What Are The Different Types Of Public Blockchain?
There are thousands of different live blockchains out there; what makes them different? Bitcoin, Ethereum, Cardano, Solana, all these big blockchains we know and love are what we call public blockchains.
Public blockchains are usually permissionless, decentralized, and use unique consensus mechanics to ensure the security of the data. However, most of them had their specialty to differentiate themselves from the rest.
The Bitcoin blockchain is known as the OG blockchain, which is an immutable transaction record ledger.
Bitcoin was invented by an unknown entity called Satoshi Nakamoto, designed to be the first practical blockchain and prove the possibility of digital money.
Nowadays, $BTC, the coin native to the bitcoin blockchain, is considered a store of value by the crypto community.
Ethereum, second only to Bitcoin in market cap, is famous for its smart contract functionality.
Unlike Bitcoin, Ethereum is more than just a digital money transaction ledger; smart contracts made Ethereum a virtual computer; hence it was called “Ethereum Virtual Machine” (EVM).
Aside from the coin native to Ethereum, Ether ( $ETH), the EVM had a token standard called ERC-20, which allows developers to create a token within a smart contract compatible with EVM.
Examples of some popular ERC-20 tokens are blockchain Oracle, Chainlink ($LINK); USD-pegged stable coin, Tether (USDT); the DAO token of MakerDAO, Maker ($MKR), etc. Many Dapp, Defi, and DAO also reside in the Ethereum ecosystem.
However, as the network expands, the Ethereum network suffers from developer growth decrease due to high-gas fees. To stay in the game, Ethereum.org planned to implement ETH 2.0 by 2022, introducing multiple mechanisms to the Ethereum network.
Ethereum’s scalability problem is prominent to the crypto community. Naturally, the community would look for alternative solutions to this problem, one of which is Solana, developed by Anatoly Yakovenko, a former lead architect in Qualcomm.
Solana is a layer one blockchain that utilizes Proof-of-History, a variant of Proof-of-Stake, to increase the Transaction per second of the Solana blockchain.
To give you a perspective, Bitcoin’s TPS is 7; Ethereum’s TPS is around 15-20; Solana’s TPS could be as high as a wrapping 65,000 transactions per second. Solana is so affordable compared to Ethereum, hence drawing a lot of traction in 2021.
One thing worth mentioning is that the Solana ecosystem is relatively isolated from the rest as Solana’s native projects are not compatible with other blockchains such as Ethereum and Binance Smart Chain, etc.
While also known as one of the “Ethereum killers” like Solana, Avalanche does not isolate itself from other blockchain networks. Instead, Avalanche prides itself on transaction speed, low costs, eco-friendliness, and inclusivity with other blockchain networks such as Ethereum.
Unlike Solana that uses PoH in hopes of resolving the scalability problem, Avalanche divided its primary network into three separate chains: P-chain for data validation and storage; X-chain for asset creation and exchange; and C-chain for smart contracts. Each chain could interoperate with each others.
Moreover, Avalanche used DAG (Directed Acyclic Graph) as the consensus mechanism, massively increasing the network throughput with subsampling and transitive voting, making Avalanche one of the most prominent public blockchain in the crypto space.
Before we cover the Polygon network, let’s take a into the concept of layer 1 and layer 2 blockchain.
The blockchains we’ve covered so far were all layer 1 blockchains, meaning they are building as a foundation of their own. So we could see a pattern here: every new layer 1 blockchain is trying to solve the existing problem.
However, that is not the only way to solve the scalability problem of blockchain. They had also come up with layer 2 solutions, such as Plasma to Ethereum and Lightning to Bitcoin, which basically is a protocol that is built on top of a layer 1 blockchain. The changes made in layer 2 would not affect the mainchain (layer 1), which is why some might call layer 2 protocols “off-chain” solutions.
Coming back to Polygon, formerly known as MATIC, is an Ethereum scaling solution. The polygon network was created to offload the over capacitated Ethereum network using layer 2 solutions (Plasma chain) and side chains (MATIC PoS sidechain). Until now, the Polygon network is still considered as one of the, if not only, widely accepted Ethereum scaling solutions.
Binance Smart Chain
Binance smart chain is the blockchain network launched by the centralized crypto exchange platform Binance. The Binance smart chain is basically a modified fork from Ethereum, is in other words, it is almost a replica of the Ethereum blockchain.
With cheaper fees and faster transactions, one would think that it should dominate the market. However, platform-based blockchain such as Binance smart chain is relatively centralized as there are fewer active nodes in the network at any given time. That is also why BSC could achieve a higher TPS and cheaper fees.
In summary, we had introduced some popular public blockchains and various ideas like layer 2, forking, etc. However, what we had covered here is by no means the whole truth of what public blockchain is.
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