What is Binance Chain? The Complete Guide to Binance Chain
What does Binance Chain mean? How will projects moving to Binance’s private chain affect the price in the market?
On April 18, Binance Chain successfully launched the first Block Genesis.
At the same time, the Coin98 team also received a lot of information about the launch of projects on the mainnet of Binance Chain.
What does Binance Chain mean? What impact will the projects moving to Binance’s private chain have on the price in the market… and the entire crypto ecosystem?
What is the Binance chain?
Binance Chain is a private Blockchain developed by Binance. This idea has been cherished by the Binance team since the early days of building the project.
Binance Chain is similar to the infrastructure in the crypto ecosystem that Binance wants to build. Based on its own Blockchain, Binance will develop other platforms and products.
The first application of Binance Chain is the decentralized exchange Binance DEX.
Binance DEX and Binance Chain launched Testnet this past February. You can review the Binance DEX explanation to learn more.
Binance Coin (BNB) will be the base coin on Binance Chain. After Binance Chain goes live, all ERC20-compliant BNB tokens will be swapped to the new BEP2-compliant chain.
You will see that the role of BNB is similar to that of Ether on the Ethereum network.
Furthermore, you can create your own wallet on Binance Chain.
Or, you can use the wallets that Binance Chain supports such as Trust Wallet mobile wallet, Ledger Nano S hardware wallet and some more wallets that will be added soon.
The Purpose of Building Binance Chain
Binance Chain is tied to the vision of the Binance team, which is: Create a private Blockchain to issue digital assets and trade them in a decentralized way.
With the introduction of Binance Chain, you can:
- Send and receive BNB.
- Issue new tokens on the platform of Binance Chain.
- Send, receive, burn, freeze or release tokens.
- It is proposed to create a trading pair between two different tokens.
- Send orders to buy or sell assets through trading pairs created on Chain.
Design Principles of Binance Chain
Key principles that Binance used to design Binance Chain:
- Binance will not need your money, but you will be the one to hold the Private Key and control your own assets.
- Works with high performance, low latency with large user base.
- Reduce costs.
- Easy to use platform (similar to Binance.com).
- And is likely to grow in the future.
How will BEP2 standard BNB be different from ERC20 standard BNB?
With the release of its own chain, BNB will become a Native Token on Binance Chain. Currently, the total supply of BNB is around 200 million tokens.
The current amount of BNB is not “mined more” but only burned or “frozen” on the Binance Chain Blockchain.
The amount of BNB burned through coin burn is the same as the amount of ERC20 standard BNB burned.
After the launch of Binance Chain, all ERC20-compliant BNB tokens will be swapped to BNB coins on the Binance Chain chain.
All users who already hold ERC20 BNB can deposit coins to their account on Binance.com.
Binance will automatically convert the coins on the network to your personal wallet.
Binance Chain Testnet
The Testnet was launched by Binance on February 20, 2019. I introduced about Binance testnet in the article Binance DEX.
In the Testnet version, users were able to test many key functions of the mainnet such as:
- Create a BNB wallet.
- Check block information, transaction information BNB
- Get acquainted with the Binance Chain interface.
Binance Chain Mainnet
After the Testnet, Binance has announced that the official Mainnet launch time is on April 23, 2019.
Binance Chain Mainnet Swap
To prepare for the Mainnet transition, you need to pay attention to the following information and timelines:
- On April 18, 2019, selected Validators will connect to the network to start creating new consensus blocks from Block Genesis.
- Binance Coin (BNB), the main coin running on the Mainnet of Binance Chain will be generated from Block Genesis.
- The total initial supply of BNB will be 200,000,000.
- Like the ERC20 version of BNB, 11,654,398 BNB coins of the total BNB supply will be burned on the Binance chain.
- And just like ERC20 BNB, 48,000,000 BNB will be frozen.
- The first batch of 5,000,000 BNB will be allocated and deposited to an address belonging to Binance.com to convert an ERC20 version of BNB to current holders.
- Binance will also burn 5,000,000 BNB ERC20, to keep the total supply of BNB constant.
- After many users convert to BNB BEP2, more BEP2 coins will be issued and the amount of ERC20 BNB will be burned proportionally to keep the total supply on both networks unchanged.
- Binance Chain Explorer and Web Wallet will be available to test partners.
Currently there will be no trading pairs listed on Binance Chain until the first BNB swap.
If everything goes according to plan, you can provide a wallet address on Binance Chain to fulfill requests to withdraw BNB to your personal wallet.
The withdrawal will then act as a mechanism to convert BNB ERC20 into BNB BEP2 derived from Binance Chain.
Please note that ERC20 standard BNB tokens are temporary. All BNB tokens will be transferred to Binance Chain. After April 23, Binance.com will NOT support withdrawal of BNB ERC20 tokens.
For any exchanges currently supporting trading with BNB, they are also encouraged by Binance to follow the stated method of converting BNB ERC20 to BNB BEP2.
Binance.com will continue to support ERC20 BNB deposits for the foreseeable future.
However, Binance encourages you to deposit BNB ERC20 on the exchange and withdraw BNB BEP2 within 90 days.
Get familiar with the Binance Blockchain Explorer interface
To understand Binance Chain, first of all, let’s get acquainted with the interface of Binance Blockchain Explorer.
Please access the Binance Chain Testnet link: explorer.binance.org/
Through this interface, you can view information about blocks that have been added to the chain, transactions that have occurred on the Blockchain, wallet balance and information about Binance Coin (BNB).
Instructions for viewing transaction information
To search for blocks, transactions, assets or wallet addresses, you can do so through the search bar on Binance Chain Explorer.
Right on the homepage, you can view the price, market capitalization and trading volume of BNB.
