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Blockchains

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Crypto replaces Trust with Truth.

Architecture​

Modular vs Integrated (Monolithic) blockchains consist of four functions.

  1. Execution ensures that only valid transactions are executed that result in valid state machine transitions.
  2. Settlement entails an environment for execution layers to verify proofs, resolve fraud disputes, and bridge between other execution layers.
  3. Consensus mechanisms ensure nodes of a distributed blockchain network agree on the truth.
  4. Data Availability (DA) entails making the transaction data available. Note that execution, settlement, and consensus require DA.

Chain Decisions

Layer 2 and 3​

Scaling solutions for blockchains, primarily Ethereum.

Problems addressed by L2/3s ecosystems:

  • Scalability
  • Cost
  • Speed
  • Privacy

Advantages of L2/3s ecosystems:

  • Reduced Cost and Effort
  • Network Effects
  • Shared security

Schema​