In recent decades, the world of cryptocurrencies has rapidly expanded, introducing new digital currencies each day. This diversity in digital currencies has led to the creation of various networks, each offering unique features and capabilities to users.
But how can we distinguish between these different networks and understand which one is best suited for our needs? How can we comprehend their differences?
If you have worked with digital currencies, you’ve undoubtedly faced the challenge of choosing the right network for each transaction coin or token transfer within the blockchain. However, this decision can be a significant challenge for novice users; they may not know which network to choose to securely and confidently transfer their cryptocurrencies.
Join us in this article to explore the differences between BEP2, BEP20, ERC20,and TRC20 digital currency networks. With an understanding of these differences, you’ll be able to make the best choices when using digital currencies to meet your needs and make informed decisions in the world of cryptocurrencies.
The Reason for the Diversity of Digital Currency Networks
Currently, different digital currency transfer networks with diverse applications exist, offering users the option to choose from various options. These diverse types have emerged for various reasons, each of which reflects different needs and expectations in the world of cryptocurrencies.
You might say that if there were only one unified network for digital currencies, the process of transferring and exchanging cryptocurrencies would be simpler. However, the reality is that each blockchain network has its unique rules and protocols, and theand the tokens that run on them have different standards from other networks. Thus, the diversity of digital currency networks allows individuals to choose a network that best caters to their needs.
The first and most important reason for the existence of this diversity lies in the desires and needs of users and developers in the world of cryptocurrencies. Some individuals, if they intend to pursue simpler tasks such as currency transfers, seek straightforward and low-cost networks. Meanwhile, others are looking for more advanced features and services, such as smart contracts. Due to this diversity, each individual can choose a network that best satisfies their needs.
Technology and security are also significant reasons for this diversity. Each digital currency network has its unique technology and protocols that differ in security, transaction speed, transaction cost, and other features. Some networks prioritize security and resistance to distributed denial-of-service attacks (DDoS attacks), while others focus on transaction speed and efficiency.
Moreover, development, improvement, and competition in the cryptocurrency market are vital factors in this diversity. With the growth and advancement of blockchain technology, companies and developers are striving to attract new users by providing better services and innovative ideas. These improvements may include adding new features, enhancing security, or improving network performance.
BEP-2 Network
The BEP-2 standard, officially known as “Binance Chain Evolution Proposal 2,” is used for the development and evolution of the Binance network. In essence, BEP-2 is a technical standard utilized for creating and using tokens traded within the Binance Chain.
Binance Chain is a blockchain network developed by the Binance platform and its community. This network is exclusively geared towards Binance’s exchange activities.
Each blockchain network has its specific rules and regulations that must be followed to in the creation and usage of tokens. BEP-2 signifies that tokens created with this standard follow to all the laws and technical specifications required by the Binance Chain network.
An interesting aspect of Binance Coin (BNB) and the BEP-2 standard is that initially, BNB was an ERC-20 standard coin residing on the Ethereum network. With the launch of Binance Chain, BNB transitioned from being a native digital currency of the Binance network to a token following the BEP-2 standard. In other words, the primary aim of establishing Binance Chain was to create a native ecosystem for the Binance exchange and provide a local token for this network.
In general, BEP-2 provides information about the token within the Binance network:
- Cryptocurrency Information: This standard specifies information related to cryptocurrencies existing within the Binance Chain network. This information can include details such as the cryptocurrency’s name, quantity in circulation, and other associated features.
- Token Operation: The BEP-2 standard provides explanations about how tokens functioning within the Binance Chain are managed. This information can include details such as how BNB is sent and received, the token burning process, generating new tokens, and other token-related operations.
BEP-20 Network
The BEP-20 standard, or in other words, “Binance Smart Chain Evolution Proposal 20,” is a crucial standard in the world of cryptocurrencies. It is designed for the evolution of the Binance Smart Chain (BSC) network and is utilized for designing and writing smart contracts on the BSC network. This standard is created to enhance compatibility with the Ethereum network. In simple terms, it is a technical specification for creating tokens on the Binance Smart Chain network.
