The Difference Between Networks
Blockchains differ in compatibility with wallets, platforms, and applications, transaction speed, and fees.
Each blockchain has its own token standards. A standard defines the functional capabilities and properties of a token and serves as rules for creating and operating a token.
A standard is needed to ensure compatibility of crypto assets, simplify development, and facilitate interaction between smart contracts. Without standards, it would be challenging to use different tokens, as each would require its own wallet
Typically, blockchains have several standards:
- Ethereum: ERC-20, ERC-721, ERC-777, ERC-1155, ERC-4626, and others.
- Tron: TRC-10 and TRC-20.
- BNB Chain: BEP-2 and BEP-20.
Initially, a cryptocurrency is issued on a specific network but can be moved to others or issued on another blockchain, expanding its utility.
For example, BTC was created on the Bitcoin network but now exists on other networks as well. Bitcoin itself is not issued on another blockchain, but wrapped versions exist. Here are a few examples:
- Wrapped Bitcoin (WBTC) on Ethereum (ERC-20).
- Bitcoin BEP2 (BTCB) on BNB Beacon Chain (BEP-2).
Wrapped tokens are copies of cryptocurrencies issued on another blockchain. These tokens are created by locking the original cryptocurrency in a smart contract as collateral. When the original becomes a wrapped token, it is sent and locked at a specific address and cannot be used until the wrapped version is burned down. This ensures that the total supply of the cryptocurrency remains unchanged.
The stablecoin USDT is issued on many networks, allowing it to be used in most popular blockchains.
Choosing the Right Blockchain Network
The choice of a blockchain network is contingent upon the intended use of cryptocurrency. Factors such as the preferred wallet and trading platform play a pivotal role in this decision-making process.
The primary criterion for selecting a network revolves around network support. For instance, a decentralized exchange (DEX) built on Ethereum will not support the Tron network. Non-custodial wallets, however, offer a broader array of choices. For example, the MetaMask wallet allows users to add multiple networks, including BNB Chain, Ethereum Main Network, Arbitrum One, Avalanche Network C-Chain, Fantom Opera, Optimism, Polygon Mainnet, and others.
Nonetheless, it’s important to note that Bitcoin and Tron networks are not supported by MetaMask. Consequently, Bitcoin can be stored on this wallet in the form of BTCB and USDT issued on supported blockchains like BNB Chain and Ethereum.
Centralized platforms also maintain lists of supported networks.
Each network boasts its own advantages and drawbacks.
Bitcoin, while known for its reliability, suffers from longer transaction confirmation times and higher fees.
Ethereum, on the other hand, offers faster transactions and lower fees compared to Bitcoin. It is supported on most decentralized platforms and wallets. However, its operations tend to be slower and more expensive than those of newer blockchains.
BNB Chain offers rapid transactions and lower fees, making it a cost-effective alternative to Ethereum and Bitcoin. It is supported by many DEX platforms and wallets, although it is not as widespread as Ethereum.
Tron, like BNB Chain, boasts swift transactions and lower fees compared to Ethereum and Bitcoin. However, it is supported on fewer decentralized platforms due to its relatively lower popularity and the infrequency of Tron-based platforms.
What Happens When You Send Cryptocurrency to the Wrong Wallet Network?
Sending cryptocurrency to the wrong blockchain network can have dire consequences, leading to potential loss of funds. Transactions in the blockchain are immutable and cannot be reversed once executed.
If a transaction has not yet been confirmed, there may be a chance to cancel it.
How to Return Cryptocurrency Sent to the Wrong Wallet
If you’ve inadvertently sent your digital assets to an incorrect wallet within the same centralized exchange, your first step should be to reach out to the exchange’s customer support. They may be able to assist in rectifying the situation and returning the funds to your intended destination.
There is an exception in the case of the stablecoin USDT, thanks to its centralized emitter. If you’ve mistakenly sent USDT to the wrong address, you can contact Tether’s customer support to request the return of your funds.
Transaction Fees: What Determines Them?
Transaction fees vary across different blockchain networks, with each employing a distinct fee calculation mechanism.
Bitcoin: Transaction fees in the Bitcoin network are determined by the size of the transaction, measured in bytes. The higher the fee per byte and the larger the transaction size, the more expensive the fee.
Ethereum: Ethereum employs a fee structure called “gas,” which is based on computational resources required for transaction processing. Gas fees depend on gas limits per operation and gas prices. During network congestion, gas fees tend to be higher.
Tron: Transaction fees in the Tron network are contingent on the token standard used. Tron supports two standards: TRC-10 and TRC-20.
How to Reduce Transaction Fees in Cryptocurrency Transactions
Choose a cost-effective network: Opt for a blockchain network that offers lower transaction fees. This approach is particularly useful on centralized exchanges where users often have limited control over transaction fees.
Customize Fees on Decentralized Wallets: When sending cryptocurrency through decentralized wallets, users can customize the transaction fee. Faster transaction confirmations usually come with higher fees. This mechanism is based on rewarding validators. Choosing a slower confirmation time can result in fee savings.
Explore fee-free transactions in Tron: Tron offers a mechanism for fee-free transactions and fee-saving options. You can find out how it works in our article.
Why Transaction Times Differ Across Blockchain Networks
The time it takes for a cryptocurrency transaction to be processed varies across different blockchain networks and is influenced by the network’s work mechanism. It affects the time consumed for checking and adding information to the block.
If the network is not initially designed for a large number of transactions, then their verification takes a long time. The scalability of a blockchain network plays a critical role in transaction speed. Blockchains that are not designed to handle a large volume of transactions may experience slower processing times. Scalability issues have been a challenge for Bitcoin, but newer and more advanced blockchains have addressed this problem and offer faster transaction speeds.
TPS is a metric that represents the number of transactions a network can process per second. Blockchain networks vary significantly in their TPS capabilities. Networks with higher TPS can handle more transactions in a shorter amount of time, resulting in faster transaction confirmations.