3 reasons why Ethereum is still better than the Binance smart chain
Many newcomers to the crypto space are currently grappling with the following question: is the Binance Smart Chain better than Ethereum?
We looked at the numbers and still Ethereum is the number one smart contract blockchain. Especially when it comes to Bitcoin Circuit review Decentralised Finance (DeFi), Ethereum is still leading- but why is that?
Below we take a look at three important factors in which the Ethereum Blockchain of the Binance Smart Chain.
1. ethereum is more decentralised than the BSC.
One of the criticisms of the Binance Smart Chain is that projects on the BSC cannot really be called Decentralised Finance. This is because the BSC is significantly more centralised than the Ethereum blockchain.
Ethereum has almost 30 times as many unique blockchain addresses as the Binance Smart Chain. Data from Etherscan and BSCscan shows that Ethereum currently comes in at almost 140 million accounts, while the BSC has just over 5.4 million individual accounts.
Furthermore, the data shows that the 10 largest addresses in the Binance smart chain own more than 80 percent of the total BNB tokens. In comparison, the 10 largest Ethereum addresses come to just under 20 percent of the total ETH holdings.
In addition, the Ethereum blockchain has just over 10,000 nodes participating in the proof-of-work network. In comparison, the BSC has just 21 validators, a very large proportion of which are owned by Binance.
This means that the ETH blockchain is significantly more resistant to censorship than the BSC at the moment. This also makes Ethereum a lot safer, as it is incomparably more expensive to manipulate the Ether Blockchain. On the BSC, validators could be forced to make certain decisions or even be corrupted, which is why Ethereum is still miles ahead of the Binance Smart Chain in terms of decentralisation.
2. ETH DeFi has more trading volume and liquidity.
According to data from crypto analytics platform DappRadar, Ethereum processed over $112 billion worth of transactions last month. BSC only processed transactions worth US$15 billion in the same period.
Moreover, the Total Value Locked (TVL) in DeFi, i.e. the capital managed by DeFi protocols, is still almost four times higher on ETH than on the BSC. The TVL in Ethereum DeFi is currently just under $40 billion and $10 billion for BSC DeFi projects.
3. does BSC really have more daily transactions than Ethereum?
At first glance, data from Etherscan and BSCscan show that BSC’s daily transaction count outnumbers Ethereum’s by a ratio of 2:1. On 19 February, BSC even recorded over three million transactions in a single day. In comparison, Ethereum’s daily transaction count has never been able to rise above 1.5 million.
On Twitter, Binance CEO Changpeng Zhao celebrated this historic event with the following message:
There are now three times as many daily transactions on BSC as on ETH. If developers don’t use BSC, they miss out on 75 percent of their potential market.
But not everyone trusts these numbers. One Twitter user took issue with the Binance CEO, pointing to a smart contract that generated over 750,000 transactions in total.
According to the user, the transactions were generated by a bot of the decentralised exchange PancakeSwap (CAKE), which artificially inflated the transaction volume of the BSC. For this reason, it is currently difficult to say how many of the transactions on the Binance Smart Chain are actually real. Due to the enormous growth of the BSC in recent weeks, it is quite possible that this has not happened completely organically. And because the transaction fees on the Binance Smart Chain are so low, they are also very easy to manipulate.
There is no denying that Ethereum is currently struggling with extremely high transaction fees that are deterring new users. If you have to pay 50 to 100 US dollars for a single transaction, it no longer makes sense for many users to use Ethereum.
Nevertheless, at the moment, those who are willing to pay extra for Ethereum’s decentralisation and ecosystem with dozens of DeFi apps and millions of users are still in the majority.
Users who can no longer afford Ethereum will either switch to ETH scaling solutions or even migrate away from the Ethereum Blockchain altogether. BSC seems to be the number one blockchain among the latter at the moment. But soon, projects such as Polkadot (DOT) or Cardano (ADA) will see even more blockchains vying for this spot.