The blockchain ecosystem is in the constant quest for optimal platforms by both users and developers. And today we’re exploring this dynamic by comparing two leading contenders: Ethereum and BSC.
This article is a breakdown of the main differences between BNB Smart Chain (BSC) and Ethereum, focusing on fees, performance, dApp ecosystem, and network efficiency.
TL;DR: While Ethereum is the crowned leader in highly secure and decentralized applications, BNB Chain fills the niche for those who need speed, low cost, and ease of use.
What is Ethereum?
Ethereum, launched in 2015, has long been the leading blockchain for smart contracts and decentralized applications (dApps), the foundation for numerous groundbreaking projects in decentralized finance (DeFi) and NFTs. It has built a strong reputation as a trusted platform in the blockchain community for security and reliability, often referred to as a hub of Web3 innovation.
Ethereum’s network, however, has faced challenges with congestion and high transaction fees, prompting the development of Layer-2 solutions like Arbitrum, Polygon, Optimism, Base, and Scroll to improve scalability.
What is BNB Smart Chain?
BNB Smart Chain (BSC), though originated as a hard fork of Ethereum in 2020 and adopted much of the same technology, implemented crucial changes to boost performance from the start. One such change is using a different consensus mechanism which allows for faster transaction times and lower fees.
This makes BSC more attractive for certain types of applications and users, especially those looking for a cost-effective and scalable solution.
BNB Smart Chain (BSC) vs Ethereum: Main Stats
The most straightforward way to evaluate the differences between BSC and Ethereum is by looking at their key metrics. The table below shows how the networks compare in their performance, cost, and ecosystem as of Q2 2024.
Data Sources: 1CoinGecko, 2Chainspect, 3Dune, 4Etherescan, 4BscScan, 5DappRadar, 6DefiLlama
These stats paint a picture, yet, let’s look further and explore what is behind these numbers.
Comparing BNB Smart Chain and Ethereum
BSC and ETH networks operate as layer-1 blockchains, both support smart contracts and similar token standards and serve as a foundation on which decentralized applications are built. However, the user experience will differ.
Performance and Fees
BNB Smart Chain’s key differences from Ethereum become clearer when comparing their performance optimization approach:
- Main scaling solution: BSC utilizes a Proof-of-Staked-Authority (PoSA) with a smaller number of validators to boost processing times, while Ethereum mainly relies on Layer-2 systems to improve the performance and lower fees;
- Transaction speed: BNB Smart Chain reduces block time from Ethereum’s 15 seconds to just 3 seconds, leading to quicker transaction confirmations;
- Throughput: BSC supports a larger block size, meaning each block can handle more transactions;
- Transaction costs: As an aftermath of all the mentioned features, BNB Chain significantly cuts costs, with average fees as low as $0.11 compared to Ethereum’s $2.5.
Let’s compare the fees in real-time by deploying the same basic smart contract on both Ethereum and BSC using Remix and MetaMask wallet connected to ETH RPC and BSC RPC API by GetBlock.
In relative terms, it is about 5x cheaper to deploy the same contract on BSC compared to Ethereum. This is while ETH gas fees are at their lowest point of the year.
Consensus and Security
Ethereum’s shift from Proof-of-Work (PoW) to Proof-of-Stake (PoS) in 2022, known as the Merge, was a significant upgrade, reducing energy consumption and laying grounds for scalability improvements while keeping the focus on security.
In contrast, BSC operates on a Proof-of-Staked-Authority (PoSA) system, which, while faster, needs significantly fewer validators, raising questions about the actual level of decentralization.
Therefore, developers are often prompted to decide which trade-off between decentralization and performance best suits their needs.
dApp Ecosystems
BNB Smart Chain having more dApps (5,446) than any other standalone blockchain shows that it is often more accessible for users and has lower barriers to entry for developers. This is due to BSC’s architecture that allows to handle more transactions per second (TPS) than Ethereum, making it the go-to choice for newer projects.
Despite having fewer dApps, Ethereum’s higher TVL shows it’s a preferred platform for larger financial operations. Indeed, the dApps with the highest TVL on Ethereum are largely focused on DeFi (Uniswap, Balancer, Curve, 1inch).
The top dApps on BNB Chain, aside from the center-piece of DeFi on BSC, PancakeSwap, include more gaming and non-financial dApps (Treasure Ship Game, StarryNift) — the indicator that the network is more attractive for high-frequency, low-value transactions common in gaming and other non-DeFi dApps.
Conclusion
Both BNB Smart Chain and Ethereum offer powerful platforms for developers and users. BSC excels in fast, cost-effective transactions, ideal for applications where user experience and low fees are top factors. Ethereum, on the other hand, can offer top-notch security, decentralization, and established history contributing to its popularity and growth.
No matter which network you choose to build on, GetBlock provides developers with API access to BSC and Ethereum network RPC to build and maintain high-performance decentralized applications. Start with a free plan or scale up as needed.
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