Bitcoin Forum

Sorry if this sounds like I am late, I am just knowing that Bitcoin is available on Binance chain, how many of you know this? A crypto newbie that I introduced to Bitcoin came to me some hours ago saying he found a way to escape the Bitcoin high transaction fee.

https://i.postimg.cc/L6J1P2fK/Screenshot-20231207-075656-Trebuchet.png

I thought he was talking about the Ligthening Network because that was the only solution I told him is available, he choose to use Binanace chain and after looking into it I am surprised that the Volume is very high and top exchanges supports BTC on Binance chain as well.

I am not saying it's good or bad because I don't know but I am shocked that I never knew this existed before, now I keep wondering about how many things I don't even know is happening in crypto, are you guys familiar with this? Anyone using BNB chain to store Bitcoin to avoid high transaction fee?

It is an altcoin that is pegged to bitcoin price. The risk is that if something happen to the altcoin, it can be depegged. The real bitcoin are the ones on the bitcoin blockchain and lightning network.

The common thing I Know of is the use of the BNB smart chain network by exchanging your bitcoin to it, but using the BNB network to store for your bitcoin is something i have also not tried before, but one thing assured me of using BNB smart chain network, it's the cheapest of all if am not mistaken, so many people will prefer the use of BSC network instead of other networks just to have a lower transaction fee rate.

Its nature is just an altcoin and not bitcoin, on any chain to encourage users to use it at low cost is just a way to deceive them.

And it's not the original Bitcoin, I don't really care about having to pay a transaction fee if i use bitcoin, or if it's simpler, people like and don't like to spend fees, so why keep looking for ibitcoin? :) , my personal opinion is that we accept bitcoin, not that bitcoin accepts us.

I remember suggesting this to a user that came to the forum seeking for how they could get their coin out of an exchange but don’t want to use bitcoin cause of the fee hike… but the issue now is that when you choose this as an option you’ll no longer be dealing with bitcoin, you’ll now have an altcoin in your possession and just like the post above mine stated there’s a possibility of it being depegged and if that should happen there’s no telling if the price will return back to normal or just keep falling.

If you’re ready to accept the risks involved then it would be a great way to avoid the transaction fee hike.

That's not a real Bitcoin, it's a token that pegged with Bitcoin price, owning that will make you able to get hacked just like this case Binance Smart Chain Token Bridge Hack (https://swarm.ptsecurity.com/binance-smart-chain-token-bridge-hack/) and your token could be freeze by them since BSC is centralized.

Is this good to avoid high transaction fee? not really because there are better coins that open source and not centralized e.g. Doge and Litecoin.

I know this option and holding Bitcoin in other chains is possible, but I wouldn't recommend it. The Bitcoin held in other chains is not the real Bitcoin. It's just pegged to Bitcoin. I'm uncomfortable keeping my Bitcoin in other chains because there is a risk of it being depegged if there are any issues with the main coin of that chain. Most people withdraw their Bitcoin from exchanges like Binance because they don't trust them. Holding your Bitcoin in other chains to save on withdrawal fees is not a wise decision. I would rather pay a high withdrawal fee than risk holding my Bitcoin in other chains.

Why not change the platform? There are other options where the commission is much lower. I often use the site where the constant Upcoming Airdrops (https://cryptoset.gg/) . So far it has not let me down and the commissions there are not large. Although to be honest, I am buying up a small portfolio and therefore the commissions, so I can't say what commission is after 1000$

There’s Wrapped Bitcoin in almost all blockchain not only to Binance Smart Chain. Binance only list the BSC pegged token to support their own chain but you can see a lot of wrapped Bitcoin everywhere since blockchain bridge makes the interoperability of tokens possible to every chain.

As explained above, the chance of depegging is the biggest risk you can get on this kind of token especially if you are a long term holder.

You can use as an example BUSD that is now already being delisted and cease to exist early next year since Binance have problem to their issuer. This can happened to any token that value relies on pegging value stored on smart contracts.

What you are referring to is WBTC (Wrapped Bitcoin) which is an altcoin and not Bitcoin. It is available on not just Binance Smart chain but also Ethereum and Tron blockchain. It is on the Binance Smart Chain a BEP20 token, on the Ethereum blockchain and ERC20 token, and Tron, it is a TRC20 token. You will get high volume as the fee is very low and Binance does promote its blockchain on its exchange. This is justified as both the exchange and blockchain are owned by Binance and being centralized it will first promote itself than the real Bitcoin.

