Blockchain is a distributed, public, and encrypted digital ledger that may record transactions across several computers without central authority or tracking. It eliminates the need for third parties while providing a safe and unchangeable data storage method.
Blockchain relies on the distributed ledger principle, which records transactions chronologically by adding each new block to an existing chain. A blockchain protocol is a command that governs how the blockchain technology operates and functions.
Suggested Read: Blockchain Development Roadmap
What is A Blockchain Protocol?
Protocols in a blockchain system are the set of guidelines for how the system should function. Blockchain protocols specify the procedures for verifying, documenting, and protecting blockchain-based transactions and data. By regulating block generation, transaction validation, and consensus procedures, they keep the network secure and in agreement.
These protocols facilitate blockchain technology’s decentralized structure by allowing several parties to agree on the blockchain’s state without a trusted third party. The features and techniques used to validate and add new transactions to the blockchain might vary amongst blockchain protocols.
When designing a blockchain network, the protocol you choose will affect many metrics, including safety, capacity, speed of transactions, and energy efficiency. So learning about the different protocols before designing a blockchain network.
Here is a blockchain protocol list you need to know in 2023:
HIVE (PoS-Based)
Hive (HIVE) is a Proof of Stake (PoS)-based blockchain protocol and distributed social networking platform. Users’ stake in the Hive network determines the value of the benefits they receive for participating in the protocol.
By letting clients cast votes on content, organize posts, and receive HIVE tokens for their participation, Hive encourages users to participate and engage with the site actively. This PoS blockchain technology provides an alternate method for rewarding users and spreading content through social media.
TRON (Smart Contract-Based)
TRON (TRX) is a blockchain technology and decentralized platform designed to facilitate the worldwide distribution and consumption of digital information for entertainment. It uses smart contracts to run different apps and services on its network.
TRON’s blockchain protocol facilitates the creation and deployment of DApps and removes intermediaries from the relationship between content producers and their audiences. Within the TRON network, the TRX coin serves as a means of transaction and voting on network policies.
TRON intends to revolutionize digital content distribution and consumption by creating a robust framework for the entertainment sector.
DeFi & Cosmos (ATOM)
DeFi, which stands for ‘Decentralized Finance,’ is an umbrella term for a blockchain-based financial protocols and applications family. It seeks to replace centralized financial institutions like banks with a decentralized version of the same infrastructure and services.
Cosmos (ATOM) is one of the top blockchain protocols that aims to facilitate communication across networks and the expansion of existing ones. As a consensus algorithm, Cosmos employs Tendermint, which combines Byzantine Fault Tolerance (BFT) and Proof of Stake (PoS) techniques for optimal safety and throughput.
The Cosmos network’s scalability and interoperability as a backbone for DeFi applications have led to its meteoric rise in popularity. By facilitating communication and collaboration amongst DeFi protocols and apps, this framework helps to foster a more robust and streamlined decentralized financial system. To stake, control, and participate in the Cosmos network’s consensus mechanism, users must have ATOM tokens, the network’s native currency.
Oracle Network & Chainlink (LINK)
Blockchain-based smart contracts can access external data through Chainlink (LINK), an oracle network. Oracles connect the blockchain to the outside world, facilitating real-time data access and off-chain system interactions for smart contracts. Chainlink’s mission is to ensure that all data used in smart contracts are correct and unchangeable.
Chainlink nodes, also called Chainlink oracles, function as decentralized networks. These nodes securely deliver information gathered from various sources, such as APIs, web pages, and different blockchain networks, to smart contracts.
Chainlink uses a distributed consensus approach to guarantee the accuracy and trustworthiness of its data by having many oracles independently contribute and validate it.
Solana (PoS-Based)
With its innovative Tower BFT (Byzantine Fault Tolerance) PoS consensus mechanism, the Solana blockchain protocol provides a high-performance blockchain platform. Solana’s PoS algorithm aims to ensure the network’s continued success by providing secure, decentralized transactions at lightning speeds.
The Solana protocol relies on validators to confirm and validate transactions. One’s willingness to “stake” their SOL tokens as collateral determines one’s eligibility to become a validator. A validator’s odds of being chosen to build a fresh block and receive block rewards increase proportionally to the number of SOL tokens they invest.
Solana’s PoS algorithm also includes a reputation and penalty system to assure validators’ trustworthiness further. A validator may temporarily lose staked tokens as a penalty for malicious behavior or failure to execute tasks, such as double-spending attempts or being offline.
Solana’s PoS consensus algorithm generally seeks to deliver a trustworthy blockchain platform that is ideal for a myriad of DApps and services thanks to its low fees, quick confirmation times, and high throughput.
Parachains & Polkadot (DOT)
Polkadot is a blockchain system that enables chain communication. Parachains are decentralized blockchains that try to solve the fragmentation problem by interacting with one another.
A parachain is a secondary blockchain that operates in tandem with the primary Polkadot chain. Parachains built on Polkadot can have their consensus method, governance style, and features while utilizing the network’s security and scalability.
The Relay Chain is the central node for inter-chain consensus and communication in Polkadot’s parachain architecture. The Relay Chain is responsible for ensuring the integrity of the network as a whole, validating transactions, and facilitating communication between different parachains.
Polkadot’s parachain design relies heavily on a shared security paradigm, which is one of its primary characteristics. Parachains can use the Polkadot network’s security features without managing their own validators. The connected parachains benefit from a higher level of security because of this common security paradigm, and new projects have a lower barrier to entry.
