All successful blockchain projects follow similar roadmaps. They are based on a blockchain architecture with a maximally compensated ecosystem.
The ecosystem of any blockchain is based on:
- Smart Contracts;
Blockchain technology is applied in all three areas and determines the features of the platform’s development. Through natural selection, viable and successful blockchain platforms have come to unify architecture. Therefore, blockchains can be classified by architecture, relying on the general and the different in reaching consensus and some other features.
Block authenticity consensus
In order to create a block on the blockchain, the network must confirm the block’s validity, which means reaching a consensus on its authenticity. There are two main ways to reach consensus. It is achieved either by Proof-of-Work (Bitcoin and Ethereum) or Proof-of-Stake (FreeTON, EOS, PolkaDot).
PoW: the probability of creating a block is proportional to the computing power involved, because a block is mined by calculating a hash function. This is the proof of the bloc’s authenticity — reaching a consensus. Block computation algorithms differ in the complexity of hash computation. For example, the Bitcoin platform using Proof-of-Work sets the complexity at which a block can be generated no more than once every 10 minutes. The Ethereum blockchain also uses the Proof-of-Work algorithm, but with a set block generation rate of once every 15 seconds. These are the main differences in Proof-of-Work protocols.
PoS: more variety. The probability of creating a block depends on the balance on the user account of the blockchain system, and the methods of reaching consensus are divided into several categories, depending on the size of the blockchain and the given development lines of the network.
The Proof-of-Stake algorithm has its own classification sublevels.
Protocols differ in the way they are created and validated.
1. WHO can create a block:
- any node;
- a representative of the validator community.
Most scalable PoS systems opt for block generation protocols by validators.
2. HOW is validation performed:
- check by all nodes of all chains;
- the guarantee of authenticity is given by the signature of validators.
Most blockchains using PoS rely on validator signatures.
There are two approaches to creating blocks by validators, depending on the number of those who are allowed to create a block:
- the only producer creates the block;
- several validators offer their blocks.
Accordingly, the method of validation and consensus differ:
- the block is signed by only one validator who created it;
- consensus is reached by most of the signatures of the validators.
Two chains of work of the blockchain platform
In theory, classification implies many options for reaching consensus. In practice, modern blockchain systems operate on two main chains. A block is created and signed by validators who either delegate this function via the Delegated Proof-of-Stake (DPOS) protocol, or reach a majority consensus via the Byzantine Fault Tolerant (BFT) protocol.
The advantage of Delegated Proof-of-Stake is the ability to quickly generate new blocks. Disadvantage – all nodes or validators must check the received blocks. Thus, the block collects the signatures of the validators until it is sufficiently validated. This takes time, and there is also a danger of forks.
The advantage of Byzantine Fault Tolerant is to create a block with a status already confirmed by many validators. If most of the validators are correct, forks cannot appear at all. Disadvantage – it takes time for many validators to reach consensus. As a result, blocks are created more slowly. For example, the FreeTon blockchain works with BFT and involves the creation of a block within 2 to 10 seconds, depending on the distance between the validators.
As you can see, each of the protocols has its own advantages and disadvantages.
BFT is better suited for tightly coupled multi-blockchain systems like FreeTon. Adjacent chains can act immediately after creating a block, without fear of forks and without waiting for sufficient confirmation of the correctness of the block.
DPOS is convenient in a loosely coupled multi-blockchain system where no inter-chain interaction is required. An example is the BitShares blockchain using DPOS.