You do not get a Bitcoin, but a WBTC token. It is true that its value is currently 1 Bitcoin, but there is nothing that guarantees that value, and it may be less than 1 Bitcoin, so instead of paying $20 to $50 in fees, you may lose everything you own.
WBTC is useful for small payments around $500 and is not a long-term investment.

Bitcoins from any network other than the Bitcoin network are not original Bitcoins, they carry a lot of risk, so if you intend to hold Bitcoins, you should not choose other chains. Because they can be scams, they have no guarantees like original bitcoins, and they have no potential like original bitcoins. So you should never risk holding just to avoid some transcation fee. You should always use original bitcoins and hold them

As expected, my reply to him is that anything can happen to binance chain, hacks is more possible on alts and it's near impossible on Bitcoin network, but the desperation of avoiding high transaction fee is why people like him are looking for cheap way.

I still strongly stand with my own solution to this problem using Lightening Network rather than other, I don't expect anyone to use the binance chain BTC that's why I bring this question to the forum, I am strongly against it myself, but since he is into this I am trying to figure out if there are other people like him on this forum.

If anyone is, just know that BTC on binance chain is not decentralized, this is a centralized network and anything can happen, you are at your own risk.

"Bitcoins" in Binance chain hold the same water as "IOU bitcoins" in a bank's spreadsheet. There is peg as long as the bank doesn't go bankrupt. Which reminds me of why we have Bitcoin in the first place.

Look. If he's into cryptocurrencies just to make profit using Binance, then buying and selling real bitcoin and being required to pay high fees etc., is reasonably an inferior solution comparably to just buying and selling IOUs.

Let's take the hack risk aside. We are talking about some tokens that are under a different blockchain, which is not bitcoin, but pegged coins, be it bitcoin or fiat surfers of the same faith. We can't confirm if there is actually any real bitcoin backing those shitcoins anywhere as there is no transparent report that they give about their reserves with respect to their pegged coins.
 
Another risk you are to think about aside from the hack is this: what if something happens to Binance as a whole? Do you think it's a native token or any coin that is being minted by them? Everything will crash, even if it recovers. It will take a lot of time. And again, when you swap over to the altcoin that they claim to be bitcoin, you are also not in control of the coin that you are holding as they are centralised and can be frozen in your wallet anytime, even if you move them out of the centralised exchange.
 
So when thinking about the possible ways to go about low fees, we should also consider the privacy and security measures that come with them. So we should always give those who seek alternatives what it will cost them for whatever option they choose to go with; zero fees are not the only thing to worry about.

That is very correct! I usually see the option of using binance smart chain when making transactions from the exchange. I noticed it too but I was thinking is this really BTC? Because they provide addresses similar to smart contracts of the Ethereum network. So how is it possible for BTC to be transferred using a completely different network? But because of your post I am curious to try it and whether we can really avoid the high costs as you said?

Each to their own, if they are using this pegged tokens with the knowledge that it is not BTC but an altcoin, and also knowing what the risks are, then it is up to them to decide what they want to do.
The LN is not a total solution to the problem of high tx fees, the LN can help with micro tx's, but other than that i would not call it a solution to BTC's scalability issues. Take note that you also have to pay on-chain fees when opening and closing a channel.
I feel the people who use these pegged tokens do not care about this, my thinking is that many of them even hold their funds in Binance, they don't worry about security or anything like that, but just how to make money.

I thought it was a solution to the high transaction fees but then I saw that it's just pegged tokens which isn't really a good solution, better staying in Binance now and wait for the tx fees to go down than to use an altcoin as a replacement and if I recall correctly, when you choose other network options besides the bitcoin network and the lightning network, you will unknowingly convert bitcoin to the tokens that the chosen network uses that's not bitcoin. I'm getting tired of waiting for the transaction fees to go down though, I'm not sure how long I can wait for the ordinals to lose its charm.

I think it's the best answer to the thread and we should not opt for this solution as it's quite risky becasue we are going to be trusting an altcoin that can loose its value anytime. I still believe that the only usable and genuine option in such high fee times is to go with lightning network.

Fortunately, the LN is now available on Binance but still it's not widely used and we can't force others to use it. Even Hhampuz doesn't considers to open lightning channels for his managed campaigns to pay the participants of his campaigns via LN route which makes LN almost not usable as of this time.

LN is not adopted by many users and still people hesitate to go with LN. The only option with us in current network congestion times is to go with an altcoin payment or send payment with Bitcoin by paying high fees.

