Messari analysts say the BSC is a copy of Ethereum with centralized validators.
Messari, one of the largest research companies in the cryptocurrency industry, criticized the recent rise in Binance’s currency, BNB. The blockchain platform of the largest brokerage firm in the world, Binance Smart Chain (BSC), is one of the big reasons behind Binance Coin’s rise.
Binance’s network competes with Ethereum, which due to high fees and network congestion, has lost many users to Binance Smart Chain. The growth of the chain, therefore, is reflected in the price of BNB.
Last week Binance’s network surpassed Ethereum in a number of daily transactions by 200%, each transaction on the network is paid with BNB fees, consequently, the asset skyrocketed by more than 30% and was even traded for US$615, a record price.
Despite the increase, Binance’s network is generating concerns of extreme centralization.
Binance Smart Chain is centralized, says Messari
According to a report by Messari analyst, Binance Smart Chain may not be as decentralized as previously thought.
The company’s researcher, Wilson Withiam, said in a tweet that “it is difficult not to assume that Binance Chain validators are not in any way linked to Binance.”
Binance’s blockchain network uses a Deployment Proof (PoSA) consensus mechanism. Thus, it selects 21 validators daily. Binance Chain, a network governed by 11 validators, makes this selection. Binance Smart Chain validators need to own at least 10,000 BNB, about US$5.81 million at the current price.
In exchange for this amount, validators are rewarded with BNB tokens each time they are chosen to confirm transactions.
In theory, anyone who has US$5.81 million in their pocket can become a validator of the network. However, Messari researchers believe that the network’s validators may be connected with Binance itself.
“They take turns producing blocks in an apparently predefined order. There doesn’t seem to be any mechanism to determine who will produce the next block ”Wilson Withiam said.
Binance Smart Chain is a copy of Ethereum with centralized validators
He went on to suggest that centralizing the network could be a problem at some point, as it goes against the principles of cryptocurrencies.
After praising BSC’s speed and rates, he asked his users to research the subject to better understand how centralization can harm a blockchain.
“For those who use the BSC, take the time to understand the topology of the network. Of course, rates and speed (both user experience factors) are undoubtedly positive. But strong resistance to censorship and fault tolerance is not part of the package. ”
Ryan Watkins, another Messari analyst, also commented on the matter, saying that people are deceived by centralized solutions that are not blockchain.
“At each cycle, people are deceived by the latest centralized solution to all blockchain problems.”
“The action of the price will make people believe in anything. I don’t care how high BNB or CAKE go, it won’t change that they are still imitators, ”he said, referring to Ethereum as the original network. “It is one thing to see these assets as a way to make money, another thing to see them as innovations that drive this sector”.
“The reason why BSC is faster and more scalable is not because of some magical technological innovation. No, it is the magic of centralization. BSC is a copy of Ethereum with a set of centralized validators. That’s it. Nothing else.”
At the same time, the co-founder of digital asset research firm Delphi Digital, Tom Shaughnessy, argued that Binance Smart Chain will be hampered by centralization.
Shaughnessy said that network governance allows the founder of Binance to have control over the blockchain, given his influence on Binance.
“Copying is a feature, not a bug.”
Not everyone agrees with the analysts’ opinions. In response to criticism on Twitter, a user said: “when it comes to invention and innovation, copying is a resource”
“Copying is a sign that something is worth exploring, but a difference of character is enough to be better,” he said.
Others said that while Binance’s operating model may raise concerns about centralization, Ethereum’s slow updates are leaving its millions of users undermined by high rates.
“Ethereum needs to hurry up and solve its problems. These fees are taking a lot out of people’s pockets. At some point, people care more about money, ”he said.