Blockchain technology, at its core, revolutionizes the way we handle data, execute transactions, and establish consensus. Two prevalent architectural models have emerged in the blockchain space: Monolithic Blockchains and Modular Blockchains. In this comprehensive exploration, we delve into the intricacies, advantages, and disadvantages of each, using examples like Celestia and Polygon Avail to highlight the evolution of blockchain technology.
Monolithic Blockchains: A Unified Structure
Bitcoin's Monolithic Workflow
Monolithic blockchains, such as Bitcoin, Solana, and early Ethereum, embody a distributed system with a single, unified structure. The entire process, from transaction validation to consensus and settlement, occurs within a single layer.
Bitcoin's Monolithic Process
- A Bitcoin node receives a transaction, verifies the signature, and ensures compliance with consensus rules.
- Valid transactions enter the mempool for potential inclusion in a block.
- Miners select transactions from the mempool, creating a block candidate.
- Miners broadcast the block for network validation after finding a nonce value adhering to Proof-of-Work rules.
Functions Provided by Monolithic Blockchains
- Data Accessibility: Every node maintains a copy of the entire blockchain, facilitating peer-to-peer data retrieval.
- Execution: Nodes validate transactions based on consensus algorithm rules.
- Consensus: Nodes collectively agree on which transactions to process and their order.
- Settlement: Ensures irreversible confirmed transactions and handles dispute resolution.
Modular Blockchains: Specialized Components
Modular blockchains represent a paradigm shift, introducing specialized blockchains that handle specific tasks, while transferring others to separate layers. This Lego block-like approach allows components to combine for various constructions. Notable examples include rollups, focusing on transaction execution while delegating consensus, data accessibility, and settlement to the parent chain.
Rollups: A Modular Example
Rollups, specialized in transaction processing, enhance scalability by delegating consensus, data availability, and settlement functions to the parent chain.
How Modular Blockchains Operate
Ethereum's Sharding Implementation
Taking Ethereum as an example of a transition to a modular structure, the implementation of sharding is crucial. Sharding divides the blockchain into multiple subnets, each processing a portion of network activity. Nodes manage only the registry section they are assigned, processing transactions and confirming them, avoiding the need to maintain the entire registry.
Rollups in Ethereum
Rollups offer an approach aligned with the modular concept, improving Ethereum's performance. They outsource computations, focusing on settlement, consensus, and data accessibility.
Pros and Cons of Monolithic Blockchains
Advantages of Monolithic Blockchains
- Simplicity in Design: Monolithic blockchains offer a straightforward design, minimizing complexities during development and maintenance.
Disadvantages of Monolithic Blockchains
- Low Scalability: Monolithic blockchains suffer from low throughput, impacting system efficiency.
Pros and Cons of Modular Blockchains
Advantages of Modular Blockchains
- Scalability: Modular blockchains exhibit scalability by offloading transaction processing to L2 networks.
Disadvantages and Risks of Modular Blockchains
- Complexity: Developing and maintaining a multi-layered architecture for modular blockchains can be complex.
Exploring Modular Blockchains: Celestia and Polygon Avail
Celestia: Redefining Modularity in Blockchain
Celestia stands out as a prominent representative of modular blockchains, raising $55 million in October 2022. This blockchain serves as a foundation for rollups and other modular chains, offering data accessibility and consensus.
Rollkit Module for Bitcoin Blockchain
In March 2023, Celestia introduced the Rollkit module, designed to support rollups on the Bitcoin blockchain.
Lemon Mint Mainnet Launch
In the fall of 2023, Celestia developers successfully launched the Lemon Mint mainnet.
Architectural Focus on Data Organization
Celestia's architecture focuses on efficiently organizing and storing data, allowing it to concentrate on creating an organized approach to data storage.
Polygon Avail: Elevating Scalability
Polygon is developing Avail, a modular solution aimed at reducing blockchain loads and enhancing scalability.
Avail as a Data Accessibility Layer
Positioned as a data accessibility layer, Avail enables the placement and confirmation of data accessibility outside the network.
Transaction Ordering and Data Availability
Avail specializes in transaction ordering and maintaining data availability without engaging in validation.
Sovereignty and Flexibility
Avail offers the flexibility to create arbitrary blockchains with any execution environment without compromising decentralization or security.
Rollups: A Modular Approach
Rollups operate within the context of a modular approach. Optimistic rollups leverage the Optimistic Virtual Machine, while ZK-rollups use zkEVM as the execution layer for smart contracts and transaction processing.
Dependency on Ethereum
Both types of rollups rely on Ethereum for essential functions, such as data availability, consensus, and settlement.
Validium: Off-Chain Execution
Validium, a scaling technology, shares similarities with ZK-rollups. The distinctive feature of Validium is that transactions are executed off-chain.
Modular Stack of Validium
The modular stack of Validium includes:
- Execution layer
- Settlement and security layer (parent chain)
- Data availability and consensus layer (DAC or separate PoS network)
Examples of Validium-based Platforms
Notable platforms based on Validium include Immutable X, ZKFair, ApeX, rhino.fi, and Sorare.
In conclusion, Celestia and Polygon Avail, along with innovative concepts like rollups and Validium, showcase the potential and diversity of modular blockchains in addressing scalability, data accessibility, and security challenges in the blockchain space. These examples contribute to the ongoing evolution of blockchain technology.
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