How Binance Smart Chain (BSC) will revolutionize P2P trading
Binance Smart Chain for faster transactions
Since the bull run in 2017, the crypto community has become fully aware of the dark side of blockchain. The fact that transactions can be slow, expensive and therefore not suited for small amounts (up to $500).
Note: Transaction costs on blockchains are not related at all to the amount you send. Sending 100 BTC is not more expensive than sending 0.000001 BTC
The price and wait time for transactions are heavily correlated to the amount of people trying to send transactions at certain given time. If a blockchain can handle ~7 transactions per second but 8 are sent, it is clear that there is a backlog of transactions growing. As the backlog (or mempool) is growing, people who send a new transaction are often increasing the price, to skip the line so to say. This has a network affect, resulting in a sudden and extreme surge of transaction cost.
Peer-2-Peer (P2P) trading has been hit very hard by high network fees. For each trade, the user must deposit crypto into escrow. This transaction is paid by the Seller and forces sellers to increase the price of their offerings, without directly benefitting from it (miners are). On the other hand, the user who just bought the crypto, will likely want to withdraw it to another exchange or private wallet, then again paying a high fee to do so. This easily results in 2 transactions costing in total over $20 for a transfer of Bitcoin that could be somewhere around $100. That makes it 20%. While some users are insensitive and don’t care or even realize it, the average sophisticated trader will soon realize, that there is no business to be made in such environment.
This situation resulted in users either sending bigger amounts to P2P platforms, which is not a solution but a workaround or not accepting any more trades for lower amounts.
Binance Smart Chain, the solution
With the rollout of Binance Smart Chain BSC (not to be confused with Binance chain), Binance has launched a 100% Ethereum compatible and independent blockchain that is faster in terms of block time (confirmation as fast as 2s) and also less congested, despite the already heavy use as it has more capacity than the current Ethereum blockchain.
What makes the Binance Smart Chain especially attractive is the fact that you cannot just trade BNB there, but all major currencies and coins as Binance has issued so called “wrapped coins” that represent real coins on other blockchains. This means one can buy 1 Bitcoin and transfer it on the Binance Smart Chain, well knowing that this 1 Bitcoin (ticker is BTCB) is 100% backed by a real Bitcoin on the bitcoin blockchain. Additionally, Binance as well as Vertex do not treat those Bitcoins different. It is possible to deposit 1 BTCB and then 1 minute later withdraw a BTC, without any conversion.
What Binance Smart Chain really does is offer a faster, cheaper solution to send around wealth (crypto) without any complicated setup. Everyone with a Binance account has a Binance Smart Chain wallet by default, then TrustWallet and Metamask also support Binance Smart chain, probably altogether covering 85% of the crypto community.
Bitcoin BTCB? What is BTCB?
As explained above, Binance has the most important coins issued on their blockchain. Those coins have the identical price to the original coin, hence 1 BTCB = 1 BTC in value. The only difference is that BTCB is a wrapper coin of BTC, meaning for each 1 BTCB issued, Binance stores 1 BTC in their secured wallet to ensure you can always swap it back.
The proof of those funds is publicly available under https://www.binance.org/en/assets-proof
Vertex Market & Binance Smart Chain
For our users, this will be a huge improvement for their trading businesses as they will no longer be forced to use the native blockchain with its high transaction cost.
It works also very simple. If you want to deposit bitcoin, you can in your wallet. Choose either to do it via bitcoin blockchain or Binance smart chain (BSC). If you chose BSC, you are prompted your BSC deposit address and are asked to send BTCB there. To do that, you can for example go to your Binance account and on the withdraw screen, select “Binance Smart Chain BEP20” for your bitcoin withdrawal. Once the BTCB is on your vertex wallet (usually between 5 and 20 seconds), you see the Bitcoin balance in your account. As you can see, we credit you as if you would have sent normal Bitcoin.
If you want to withdraw, you can chose on Vertex which blockchain you want to use and if you chose BSC, you can enter a BSC valid address (like the one from your Binance account) and you will get your funds via Binance Smart Chain transaction.
In combination with our non deposit offering functionality, where a user DOES NOT REQUIRE funds on his wallet to show an advertisement, it is revolutionizing P2P trading as one can wait for a trade and almost instant deposit into escrow.
From Vertex:
We always incentivize users to not hold many coins on exchanges. It is simply not the right thing to do, as you want to be in charge of your money which you only are, if you hold coins in your own wallet. Binance Smart Chain makes the cost to do that much lower, showing how serious we are about protecting our users and giving them the right tools they need to be safe!
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