What Are the Differences Between an ERC20 and BEP20?

BEP20 and ERC20 are two of the most popular token standards in the cryptocurrency industry. Although they have similar functions, there are some key differences between them. The main difference between the two is in the technology used to create them. BEP20 tokens are built on the Binance Smart Chain, while ERC20 tokens are built on the Ethereum network.

Whether you're a crypto enthusiast or just starting out, this guide has everything you need to understand the differences between BEP20 and ERC20 tokens. These tokens follow a set of rules that make them compatible with any application running on blockchains, known as token standards.

What Exactly Is Token Standard?

A token standard is a set of rules and protocols that define how a particular type of token should be created, distributed, and used. It is an important part of the blockchain ecosystem and ensures that all tokens are compatible and can be used in different applications. It ensures that all digital token transactions are safe, reliable and compliant. It provides the basis for developing decentralized applications (dApps) on the blockchain network.

Token standards provide a framework for the design, development and deployment of token-based systems. Additionally, token standards provide users with access to a safe and secure platform for digital token transactions.

Additionally, ERC-20 tokens' gas fees for transactions can be quite expensive compared to BEP-20's lower transaction costs. We will explain the reason for the high gas price in the comparison section of this article.

What is BEP20?
BEP20 is a token standard designed for the Binance Smart Chain (BSC) blockchain. It is based on Ethereum's ERC20 standard, but has been adapted to work with the BSC network and its native token, BNB. It is designed to enable developers to create and distribute tokens on the Binance Chain, with support for smart contracts, an advanced governance system, and high yield.

BEP20 tokens are also compatible with decentralized exchanges (DEXs), so users can trade their tokens without relying on a central exchange. With BEP20, users can benefit from low transaction fees and fast transactions, making it a great option for those looking to make payments or exchange digital assets quickly and easily. They can also be used for a variety of purposes, including fundraising, loyalty programs, games and much more.

What is ERC20?
ERC20 is a technical standard that specifies certain rules and standards for issuing tokens on the Ethereum blockchain. It stands for Ethereum Request for Comments and was created to help developers create their own private tokens on the Ethereum network. ERC20 tokens are digital assets created on the Ethereum blockchain.

The standard also provides compatibility between different tokens so they can be used in a variety of applications. ERC20 also provides a wide range of benefits, such as allowing developers to easily exchange and transfer tokens and giving users assurance that their tokens are compliant with all applicable standards.

ERC20 tokens are widely used in Initial Coin Offerings (ICOs) and decentralized finance (DeFi) projects. In addition, the ERC20 standard makes it easier for developers to accurately predict how their tokens interact with each other and other Ethereum-based applications. This allows developers to use ERC20 tokens in their dApps, smart contracts, and other projects.

Comparison of BEP20 and ERC20 Tokens

This part of the article will compare BEP20 and ERC20 tokens in terms of blockchain network, transaction speed, token addresses, consensus algorithm, transaction security, gas fees, and scalability.

Blockchain Network
When it comes to blockchain, BEP20 tokens are built on the Binance Smart Chain while ERC20 tokens are built on the Ethereum blockchain.

Processing Speed
Regarding transaction speed, BEP20 transactions occur within 3 seconds while ERC20 transactions take 15 seconds. BEP20 tokens can process 1,400 transactions per second. In comparison, ERC20 tokens can process 20 transactions per second.

Token Addresses
This is the only similarity between them in this list. BEP20 and ERC20 tokens use an Ethereum-style address format starting with ' 0x. ' Additionally, both addresses are 42 characters long.

Idea Algorithm
BEP20 tokens use the Stored Proof of Authority (PoSA) mechanism on the Binance Smart Chain Protocol. ERC20 tokens, on the other hand, use the Ethereum consensus algorithm based on Proof of Stake.

Gas Fees
Since transactions with BEP20 tokens are paid using BNB, which is relatively low, BSC is better equipped for low transaction fees. This is different for transactions involving ERC20 tokens, as gas fees are paid for using ETH—the native currency of the Ethereum network. Ethereum is famous for its high gas fees.

Scalability
BEP20 has lower block times and higher production capacity unlike ERC20 tokens due to the underlying blockchain infrastructure. This allows processing a large number of transactions per second.

Transactions Security
Ethereum has an advantage. Although BEP-20 tokens have advantages such as faster transaction times and cheaper gas fees, ERC20 tokens have a more robust security model. For block validation, BSC uses only 21 selected validators as opposed to the Ethereum network's 400,000+ validators. BSC has a limited number of validators, which can lead to skepticism. BSC's PoSA block verification model has been widely criticized for its security vulnerabilities.

conclusion.

The main difference between BEP20 and ERC20 is the underlying blockchain protocol. ERC20 is based on Ethereum's blockchain while BEP20 is based on Binance Chain. As a result, ERC-20 tokens are more widely accepted due to the longer length of the blockchain and token standard. However, BEP-20 tokens have faster transaction times and lower fees, making them better suited for more time-sensitive transactions.

So which one should you choose? BEP20 or ERC20? The answer really depends on your needs. If you want your tokens to be compatible with a wide range of wallets or higher security exchanges, go with ERC20. If you want lower transaction fees and faster transactions, go with BEP-20.