A Brief Comparison Of Today's Top Blockchain Networks
What is blockchain? Blockchain is a shared, immutable ledger that facilitates the process of storing transactions and tracking assets in a network
It can also be understood as a growing list of transactional records referred to as a block that is linked together in several databases, known as the “chain,” in a network connected through peer-to-peer nodes.
This model has gained a lot of traction for its ability to take out the middleman, traditional methods for recording transactions and tracking assets in the hands of a central figure are made redundant, the blockchain architecture gives participants the ability to share a ledger that’s updated through peer-to-peer replication each time a transaction occurs.
The Key Characteristics of Blockchain networks are :
Consensus: Every transaction has to be cross-examined by all the participants before it is added as a block to the network
Provenance: Participants know where the asset came from and how its ownership has changed over time.
Immutability: The data stored is hashed so participants can change the value or record in a block.
We have witnessed a revolution in the adoption of this technology, first starting with the rise of Bitcoin as a digital currency, there has been a gradual evolution of this technology and blockchain networks to bring about greater usability of the solution in many areas of our lives, let us track the metamorphosis of blockchain networks and some of their key individual features
Bitcoin
Bitcoin is the digital currency founded by the mysterious Satoshi Nakamoto, he referred to it as “a new electronic cash system that’s fully peer-to-peer, with no trusted third party.” It offers the promise of lower transaction fees than traditional online payment mechanisms, all bitcoin transactions are verified by a massive amount of computing power by a method called Proof of work together to prevent anyone from gaming the system. As the first successful cryptocurrency, Bitcoin has inspired a whole lot of other cryptocurrencies known as Altcoins. Bitcoin is commonly abbreviated as “BTC.”
Key Features
- Use of peer to peer technology
- Uses Proof-of-work validation on transactions
Pros
- It is the most widely accepted cryptocurrency and hence has the largest userbase
- A high degree of anonymity
Cons
- It has a slow transaction time, with a block time of 10 minutes, which has hindered it from being adopted for high-speed transactions
- The high energy requirement for mining bitcoins has been an issue of criticism
Ethereum
With the success of bitcoin, a wide vista of opportunities was opened up to harness the blockchain concept. Ethereum was the first successful blockchain network to facilitate immutable, programmatic contracts, this contracts also called smart contracts are computer codes that can be integrated into the blockchain to facilitate, verify, or negotiate a contract agreement. Ethereum is coupled together with Solidity, its own native programming language which runs on a blockchain, enabling developers to build and run distributed applications or decentralized applications (dapps), this program is powered via its own currency called the Ether (ETH) which serves as “gas” for transactions
Key Features
Designed as an open-source blockchain platform that hosts business, financial services, and other decentralized applications.
Ethereum users pay fees called “gas” to use dapps.
Its cryptocurrency is now second only to Bitcoin in market value.
Pros
- Ethereum comes with a Turing complete language on the blockchain, so the platform can run complex contracts on the network without any third-party services.
- Has a faster block time compared to Bitcoin
Cons
- As Ethereum is a platform, it combines several features like being a ledger, smart contract generator, etc. In other words, it is not optimized for one use case.
- Unpredictable transaction fees
Binance Smart Chain (BSC)
With the rise in cryptocurrency trading, the Binance platform founded in 2017 arose as one of the most popular trading platforms, it has its own custom token is known as the BNB built on the Binance Chain network. The Binance Smart Chain was built in parallel with the Binance chain, it was designed with the purpose of leaving the high throughput of the Binance Chain intact while introducing smart contracts into its ecosystem. BSC boasts smart contract functionality and compatibility with the Ethereum Virtual Machine (EVM)i.e. the runtime environment for smart contracts in Ethereum.
Key Features
Binance Smart Chain also uses the Ethereum Virtual Machine (EVM), which allows it to run Ethereum-based applications like MetaMask
It runs in parallel with the Binance chain (BC) which allows users to get the best of both worlds: the high transaction capacity of BC and the smart contract functionality of BSC.
