🔍 How does modularity elevate blockchain potential?
#ELI5
🔗 Unpacking the Blockchain Layers
Blockchains are generally made up of four core layers:
Data Availability: Ensures that all network participants can access data.
Consensus: Mechanism to agree upon the validity of transactions.
Settlement: Finalizing transactions and adding them to the ledger.
Execution: The actual process of executing smart contracts and transactions.
Monolithic blockchains, commonly known as Layer 1 (L1) - such as Ethereum, Bitcoin, and Solana - manage these layers in-house.
🔗 The Blockchain Trilemma
A central challenge in blockchain development is optimizing three key elements:
Security: Safeguarding against threats and vulnerabilities.
Scalability: Handling a large number of transactions efficiently.
Decentralization: Ensuring a dispersed power structure.
However, as Vitalik Buterin emphasized in the "blockchain trilemma", achieving perfection in all three elements simultaneously is a Herculean task:
Ethereum prioritizes security and decentralization, somewhat sidelining scalability.
Solana, focuses on scalability and security, with some trade-offs in decentralization.
So, how do we navigate this trilemma?
🔗 The Rise of Layer 2 Solutions (L2s)
L2s are blockchains designed to operate atop an existing L1, enhancing its functionalities.
A prime example is Arbitrum, an L2 developed to amplify Ethereum's scalability.
This blockchain architecture brings forth the concept of modularity.
To augment its performance, one blockchain could seamlessly integrate with elements from other blockchains.
The advent of modularity is reshaping the blockchain landscape & paving the way for more robust and adaptive blockchain ecosystems.
Blockchain modularity can go even further but we’ll cover this in part2.
Author:
Diane from ALMAZE MEDIA
Web3 agency helping crypto projects with organic content strategy and production (educational & marketing) from short form social media posts, newsletters to explainer videos.
Want to discuss ?