Here's his statement:

it's not a way to get around high bitcoin fees, but only to replace bitcoin using altcoins pegged to bitcoin to make transactions on the binance network. of course the fees offered are much lower compared to bitcoin, because the network used is bsc, which offers speed and lower fees. moreover, this method only applies if both people transact using a smart chain, it is impossible to do it across chains.

Exertly my thoughts too, Bitcoin on Binance chain isn't like the real Bitcoin in properties, it's only pegged to the value of Bitcoin and as Bitcoin rise or fall so does it, a good example is the stable coin that is pegged to the value of dollars.
The Bitcoin on Binance chain isn't as secured as the original Bitcoin because binance can make a decision on the former and many people holding it as Bitcoin would be greatly affected.

Actually, before answering whether this method is good or bad for avoiding high fees of Bitcoin, I will say that if you convert Bitcoin to altcoin to avoid the fees, it will definitely not be Bitcoin anymore. So I think there will be no question about that this method is quote or bad way to avoid high transaction fee.
To put it simply, it would destroy the decentralization of Bitcoin's own funds.  I have never used this method to store bitcoin, and would never tell anyone to use it to avoid high bitcoin fees.

You are right BNB is one of the cheapest networks, and another alternative is Matic on the Polygon network. I mostly use this network and BNB to make transactions. I also have not made any transactions on this blockchain's network because if we make this transaction, then our BTC will not be on the BTC blockchain anymore and they will be pegged with BNB.

And if BNB goes down, then things might go down for BTC as well, so it is better to make transactions using BNB blockchain, but then we are still able to send the same BTC from the BTC or LN blockchain network, which means if we send BTC from one exchange using the BNB network to another exchange, then we can send BTC from the other exchange to the first exchange using the BTC or LN network, which also puts me in more confusion, but I think giving it a try will solve the problem.

Right, OP want to sent his bitcoin due avoid high fees transaction and some answer or solution recommended with converting to altcoin is not expected answer need by OP. To avoid high transaction fee its not any ideas looking some service bounty campaign manager have to pay highest cost fees when sending reward participants and waiting until lower fees drop is the one solution for OP.
But have another way if sending trough exchange and bitcoin fund not holding in wallet, likely OP have bitcoin in wallet and want to sent it to other wallet or deposit to exchange wallet but can't avoid with higher fees.

It is a solution but not to avoid high transaction fees, the nature is altcoin not totally bitcoin. So when you move your bitcoin to binance, it is real bitcoin but when you start moving it to other network like Binance smart chain (BSC) your bitcoin will be pegged, so technically it won't be Bitcoin anymore... this solution is just to fasten transfers but using other network and pegged tokens.

It is expected to be higher in coming days, we know it is bullish and the volume is getting higher, you should know that if you want to transact with lower fees, the time is now. As you have said, you're not sure when it will go down, perhaps that right there when you need to decide. We don't know how long, but I'm pretty sure it'll take months. However, I'd say you can keep holding your bitcoin coz we are near in the exciting part of the market.

You can't send bitcoin on any other network, so its irrelevant to high transaction fee on bitcoin network.

Any token that has BTC name on is just a token that is pegged to the bitcoin but we don't really know if they have actually have the resources for the pegged tokens or it goes to zero the next morning.

There are a lot that is in and going on in crypto that you wouldn’t know about and there isn’t anything wrong and out that. Just having an open mind and be ready to discover in bits what might be of help or not is how you learn. Be it as it may;

Using the BNB Smartchain isn’t something entirely strange to me but as something I’ve happened to use, not at all. You might want to note that, this exists only on exchanges and that speaks volumes of centralization, it is an altcoin and is liable to effects as associated with the BNB Smartchain. That makes it not a best option when running Bitcoin transactions and don’t look towards storing your precious Bitcoin on altcoin blockchains all because of low fees, it could spell disaster at any minute.

Hmm Op the Bitcoin on the Binance chain is not the real Bitcoin it's a smart contract-based Altcoin that is pegged with the Bitcoin means, that the Price is adjusted with the real Bitcoin there are some potential risks in holding this Bitcoin on the BNB chain or any other network. If the pegging mechanism fails there will be great loss as well as you may potentially lose your asset valuation.

On every pegging there's always a smart contract and if there are any vulnerabilities to the smart contract you better know the consequences. At the same time, the Pegged Altcoin (Bitcoin) will also face acceptability and regularity uncertainty.

