The market has been sweeping the observation zone recently, and there is nothing to say. Either it doubles or it is off the shelf. If you play this kind of market, your hair will fall off. Today I will make a popular science content, which is very friendly to those who are new to L1 and L2.
Let's consider this question: suppose there is a country with only one leader who is responsible for all aspects of government affairs. A country without power and checks and balances of force. What will happen? Is it terrible?
This is my definition of the "holistic blockchain" I'm going to talk about today. First of all, it is a blockchain, but everything is handled by itself, and no one else is needed at all.
The consensus layer mentioned earlier is the beacon chain. It tells you what is real. Then the data layer notifies you of what has happened and stores it. The execution layer notifies you of what is happening and performs calculations.
All of these layers are very complex, and the overall blockchain has all of the nodes and all of the hardware on the chain, trying to do all three of these things at the same time in the same place.
After talking about the whole, let's talk about modularization, which is a hot topic every day. Many of the projects mentioned before are working on this sector. Modular blockchains are blockchains that operate according to the principle of modularization. They usually handle a set of specialized responsibilities (usually off-chain). In layman's terms, it is the relationship between the general contractor and the subcontractor. Party A has Party A under Party A.
Blockchain cannot perform all three functions (consensus, data availability, and execution) at the same time, but they can be divided into different categories and then distributed to other layers, with different roles and responsibilities to perform these functions respectively to achieve the protocol goals.
In this case, these different components/layers can be combined to achieve various goals. Just like playing with Lego, it provides greater flexibility and portability, and allows developers to optimize various blockchain components to eventually create a complete system. They only need to determine the security of the "qualification of the outsourced manufacturer" to launch a new blockchain, just like the current 2nd layer solution.
Let’s take Rollups as an example.
They are a common type of modular blockchain. Rollups process transactions (transactions) and delegate consensus, data availability, and settlement to their parent chain.
Ethereum was the first to start the transition to a sharded modular blockchain structure. The chain is divided into multiple sub-chains, each responsible for a portion of the network activity. These shards can now decide whether to process transactions or store data.
Benefits of Monolithic Blockchains: Monolithic blockchains can enforce secure transactions on their own nodes. They are easily identifiable and easier to implement and design.
Benefits of modular blockchain: Can increase scale, easy to design, faster to launch, modular blockchain systems may include modular chains that focus on security and data availability, while others focus on execution.
We still have to solve the scalability trilemma. As we’ve discussed before, blockchain can only choose two out of three: scalability, decentralization, and security.
We use three groups to describe this. A, B, and C are the organizations respectively.
We in Team A have high tps chains like Sol and BSC that sacrifice decentralization. In Team B we have chains like Cosmos that sacrifice security, and in Team C we have chains like Bitcoin and Ethereum that focus on decentralization and security and therefore lose scalability. They make sacrifices one way or another.
In fact, these are all products brought about by the previous rounds of bull markets. The development of blockchain is inseparable from innovation. There is a lot of connotation here! !
We can implement all of these factors in a blockchain using a modular approach. Generally speaking, in a monolithic blockchain design, all four tasks are performed on the same layer, which can be inefficient as the chain scales. With a modular blockchain, each task can be performed exclusively by one layer, while the rest are offloaded to other layers.
In order to allow each layer to focus on their specific tasks and better achieve their goals, many protocols will make incentive policies, and then there is no need to make certain concessions to adapt to the limitations of the overall blockchain.
Let’s explain this with the Ethereum network. In a monolithic blockchain, there is only one blockchain going on in a blockchain. Also, all validators validate that single chain. In the Ethereum protocol, there is a huge pool of validators, probably around 30,000.
Users can use a pool of validators and distribute it as they get shards. As we get shards, we can actually distribute these validators across many shards instead of having all validators validating a single monolithic blockchain. So instead of having 300,000 validators validating a single chain, we can have 5,000 validators validating a single shard and then add more and more shards.
This will increase the amount of block space available to L1 while maintaining decentralization. So the data layer is a history/storage layer that contains everything that is computed. The rollups will then use these shards as information storage and solve them.
The more validators you have, the more capital you have to protect the blockchain, but the more validators you have, the more shards you can create, which adds more block space and creates a lot of scale on L2.
The only way out of the scalability dilemma is decentralization.
If you only optimize for scalability, you will end up doing what many alternative layers do, increasing hardware and node requirements, assuming you reduce the number of network participants and thus lose decentralization, which is a double-edged sword. If your computer is slow, you will fall behind.
For example, zk, op, etc. are all examples of modular blockchains, and they have always been hot topics. Celestia mentioned in the last issue is another example, which focuses on the data availability layer.
Monolithic chains include the leading BTC, Sol, and Ethereum 1.0 (before the upgrade)
At the end of the day, both monolithic and modular are valid in their own right. So, developers must decide which approach is best suited. For example, a DeFi application may prioritize security and therefore choose a monolithic design to provide a stronger security posture. However, if the same application were to prioritize throughput and execution speed, a modular design might be best suited for its use case. This shows that both designs have their purpose.
Finally, we have to return to our wallets. When choosing a public chain in the future, don’t choose a big and comprehensive one. On the contrary, it is difficult to grow big with a big and comprehensive one. The public chain should look for niche areas and specialize in them. As the saying goes, "We don't produce water, we are just nature's porters." You can become the richest man by selling water. At this point, I have to say goodbye again. There are not many pictures in this issue, and there are no wrong pictures. Respect! ! ! !
Competition between Monolithic Blockchain and Monolithic Blockchain — World Aggregation
