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Binance chooses NEO’s delegated Byzantine fault tolerance for its BNB chain

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

Building a robust product

Binance Chain was first revealed in a tweet last week.

#Binance is pushing for blockchain adoption and doing many things to move the industry forward. For example, in the coming months we will have the Binance chain ready, on which millions of projects can easily issue tokens. @cz_binance @ForbesAsia #ForbesBlockchain pic.twitter.com/0pc0r1lXd2

– Binance (@binance) December 4, 2018

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

Now the company has confirmed that Binance Chain will use 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 that employs such a mechanism is NEO, the world’s 18th largest cryptocurrency by market capitalization.

Byzantine delegated fault tolerance declared

For the uninitiated, a dBFT framework is an iteration of the popularly used proof-of-stake mechanism used by cryptocurrencies like 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. Also, building real consensus in a decentralized system based on asset allocation and delegation is a complicated task and, as observed in the EOS controversies, it can lead to an unfair network.

The problem is compounded when multiple parties are involved in a network crash. Without a unified consensus, it is difficult to determine which components of the parties failed and caused the problem.

The term “Byzantine Fault” is derived from a famous fallacy in game theory called “Byzantine Generals Problem”, in which all actors must agree on a concerted strategy in order to avoid a catastrophic system failure, but some of the system participants are unreliable; signals that it is working properly even though it is actually defective.

However, a dBFT system takes this fallacy into account and states that as long as two-thirds of the network’s participants are telling the truth, one-third of the “bad actors” will be excluded from the network’s final decision.

Binance chooses dBTF consensus

It is currently unclear why Binance opted for a dBFT-based consensus mechanism, but given the exchange’s impressive plans for global expansion, running a global public blockchain would require a high tolerance for bad actors trying to hijack the network maliciously influencing.

After countless hours of development and research, #binance, the world’s largest exchange, decided to use the delegated Byzantine Fault Tolerance (dBFT) consensus algorithm for their new $ BNB chain. This is the same consensus algorithm that $ NEO developed. Great reassurance for NEO pic.twitter.com/FcNjd7hYK2

– xenzor (@ xenzor1) December 8, 2018

Meanwhile, at the event, CZ added that Binance is keen to achieve a fundamental “payment adoption boost” and “get really hard into that area” as the company pushes on its vision of decentralizing digital assets. How this will contribute to the success of Binance or NEO is difficult to determine.

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