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Blockchain Architecture

Blockchain architecture.

The aim is to provide trust-less transactions by providing immutable integrity that provides verifiable truth.

Content​

Context

Components​

Components of decentralised web3 infrastructure and solution providers.

Components of blockchain architecture.

See blockchain architecture layers and technologies

Infrastructure​

The blockchain infrastructure consists of 5 layers:

  • The hardware infrastructure layer is the foundation of blockchain technology, comprising the physical devices that power the network.
  • The data layer is responsible for storing and retrieving information.
  • The network layer facilitates communication between nodes on the blockchain.
  • The consensus layer ensures that all nodes on the network agree on the current state of the blockchain.
  • The application layer provides an interface for users to interact with the blockchain.

In addition, another classification is used by the crypto community to describe the same architectural layers, and it goes as follows:

  • Layer 0: includes hardware and data layer
  • Layer 1: contains network consensus layer
  • Layer 2: Represents networks built on top of existing blockchains helping to solve their underlying issues
  • Layer 3: Is the application layer, hosting applications for users to interact with.

Layer 0 to 3 refer to blockchains based on their characteristics. For example:

L0: Polkadot, Avalanche, Cardano provide cross-chain operability protocols L1: Bitcoin, Ethereum, Solana provide base layer blockchain networks L2: Optimism, Polygon, Arbitrum provide scaling solutions built on top of underlying networks L3: Icon, Quant, IBC Protocol provide application layer solutions built on top of Layer 2 networks

Modular vs Integrated​

Pros and Cons of Modular vs Integrated Blockchain Architecture.

Modular Components​

Pros:

  1. Scalability: Modular blockchains can handle higher transaction volumes by separating functions like execution, consensus, and data availability into distinct layers, allowing each to be optimized independently.
  2. Specialization: Different layers can specialize in specific tasks, leading to greater efficiency and performance. For example, Celestia focuses on data availability, while Dymension provides a settlement layer.
  3. Flexibility: Developers can choose the best components for each layer, tailoring the blockchain to specific needs and use cases.
  4. Interoperability: Modular blockchains can integrate with various networks, enhancing the ecosystem's overall functionality and connectivity.

Cons:

  1. Complexity: The separation of layers introduces technical and social complexity, making development and coordination more challenging.
  2. Centralization Risks: Relying on specific layers or entities for certain functions can create central points of failure, potentially compromising decentralization and security.
  3. Fragmentation: The proliferation of different layers and standards can lead to fragmented liquidity and social coordination issues.
  4. Security Dependencies: The security of the entire system depends on the security of each individual layer, which can be a vulnerability if one layer is compromised.

Integrated Components​

Pros:

  1. Simplicity: Integrated blockchains consolidate all functionalities within a single layer, simplifying development and user experience.
  2. Composability: Maintaining all functions within one layer ensures seamless interaction between different components, which is beneficial for developing complex smart contracts and applications.
  3. Lower Latency: Integrated blockchains can achieve lower transaction latency due to the unified processing of all functions.
  4. Stability: With fewer moving parts and dependencies, integrated blockchains can be more stable and easier to manage.

Cons:

  1. Scalability Limitations: Integrated blockchains often face scalability issues as all nodes must perform all tasks, leading to bottlenecks.
  2. Resource Intensive: The need for all nodes to handle all functions increases the resource requirements, potentially centralizing the network around those with more resources.
  3. Trade-offs: Integrated blockchains must balance security, decentralization, and speed, often sacrificing one to improve the others.
  4. Less Flexibility: The monolithic nature limits the ability to optimize or upgrade individual components without affecting the entire system.