The Binance Smart Chain whitepaper has come under criticism from crypto purists who claim it to be centralized. Many crypto analysts are up in arms ever since the whitepaper was published on 17th April. The smart-contract enabled solution, Binance Smart Chain, is widely believed to be a successor of the first-gen ‘Chain. The new solution features … Read more
The Binance Smart Chain whitepaper has come under criticism from crypto purists who claim it to be centralized. Many crypto analysts are up in arms ever since the whitepaper was published on 17th April. The smart-contract enabled solution, Binance Smart Chain, is widely believed to be a successor of the first-gen ‘Chain.
The new solution features a delegated proof-of-stake and extensive Ethereum capability. Most importantly, it boasts of a governance mechanism consisting of 21 node operators chosen by Binance Coin holders.
Binance Smart Chain facing opposition from crypto fans
Binance products always get a lot of attention from crypto industry participants. However, Binance Smart Chain has generated only lukewarm reception. So, what does it mean? The whitepaper wasn’t well-received by hardcore crypto fans who accused the global exchange of centralizing the chain.
The standard response has been that the chain does not offer anything new to the users. It just remixes old elements and presents the same features in a new package. The crypto ecosystem was expecting something radical – and they were disappointed.
“Binance Smart Chain” looks like another ETH competitor in an already crowded field
+ features EOS-like DPoS with 21 nodes voted on by $BNB holders
+ white paper details full compatibility with Ethereumhttps://t.co/NvcFnoFBge
— Messari (@MessariCrypto) April 19, 2020
Messari, the famed crypto data aggregator, said that Binance Smart Chain is competing in a crowded realm with feature-set similar to the EOS’s DPoS mechanism. Some have outright labeled it as a Chinese copy cat.
DPoS governance is susceptible to centralization
Tom Shaughnessy of Delphi Digital says that the Binance Smart Chain is vulnerable to centralization. He adds that the product competes with likes of Ethereum blockchain but lacks the decentralized features that users love. Furthermore, the new chain gives Changpeng Zhao, CEO of Binance, unbridled control over the chain.
Anything resembling centralization is frowned upon in the crypto realm. Here, the idea is to offer much more than low-cost transactions. Users can easily access low-cost transactions using other services like Amazon Web Services. What users love in decentralized networks is the ability to work together in a like-minded community without any centralized oversight or controlled mandate.
Centralization stifles creativity, whereas decentralized chains promote innovation through freedom. Coercing developers to work inside a centralized sandbox can prove counterproductive. The fate of Binance Smart Chain, thus, hangs on how the management convinces the community about its decentralized features.