Monolithic & Modular Blockchains
What is a blockchain, the 3 core concepts of a blockchain, monolithic blockchains & examples, modular blockchains & examples.
INTRODUCTION:
Primarily, blockchains were built with the ability to carry out multiple important functions and while this became the norm for building them, it can't be denied that it made these blockchains substandard.
However, lately, developers are beginning to see an alternative: building new blockchains that can separately handle one or few of those functions effectively.
Maybe you've come across monolithic and modular blockchains before or perhaps, this is your first time seeing it. Either ways, this article aims to enlighten you on what they both are. So, sit tight as we go on a joy ride - ok, maybe not a joy ride but sure an insightful ride into monolithic and modular blockchains.
WHAT IS A BLOCKCHAIN?
Before we begin, let's briefly recap what a blockchain is. A blockchain is a system in which records of (crypto) transactions are processed and permanently stored across various computers (nodes). A blockchain is typically a chain of digital blocks which stores crypto transactions.
To be able to comprehend the designs of a monolithic and modular blockchain, we have to understand the workings of a blockchain in general and doing this implies explaining the core concepts of a blockchain.
THE THREE CORE CONCEPTS (FUNCTIONS) OF A BLOCKCHAIN
There are three main concepts, also referred to as functions for which a blockchain is generally known to handle.
These core concepts are: consensus, data availability and execution.
1. Consensus: this is the part of the blockchain which ensures that all nodes agree on what transactions will be processed and the mode of validating each of the transactions. This is where the PoW, PoS, and other consensus mechanisms come in.
2. Data Availability (DA): this is the part of the blockchain which ensures that the data which nodes need in order to validate transactions are made available for them. Nodes are able to access transaction data because they are made available.
3. Execution: this is the smart contract part of the blockchain which is involved with processing and executing transactions in the network.
All these concepts are essential in the blockchain network and that's why the blockchains built before now require the nodes (network participants) to handle all of them.
Now we can get to the main topic of this article.
WHAT IS A MONOLITHIC BLOCKCHAIN?
Monolithic, typically, implies a single, unified structure.
A monolithic blockchain is a blockchain that is built with the ability to carry out all the core functions (consensus, DA, execution). Monolithic blockchains are built in such a way that one layer handles everything from consensus to execution to data availability.
EXAMPLES OF MONOLITHIC BLOCKCHAINS
1. Bitcoin: the first known blockchain, launched in 2009 is a monolithic one. Bitcoin handles all the ealier mentioned functions by itself. It is a very secured network and one of the most decentralized.
2. Ethereum: known for its high cost of gas and large number of innovative projects built on it, Ethereum is a fully decentralized and secured monolithic blockchain. It is known to have a single layer which performs all the core functions.
3. Solana: launched in 2020 and dubbed as the "Ethereum killer" because of its promises to improve scalability which seems to be Ethereum's current issue. Solana is a monolithic blockchain because it carries out execution, consensus and DA all on a single structure.
Other examples of monolithic blockchains include: Dogecoin, Binance Smart Chain, Algorand, TRON, Litecoin, etc.
NOTE: All of the above-mentioned blockchains are regarded as monolithic if you don't consider their utilization of layer 2s.
More than 75% of monolithic blockchains are secured and decentralized while being less scalable. Bitcoin, for instance, is known to be capable of handling only 7 transactions per second (tps). Ethereum can handle 15 - 20 tps. This is because as monolithic blockchains have only one layer handling three heavy functions, they can't risk being compromised. So, security is of topmost importance.
Also, the blockchain technology came with the promise of introducing a trustless and open system for users, so decentralization is vital as well.
This leaves developers no other choice than to ditch scalability because, traditionally, a blockchain can't be 100% secured, 100% decentralized and still be 100% scalable. This theory is termed the blockchain trilemma. You can read more about it here.
In a bid to carry out all the functions whilst remaining secured and decentralized, blockchains are only able carry out a small number of transactions. This is why they resort to external assistance like layer 2s (e.g Polygon for Ethereum, Lightning Network for Bitcoin, etc) and even on-chain solutions like sharding to help solve the scalability issue.
With sharding came the knowledge that a blockchain can be split into various, separate, independent units and this introduced the idea that one blockchain doesn't really have to do it all. Thus, the idea of modular blockchains was birthed.
WHAT IS A MODULAR BLOCKCHAIN?
A modular blockchain is a blockchain which handles one or a few of those aforementioned core functions while outsourcing the rest.
Modular blockchains specialize in specific functions (either execution or DA or consensus) and do not attempt to do it all. With these types of blockchain, specialization is key and this helps improve their scalability because tasks are reduced, so there's basically more space and time to process more transactions.
EXAMPLES OF MODULAR BLOCKCHAINS
1. Celestia: this is the first modular blockchain that specializes in providing data availability and consensus for other blockchains looking to deploy. It doesn't deal with execution.
2. Fuel Network: is a modular blockchain which focuses on execution.
3. Rollups: these are layer 2s designed to act as modular blockchains. They specialise on execution. Arbitrum, Zksync, Optimism are a few samples of rollups.
4. Syscoin, etc.
In essence, modular blockchain differs monolithic blockchain in that the former specializes in performing one or two of the three main functions of a blockchain, while the latter generalizes in performing all.