This article will mainely cover BEP2 vs BEP20. Binance is one of the leading centralised exchanges. Centralised exchanges or CEXs are a type of cryptocurrency exchange. This article will introduce the Binance exchange and explain what a CEX is. But most importantly, Binance hosts its very own blockchain network.
This article will cover Binance blockchain networks and the difference between them. Yes, them. Binance hosts two different networks, each suitable in a certain area. And this article is about BEP2 vs BEP20. So, we’ll put them against each other to see what their differences are.This article will go over those two networks and the difference between them. Or to put it simply, BEP2 vs BEP20 Hence, continue reading this article to find out about this great system.
Binance, with over 9 trillion US Dollars in trading volume in 2019, is one of the biggest centralised exchanges. Binance also hosts its blockchain networks, Binance Chain (BC) and Binance Smart Chain (BSC).
This article will cover the difference between Binance Chain and Binance Smart Chain. Or BEP2 vs BEP20. But before that, let’s find out what a centralised exchange is.
What is a Centralised Exchange (CEX)?
A centralised exchange is a crypto exchange platform. The most important difference between CEX and DEX (Decentralised Exchange) is centralization. It means that organisations or people control CEXs. Therefore they cannot be as secure and private as DEXs.
BEP2 vs BEP20: What are their differences?
BEP2 vs BEP20, what are their use cases? This section will give a summary of that.
Binance owns its own blockchain networks. Users use each for different purposes. Therefore they have different functionality. Binance Smart Chain or BSC has the abilities of a smart contract that enables the DApps ecosystem. BSC has its native token called BEP20. To pay for the gas fees of transactions on this network you must have BEP20 BNB tokens on your crypto wallet.
To put BEP2 vs BEP20 you must understand each one. The Binance Chain or BC on the other hand has a different use case. BC or the Binance Chain is best suited for sending tokens and transactions. Binance Chain makes sure that all transactions on the CEX run perfectly and smoothly. Binance Chain has its own native token called BEP2. To perform transactions on this network you must also have some BNB tokens. Therefore, BEP20 and BEP2 have this in common. They both need BNB tokens to pay for transaction gas fees.
Now, let’s dive into BEP2 vs BEP20 more deeply in the next section.
What is Binance Chain (BEP2)?
Now we should dive deeper to rightfully put BEP2 vs BEP20. Binance launched the Binance Chain blockchain network in 2019. Binance Chain uses a Proof Of work consensus algorithm (PoW) like Bitcoin and Ethereum. Binance Chain is in charge of making sure the transactions on the platform run smoothly. That’s right, the Binance Chain is perfect for handling a large number of transactions. And also, to perform fast reliable transactions of assets.
Binance integrated The functionalities of the Binance Chain within the Binance ecosystem. Binance Chain blockchain also enables Binance Decentralised Exchange (DEX). As it specialises in making fast and smooth transactions, securely. One of the most important parts of running a DEX is making sure the transactions are done fast and securely.
BEP2 is the native standard token format for the Binance Chain blockchain network. The standard token format (BEP2) was made to work perfectly on Binance CEX, as well as the Binance DEX. However, the functionalities of BEP2 end right here. Because it was made to only be used on Binance platforms. Therefore it can’t be used on any other blockchain.
Now, read the next section as well. By understanding each one we get closer to the answer of BEP2 vs BEP20.
What is Binance Smart Chain (BEP20)?
Binance launched the Binance Smart Chain (BSC) in late 2020. Binance created the Binance Smart Chain because the crypto world was needing it. Binance launched Binance Smart Chain in response to the attention ERC20 was gaining. ERC20, One of Ethereum’s networks, is one of the leading blockchain networks. Binance launched Binance Smart Chain to have a blockchain network that can compete with it. Binance made BEP20 to compete with Ethereum and its DeFi ecosystem.
Binance Smart Chain’s main purpose is very different from Binance Chain’s. BSC was made to be a blockchain that’s home to DApps (decentralized applications), like ERC20. Therefore it’s perfect to host and run DApps on. Aside from that, the crypto market was also moving towards new sectors such as DApps, DeFi, NFT, and crypto games. These pushed Binance to create the Binance Smart Chain (BSC).
BEP20 is the token standard format for the Binance Smart Chain (BSC). BEP20 tokens are also compatible with the ERC20 network and Ethereum Virtual Machine (EVM). Binance also designed BEP20 for interoperability. Therefore it follows the ERC20 token standard format. That’s why its tokens are compatible with ERC-20 tokens. BEP20 tokens can be converted to BEP2 tokens and used on that network as well. Or to be converted to ERC-20 compatible tokens through a bridge and be used on other networks.
Done. So, this was BEP2 vs BEP20. We have gathered and put together needed information to come up with an answer. An answer to BEP2 vs BEP20. This article will give you useful information about both of these networks and the Binance exchange itself.
Should I use ERC20 or BEP20?
Transactions take much more time to be verified on the ERC20 network. Therefore the transactions seem to be more secure than on BEP20. Hence, it really depends on how you’re going to use the networks. Then choose the network that suits your use case better.
Is Smart Chain BNB BEP20?
Binance Smart Chain or BSC is a blockchain network on Binance. Tokens such as BNB come in BEP20 and BEP2 forms. To use this network be sure to have some BEP20 BNB tokens to pay for the gas fees.
Are BEP2 and BEP20 compatible?
Yes, these 2 networks are completely compatible. BEP2 and BEP20 are Binance’s blockchain networks. Binance Chain (BC) uses BEP2 token standards. While Binance Smart Chain (BSC) uses BEP20 token standards. To make transactions on both of these networks you need to have some BNB tokens.