Smart contracts play a significant role here. These contracts are Solidity-based codes that specify what should be executed on the blockchain network and how it should operate. These standards and conditions hold exceptional importance in smart contract development. Only when these conditions are met, smart contracts can execute on the blockchain network.
Binance Smart Chain, or BSC, has been introduced as an effective alternative to the Ethereum blockchain. This platform enables the execution of smart contracts and the development of decentralized software. One of the prominent features of BSC is its ability to execute smart contracts on the network without increasing congestion.
This means users and developers can run their smart contracts and continue their project development without worrying about transaction delays and high costs. This feature has made BSC an attractive option for decentralized finance (DeFi) projects.
However, in recent years, Ethereum has faced challenges due to increased congestion and high transaction fees. These issues have led developers and users to search for more suitable alternatives, making BSC a stable and efficient choice in the world of cryptocurrencies.
Transaction speeds on Binance Smart Chain are twice as fast as Ethereum. If you desire more users for your decentralized applications, you should consider operating on Binance Smart Chain now.
Changpeng Zhao
One of the main strengths of the BEP-20 standard is the high transaction speed on the BSC network. This network utilizes the Proof of Stake (PoS) consensus algorithm, allowing almost every block to be created in about 5 seconds. In other words, transactions on BSC are much faster than Ethereum’s blockchain (which takes approximately 13 seconds to create each block).
Another outstanding feature of this standard is the low transaction fees. Due to scalability issues and rising costs on the Ethereum network, using BEP-20 allows users to conduct transactions with lower fees. Additionally, there is interoperability between BEP-20 and BEP-2.
BSC and Binance Chain operate in parallel, enabling users and developers to transfer their assets seamlessly from one network to another. This feature also provides an incentive for developers to leverage these capabilities and innovate.
ERC-20 Network
The ERC-20 network is one of the leading digital currency platforms in the blockchain world. Standing for “Ethereum Request for Comment,” this standard signifies the formal protocol for improving the Ethereum blockchain. The ERC-20 standard not only defines how tokens are sent and received but also regulates the total token supply, updates, and all financial matters related to tokens created on this network.
A prominent feature of this network is the creation of facilitative rules for token developers. Because of this feature, the ERC-20 network has become one of the most popular platforms for creating and developing tokens. It is recognized as the first platform covering smart contracts, with over tens of thousands of ERC-20 tokens created on it to date.
The number 20 indicates a specific identifier for the ERC-20 protocol. This protocol has played a fundamental role in the blockchain and digital currency industry in recent years, aiding in the development of thousands of decentralized applications (DApps) on a standardized platform.
The ERC-20 standard was developed by a developer named Fabian Vogelsteller in 2015 as a method to standardize tokens existing in smart contracts on the Ethereum blockchain platform. Vogelsteller registered this proposal as an ERC standard through his project’s GitHub page.
As it was the 20th Ethereum improvement proposal, it was registered as ERC-20. Following the Ethereum developer community’s process, this proposal was approved in 2017 and implemented as the Ethereum Improvement Proposal, known as ERC-20.
Creating and developing a token following the ERC-20 standard is beneficial for several reasons. Other developers do not have to start their activities from scratch every time they develop a new token or decentralized application.
Since the ERC-20 standard has become a popular standard, it creates a significant Network Effect. Developers and users can be confident that any token created using the ERC-20 standard can interact with hundreds of other tokens compliant with ERC-20 and the services accepting these tokens.
In the ERC-20 standard, the receiver is not informed about the received token, which can lead to users losing their assets. For example, if you send your tokens to a smart contract address of another ERC-20 token, your tokens will be stuck in that address; whereas such transactions should be returned.
Millions of dollars have been lost due to this issue. To solve this problem, the Ethereum community has introduced a new standard called ERC-223. This standard does not allow tokens to be sent to an address that does not support the received token.
TRC-20 Network
TRC-20 is another cryptocurrency network, which operates on the Tron blockchain. This network allows users to send, receive, and manage their tokens on the Tron blockchain platform. In essence, TRC-20 is a specific standard for Tron tokens, allowing these tokens to be sent and received based on specific rules and regulations.