- In the Transactions section, you can observe the last 6 transactions on Binance Chain. You click “View All” to see all transactions.
- When viewing all transactions, you can find TxHash (or transaction ID), block number, transaction type (order, cancel order or transfer), send and receive wallet addresses if it is a coin transfer transaction. .
- You click on TxHash to see transaction details.
- On the homepage, you can see the information of the 10 most recent blocks on Binance Chain. To see more, please click “View All”.
- You will see information about the number of blocks, the time the block was created, the number of transactions in the block, the node that created the block and the fees associated with that block.
- To view detailed information of a specific block, click on that block number. The interface will switch to a new page with block information as shown below.
Information of other tokens issued on Binance Chain
You can also view all assets issued on Binance Chain via the Explorer browser.
The information of that asset will include the name, capitalization, price, total supply and wallet address of the creator.
How to issue 1 private token on Binance Chain
Binance Chain allows you to create a new asset in the form of a token. As long as you can pay the fee and provide appropriate property information.
The information you need is as follows:
- Name: You enter a string of less than 21 letters. Example: Cointoken.
- Symbol: You enter a symbol sequence of less than 9 letters. This string must include the characters 0-9 and A-Z.
- Total Supply: The required total supply is a positive number less than or equal to 90 billion.
- Mint-able: This is a choice later on whether your token can increase the Total Supply or not.
Learn about the technology behind Binance Chain
Binance Chain Testnet currently has only 11 nodes. The number of nodes is small and each node is quite large. These 11 nodes also participated in the creation of the Genesis Block.
In an interview, CZ said there is no limit to the number of validating nodes. However, Binance Chain has a small number of nodes to maintain high performance.
The current TPS on Binance DEX is around several thousand transactions per second. CZ shared that Binance can increase TPS as soon as they want.
However, the current top goal of Binance DEX is stable operation. And, can handle the same high volume of transactions as the current version of Binance.com.
Therefore, TPS and scaling issues will be resolved by Binance later.
Currently, the fees and gas collected by the nodes will be kept entirely by the node, Binance Chain does not collect those fees.
Binance Chain does not support Smart Contracts
Binance’s blockchain is just an interface for you to issue tokens and then trade those tokens.
Binance Chain is a very simple chain in terms of application, but can handle very large payloads.
In CZ’s opinion, payload will be more important than other features.
What is the consensus algorithm used on Binance Chain?
Binance Chain uses a consensus mechanism based on BFT and PoS (coming soon) to generate blocks in a series of validations from validators.
This is similar to the system of some popular Blockchain platforms today such as EOS and NEO.
The process of establishing validation between different Validators on the Binance Chain is currently being defined.
I will share more with you when I get detailed information from Binance.
How to become a Validator node on Binance Chain?
A full node will contain all the information and application logic of the Binance Chain.
A node can receive, access and transact with other blocks, even becoming a validator.
The only exception is that nodes will not participate in the consensus if the node is not a Validator.
However, the process of starting Validator nodes on the Mainnet is still in progress.
We will wait for more time for Binance to announce this soon.
Risks of using Binance Chain Testnet?
Because it is only a Testnet version, you should pay attention to avoid unfortunate risks.
- It is not recommended to send real tokens to the Binance Chain Testnet wallet. Because this is just a trial version.
- Do not share your mnemonic phrase and private key with anyone.
- You must store the mnemonic phrase and private key when creating the wallet.
- Do not use untrusted Trading Bots.
- Do not place large orders at once.
If you send the wrong token to Binance Chain
Binance will generally not support the recovery of misplaced tokens/coins. Therefore, it will be very risky when you transfer the wrong token to the chain.
If you have a big loss, Binance may (just maybe) assist with token/coin recovery.
But the process is extremely complicated, costly, time consuming and carries great risks.
For support, you need to provide your Binance account email, coin name, wallet address, sent coin number, txid (important), transaction screenshot. The Binance team will base on what you guys provide to evaluate if there is support or not.
And, this restore can take more than 1 month.
Therefore, you must be extremely careful when transferring coins. Please check carefully the wallet address, which coin with which wallet before transferring.
Some other notable points about Binance Chain
Cosmos is a decentralized network that connects independent parallel Blockchains.
Cosmos uses the BFT (Byzantine Fault Tolerant) consensus algorithm like the Tendermint consensus algorithm.
As I said above, Binance Chain uses DPoS, Cosmos, and Tendermint. The development team combines these 3 algorithms to create a consensus algorithm of Binance Chain.
Cross-chain operations (interchain)
Interchain is a cross-chain operation, or a link operation between two different chains, running in parallel.
Binance is currently undecided on whether or not Binance DEX has Interchain operations.
As I have shared, CZ is focusing on the goal of making Binance DEX an exchange capable of handling volume like Binance.com today.
Therefore, advanced features like Interchain will probably be developed by the Binance team after the exchange’s platform is stable.
Binance Chain Wallet (BEP2)
The first wallets supported on Binance Chain include: Trust Wallet, Enjin, Ledger, Cool Wallet S, Coinomi, Atomic, Zelcore Wallet, Infinito, and Math Wallet.
Binance Chain & the 1st 5 year plan
Binance has proven itself to be more than just a centralized cryptocurrency exchange. They built a lot of new products, regardless of the exchange.
I am clearly seeing the big vision and ambition of Binance in the crypto ecosystem. They are trying to become the basis for a lot of other crypto projects.
Is the exchange with the largest volume. Now, Binance has completed the decentralized exchange, having both its own wallet and its own chain.
And, they have done a lot of things, even doing it very well compared to today’s crypto projects.
Through today’s article, have you grasped the necessary information about Binance Chain?
If you have any questions, or comments about Binance Chain, please let Idolmeta.net know!