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Binance Chooses NEO’s Delegated Byzantine Fault Tolerance for its BNB Chain

Binance Chooses NEO’s Delegated Byzantine Fault Tolerance for its BNB Chain

Binance, the world’s largest cryptocurrency exchange by market cap, will utilize the sophisticated Delegated Byzantine Fault Tolerance (dBFT) for its upcoming Binance Chain product, as seen on a Youtube video released on December 4, 2018.

Building a Robust Product

First revealed in a tweet last week, Binance Chain is a native blockchain that strives to offer a highly-scalable distributed ledger that can be used to build products and issue digital tokens.

Binance announced the product at a Forbes Asia event held in the first week of December. CEO Changpeng Zhao, popularly known by his initials CZ, spoke at the “Decrypting Blockchain for Business” seminar while unveiling the offering.

Now, the company has confirmed that Binance Chain will utilize a dBFT-based consensus mechanism, with the company’s upcoming decentralized exchange (DEX) being the first to deploy the sophisticated system.

Perhaps the most popular project deploying such a mechanism is NEO, the world’s 18th largest cryptocurrency by market cap.

Delegated Byzantine Fault Tolerance Explained

For the uninitiated, a dBFT framework is an iteration of the popularly used proof-of-stake mechanism used by cryptocurrencies such as EOS and Peercoin.

Unfortunately, the latter blockchains require wallets to be connected to the internet at all times, making them a ripe target for hackers. Besides, achieving true consensus in a decentralized system on the basis of wealth distribution and delegation is a complicated task, and—as observed in the controversies surrounding EOS—could result in an unfair network.

The problem is amplified when several parties are involved in a network crash. Without singular consensus, it’s difficult to determine which parties’ components failed and caused the issue.

The term “Byzantine Fault” is derived from a famous Game theory fallacy called “Byzantine Generals Problem,” where all actors must agree on a concerted strategy to avoid a catastrophic system failure, but some of the system’s participants are unreliable; signaling that it is functioning properly, when in fact it is faulty.

However, a dBFT system takes into consideration this fallacy and ascertains that as long as two-thirds of the network’s participants remain truthful, the one-third of ‘bad actors’ are eliminated from affecting the network’s final decision.

Binance Selects dBTF Consensus

Currently, it is unclear why Binance chose a dBFT-based consensus mechanism, but if the exchange’s impressive plans of reaching global expansion are considered, the operation of a worldwide public blockchain would require a high tolerance to bad actors who try to maliciously affect the network.

Meanwhile, CZ added at the event that Binance is striving hard to reach a fundamental “payment adoption increase,” and “pushing really hard into that space” as the company pushes for its vision of digital asset decentralization. How this will play into the success of Binance or NEO is hard to determine.

Filed Under: Altcoins, Binance, Crypto Exchanges, NEO, Technology
Shaurya Malwa

Post-mining his first bitcoins in 2012, there was no looking back for Shaurya Malwa. After graduating in business from the University of Wolverhampton, Shaurya ventured straight into the world of cryptocurrency and blockchain. Using a hard-hitting approach to article writing and crypto-trading, he finds his true self in the world of decentralized ideologies. When not writing, Shaurya builds his culinary skills and trades the big three cryptocurrencies.

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