. @Binance_DEX just specialize on a use case.

– CZ Binance (@cz_binance) April 20, 2019

However, not all existing projects that currently work on Ethereum do not need much more flexibility from Ethereum. Thus, in some cases, despite what CZ says, Binance Chain is a competitor of Ethereum. In addition, as Multicoin Capital Management explained in its excellent detailed report on Binance Coin in February, Binance DEX, as it works with Binance Chain, solves some of the key issues posed by Ethereum-based DEXs. .

As for Binance Chain / DEX which presents a challenge for existing cryptographic exchanges, it is difficult to oppose it given what has happened in recent years with centralized exchanges such as Mt. Gox, Bitfinex, Cryptopia and Quadriga are gradually encouraging users of centralized trading to realize that it is much safer for them to keep control of their cryptobadet holdings at all times. As a result, even though DEX trading volumes are indeed centralized, more and more people are expecting DEXs to gain popularity.