Network fees are too high, currently at least for those who are just starting their crypto / Bitcoin journey and I was just having a look at the condition on other side the shit ORDI has a withdrawal fee of $140+ on the Binance so you can say the shit is facing the shit, I'm pretty sure that Bitcoin network fees will take a fall back to normal in coming time, so it's better to avoid any transection for now if you care about the network fees.

Bsc chain has existed for only a few years and people are looking at it as a form of centralised chain because its based on PoSA. It is believed that BSC is not truly decentralised and thus does not stand in tanderm with what Satoshi envisaged the financial system through Bitcoin to become.


There are also concerns over security and Maxis will never consider an altcoin network to function in the capacity of Bitcoin.

Lastly, not every platform that enables Bitcoin transactions has BSC network as an option.

These are the challenges people tend to see more than they see the transaction fees.

BITCOIN never leaves the BITCOIN NETWORK

all subnetwork bridges are not the bitcoin network
anyone telling you to use other network is telling you to stop being a bitcoiner and accept insecure network stuff

the solution to bitcoin issues is not to push people off the network via letting junk continue whilst bitcoiners are being told to leave
thats just dumb

other networks offering you balance they want to pretend as bitcoin is not bitcoin settled to your keys

And FTX was a prime example to see how opaque the financial situation can get when the company actually presented one of their creditors with one out of seven different balance sheets because that was looking the best. It is similar with stable currencies. I have looked into them and Binance claims to have it all backed with various "risk-free" assets etc., but the truth is that nobody can really verify it.

I think all of this would become much worse with additional forms of derivatives like IOUs. At some point the exchange themselves doesn't know anymore what their own financial situation looks like because the derivatives exposure is too high and too complex to conduct reasonable risk assessments and provide accurate numbers. This has been the same during the financial crisis when the complexity of the derivatives for mortgage backed securities got out of control by magnitues higher than the bank could ever cope with. It took them years to find out who is actually responsible for what because derivatives and repackaging can lead to cascade effects that are beyond the control of those companies.

For that reason alone I would be very careful parking my precious crypto assets in BTC IOUs on the BinanceChain. But you summed it up well in the second part of your post: if someone is really only after trading back and forth, the cost vectors probably outweigh the risk vectors.

Yes, I can see BTC, and the network is Bep20. Has anyone tried it? Is that possible if I send Bitcoin to Binance from Electrum using the bep20 network in Binance?

I suddenly became curious about this matter, especially now that the Bitcoin fee network is often congested due to the high fee, and there are many people who are really resisting the reduction of the fee in the amount that we will release Bitcoin.

Bitcoin on binance chain or any other chain ain't no bitcoin. It is an altcoin which (usually) has no history. If you are going to use alts (which makes sense in the current situation btw), at least use the alts which have very good track record like doge, ltc, xmr... These are cheap and relatively reliable alternatives. If you insist on using them wrapped bitcoins, you may get fooled thinking it is the real deal because they also use a different type of deposit/withdrawal address and if you somehow send your coins to those addresses you will lose your coins forever. Take no risks.

Both BSC and ETH network are same because BSC is a fork of ETH and BSC doesn't made a big change.

As I said it's not a real Bitcoin, it's just an IOU where you think you're actually own that coin, but the reality you're not own it.

Obviously you can use that to avoid the high cost of transaction fees, but you need to prepare and accept whenever it goes wrong (hack, freeze etc).

No, you can only send BTC on the BTC network, the BSC network is a different network and is not compatible, so you cannot send BTC from your Electrum wallet to wallets that support this altcoin pegged to BTC, because it is a different network.
This is not a solution to the problem of high fees in the BTC network, this isn't even BTC, but an altcoin on a different network. If you are using it, you are using an altcoin and there's no way that is solving BTC's scalability problems.

I don't think the creators of these tokens have the resources to back the peg because in that case, they will have to have 1 Bitcoin for each token to keep the value and peg intact, otherwise, it won't take long before it starts dropping value. In case a token that is pegged with the price of Bitcoin does have the reserves required for the peg, it might keep the same value as Bitcoin because the value of the reserves will keep fluctuating along with Bitcoin, keeping the price of the token equal to Bitcoin's original price.

However, if that isn't the case, the faith of the token can be like Terra's USTC which was pegged with USD but the peg was just algorithmic and wasn't backed by real resources and it failed miserably. Besides, even if a token has reserves to back the price, it wouldn't have the properties of the original such as decentralization, security, privacy, etc.