TRC-20 has a direct connection with Tron digital currency (TRX). This means that to send or receive TRC-20 tokens, users must possess a specific amount of TRX in their wallet. This connection not only increases transaction security but also serves as a complement to the Tron digital currency.
In other words, if someone wishes to send or receive TRC-20 tokens, they must first have a specific amount of TRX in their wallet. This feature provides users with Trust and assurance that every transaction is backed by a specific amount of TRX, ensuring secure transactions.
The TRC-20 standard is fully compatible with ERC-20 tokens on the Ethereum network. This means that TRC-20 tokens can be seamlessly used within the Ethereum token ecosystem. This capability allows developers to easily create tokens using this standard and use them in their DApps and projects.
Difference Between BEP-2 and BEP-20 Networks
BEP-20 and BEP-2 networks appear highly similar. Both networks are developed by Binance, recognized as the world’s largest and most renowned cryptocurrency exchange. However, the real distinction between these two lies in their address structures.
In the BEP-2 network, known as Binance Chain, addresses begin with the letters “bnb” and transactions require filling in a Memo tag. This address structure indicates that transactions on this network are directly sent to addresses associated with user accounts on Binance Exchange.
On the other hand, in the BEP-20 network, known as Binance Smart Chain, token addresses start with “0x,” resembling the address structure of Ethereum tokens. This addressing format allows developers to create and trade their tokens on both BEP-2 and BEP-20 networks.
Although both networks facilitate cryptocurrency exchanges easily and support almost all available coins and tokens, using platforms other than Binance for transactions might require utilizing different digital currency networks.
Another difference is that,Binance Smart Chain(BSC) supports smart contracts and is fully compatible with Ethereum Virtual Machine (EVM). While most Binance network developers focus on creating a fast and scalable network for transactions within Binance Exchange.
BSC is used for decentralized applications (DApps) such as decentralized Binance Exchange. BEP-2 is the standard for token creation in Binance Chain, while BEP-20 is the standard for token creation in Binance Smart Chain.
A Comparison Between ERC-20 and BEP-20 Standards
These two standards closely resemble each other. Binance not only holds no Problem against ERC-20 but also strives to enhance collaboration between Ethereum and Binance Smart Chain networks.
The Binance Bridge project was created with the aim of expanding this collaboration. As mentioned, BSC is fully compatible with Ethereum Virtual Machine, thus compatible with Ethereum-based tools and decentralized applications.
Developers need only port their Ethereum-based projects to run on the Binance Smart Chain. This means implementing a software module such as an application or user interface in a way that developers and users can easily use it in the new environment. This process allows projects like Metamask wallet to operate seamlessly on Binance Smart Chain.
Difference Between ERC-20 and TRC-20 Networks
ERC-20 is the standard for financial transactions on the Ethereum blockchain, while TRC-20 is the standard for financial transactions on the Tron blockchain. Transaction fees on the TRC-20 network are lower than on the ERC-20 network.
Tron token addresses start with the letter “T,” while Ethereum token addresses start with “0X.” Due to these differences, users prefer to use the Tron network for transferring stablecoins like Tether (USDT), which can be transferred on both Tron and Ethereum networks, to pay lower fees.
Sample Addresses of Blockchain Standards
- BEP-20: Tokens on the Binance Smart Chain start as follows:
‘0xe62e360822220bB6418f111ba90543d43A555666′
- BEP-2: Tokens on the Binance Chain start as follows:
‘bnb256ns6lf84zs5aaan85vdth4ad8885m4gt67f23′
- ERC-20: Tokens on the Ethereum blockchain start as follows:
‘0x0e806cea8e5be111df97354ef7f22b66c5a22222′
- TRC-20: A token standard on the Tron network with addresses starting as follows:
‘TWsVAb9111gKdaaaD7XoEd2227AoyvkgN7′
Additionally, BEP-2 addresses require the use of a Memo, which is not needed for withdrawals and deposits on ERC-20, and TRC-20 digital currency networks.
Explorers for Digital Currency Networks
- Ethereum Network Explorer (ERC-20): etherscan.io
- Binance Smart Chain Explorer (BEP-20): bscscan.com
- Binance Chain Explorer (BEP-2): explorer.binance.org
- Tron Network Explorer (TRX): tronscan.org