By introducing a governance framework, the Polkadot protocol gives token holders a say in network updates, parameter modifications, and the creation and destruction of parachains. This governance structure encourages distributed decision-making and guarantees the community’s input into Polkadot’s future development.
Polkadot aspires to build a scalable, linked blockchain environment where multiple dedicated blockchains can coexist and interact, stimulating creativity and unleashing potential for decentralized apps and services through interoperability and shared security.
Cardano (ADA) & Ouroboros
The Ouroboros protocol lies at the heart of the Cardano blockchain infrastructure. In contrast to existing blockchain networks, which use time-tested proof-of-work (PoW) algorithms, Ouroboros is based on a proof-of-stake system.
Ouroboros presents a new Proof of Stake system, “Proof of Stake with a Slot Leader Election.” The protocol segments time into intervals called slots; during these slots, a validator is selected to generate a block. The selection is arbitrary but takes into account the stake of the validators. This layout aims to make block building as secure and equitable as possible.
Cardano uses a two-layer design to achieve this goal, with the settlement level (Cardano Settlement Layer, or CSL) operating independently of the computing layer (Cardano computing Layer, or CCL). This partitioning allows for customization and potential future upgrades without jeopardizing the integrity of the original blockchain.
Cardano emphasizes extensive scholarly investigation and widely accepted scientific principles to guarantee the protocol’s robustness, safety, and scalability. Formal approaches, which include mathematically evaluating the validity and safety of the protocol, play a vital role in the development of Cardano.
Ouroboros and Cardano’s overarching goal is to facilitate the development of novel decentralized apps and smart contracts on a blockchain platform that is both scalable and sustainable, utilizing the strengths of proof-of-stake agreement and incorporating the rigors of academia.
PoS Consensus Mechanism in Binance Smart Chain
Binance Smart Chain (BSC) uses a PoS consensus technique to reach a consensus on the network and verify transactions. PoS selects validators to mine new blocks and maintain network security in proportion to the number of tokens they own and are prepared to “stake.”
Proof-of-Staked Authority (PoSA) is the name for BSC’s PoS consensus process. The BSC network selects validators based on their BNB (Binance Coin) amount. An individual’s ability to build novel blocks and authenticate transactions is proportional to their BNB and stake.
There are many benefits to using the PoSA consensus process in BSC. Since it does not rely on miners to solve difficult calculations, it uses less energy than conventional proof-of-work (PoW) techniques. This renders BSC a more environmentally friendly and robust blockchain platform.
Second, PoSA facilitates increased transaction throughput and quicker block confirmations. Faster block production by validators means faster transaction confirmations and more scalability.
Finally, the PoSA method motivates token holders to help secure the network by acting as validators. Staking BNB coins allows holders to help keep the network secure and potentially profit from doing so. When it comes to distributed applications and payments within the Binance ecosystem, the PoSA consensus mechanism is a trusted option as it provides a more efficient, scalable, and participative approach to consensus.
PoW Consensus Mechanism & Bitcoin
The Bitcoin blockchain relies on the PoW consensus mechanism as its core algorithm for reaching consensus and validating transactions. This is a distributed approach to network security and fraud prevention using computing effort.
In the Proof-of-Work process, miners compete to add new blocks to the blockchain by solving complicated mathematical problems called hash functions. Solving these enigmas requires a lot of time, effort, and energy. Miners must keep running calculations until one of the new blocks succeeds. The miner receives the freshly created bitcoins and a portion of the transaction fees.
There are many advantages to Bitcoin’s PoW consensus process. First, it guarantees the blockchain’s safety and immutability. Hackers can’t alter previous blocks or fabricate transactions due to the computing work necessary to answer the riddles, as they would need Bitcoin’s vast amount of processing power to outrun the honest miners.
Second, PoW enables a distributed network where no single location or organization is responsible for the bulk of computing. This ensures the network’s robustness and censorship resistance while also helping to prevent centralization.
The PoW consensus process has been crucial in making Bitcoin the pioneer and widely recognized decentralized digital money. In practice, it has become a trustworthy and safe approach to distributed consensus.
Smart Contract and Ethereum
As a blockchain system, Ethereum is responsible for pioneering the idea of smart contracts. It’s a distributed system that helps programmers create and launch DApps and smart contracts. Ethereum’s blockchain can be programmed so developers may write and run smart contracts in its native programming language, Solidity.
Smart contracts offer many benefits on the Ethereum network. Since the software and contract conditions are verifiable by anybody on the network, they promote openness. Smart contracts are also beneficial to security because their implementation is challenging to sabotage or censor.
With the right conditions, smart contracts can automatically execute predetermined activities and simplify the transfer of assets or data. DeFi and NFTs (non-fungible tokens) have flourished due to Ethereum’s blockchain system and smart contract features. It has sparked creativity and introduced novel private, trustworthy, and intermediary-free digital communications options.
In A Nutshell
Blockchain protocols have altered the landscape of finance, data storage, and distributed applications. By utilizing distributed ledger technology, they provide transparency, immutability, and security. Blockchain protocols are the backbone of the decentralized future, opening up novel avenues for increased openness, trust, and efficiency across various contexts. The continued innovation and acceptance of blockchain protocols can radically alter business models and give people more control over their digital lives.