The platform runs on a consensus model known as the proof-of-stake (Pos), it runs a unique type called proof-of-staked-authority. Its PoS model makes processing transactions faster, putting it above networks that just implement Proof-of-work models.
Pros
- It is Ethereum Virtual Machine (EVM) compatible
- Low transaction fees and Block time(~3 seconds)
- Binance Smart Chain utilizes a stronger validation method, it uses a hybrid of delegated Proof of Stake and Proof of Authority which it calls “Proof of Staked Authority”
Cons
- BSC is largely centralized
- Small Developer Ecosystem
Polygon
Polygon formerly known as the MATIC network is a protocol and a framework for building and connecting Ethereum-compatible blockchain networks, it has narrowed some of the major challenges faced by the more popular blockchains, challenges as high gas fees, scalability poor user experience, etc. Because of the various weakness of various networks, many break off to start networks that address those issues which leads to ecosystem fragmentation, Polygon solves this problem by being built on the Ethereum platform it connects the other Ethereum compatible networks forming a multichain network.
Key Features
It combines the best of Ethereum and sovereign blockchains into an attractive feature set.
Polygon is a lot less expensive and quicker than other networks.
Pros
- It is Ethereum Virtual Machine (EVM) compatible
- Low transaction fees and fast transactional speed of approximately 65,000 transactions per second (TPS)
- Polygon is built to scale as user volume increases, which means that in theory it can be used for mass adoption.
Cons
- High competitions arising from other scaling solutions
Fantom Opera Network
Fantom is a fast, high-throughput open-source-directed acyclic graph (DAG) smart contract platform built to solve most of the traditional limitations of the older generation blockchains while still being compatible with Ethereum Virtual Machine for building decentralized applications.
It uses the novel Asynchronous Byzantine Fault Tolerance (aBFT) algorithm to achieve consensus, it solves the blockchain Scalability Trilemma, problems with most of the other networks, that tradeoff one of these features Decentralization, Security, Scalability, this makes it to bring several benefits to the blockchain community.
Key Features
EVM compatibility and Solidity compiler support
Uses the Asynchronous Byzantine Fault Tolerance (aBFT), an algorithm with a directed acyclic graph (DAG) consensus
Fantom has a friendly developer community complete with development tools
Pros
- Its leaderless Proof-of-stake consensus ensures that the system is properly decentralized by removing trusted leaders.
- Speed and Scalability while using the aBFT consensus algorithm.
Cons
- ERC-20 token used by the Fathom network only works with its FTM wallet, it is not compatible with other wallets
Solana
Solana is another innovative blockchain solution that leverages several breakthrough concepts to bring about a high-speed network, which currently supports 50,000 TPS (Transactions per second) and 400ms Block Times. It uses the novel Proof of History and several other innovations to allow the network to scale efficiently.
Key Features
Solana’s Proof of History (PoH) consensus algorithm helps to create more efficient and higher throughput rates within the network.
It uses Tower BFT, a PBFT-like consensus algorithm that is made to make use of the synchronized clock.
It uses the Turbine protocol, a block propagation protocol designed to make it easier to transmit data to the blockchain nodes.
- Gulf Stream; Mempool-less transaction forwarding protocol
- Sealevel; Parallel smart contracts run-time
- Pipeline; a Transaction Processing Unit for validation optimization
- Cloudbreak; Horizontally-Scaled Accounts Database
- Archivers; Distributed ledger storage
Pros
- Uber fast system able to support an upper bound of 710,000 TPS on a standard gigabit network and 28.4 million TPS on a 40-gigabit network.
- Ultralow transaction fees are estimated at $10 for a $1 million transaction
- With its Sealevel technology, a parallel runtime smart contracts feature, the network can process tens of thousands of contracts in parallel.
Cons
- Many of their key features still await implementation on their Mainnet Beta.
- We can examine the different blockchain networks, they all come with their individual strengths and features. Armed with the knowledge of the right network one can use to solve or build a particular solution, we can expect to better use cases that incorporate blockchain technology.
