Modular Blockchain is considered a new trend in the Blockchain industry. So what specifically is Modular? What projects stand out? Let’s find out about Learn Crypto Trading in the article below!
Learn about blockchain
Before diving deeper into Modular, let’s Learn about blockchain with basic knowledge first.
What is Blockchain?
Blockchain or blockchain technology is understood as a technology that helps encode data into many different blocks. The following block is linked to the previous block using a cryptographic hash function forming a long chain. The data are consistent with each other. You cannot delete or change them without network consensus. This operating mechanism helps increase the transparency and safety of the system.
Characteristics of Blockchain
The Blockchain system has the following basic characteristics:
– Distributed: Data is stored in many nodes of the network. Each master node is a full copy of the entire blockchain.
– Highly secure Blockchain.
– Public and private: This concept’s network is public in that anyone can view and verify data on the system but cannot change it. Privacy means that no one can view personal information and history without authentication.
– Direct transactions without intermediaries: You can directly make transactions without going through any intermediaries.
– Smart Contracts: Smart contracts are programs that automate and enforce contract terms. Thanks to smart contracts, dependence on intermediaries is minimized. The automatic program also helps save time and costs for users.
Currently, it can be said that Blockchain technology has “crept” into many areas of socio-economic life such as applications in electronic games, in the fields of finance, medicine, and health care. health, commodity supply chain, or agriculture… And most of all, applications for trading electronic currencies.
See more: Blockchain meaning? Things to know for newbies
The core nature of Blockchain UK
The core nature of Blockchain UK is expressed in the following contents:
– Consensus: Consensus includes the mechanisms used to reach agreement on a single data value or network state among the machines in the system.
Data Availability: Data availability helps ensure that transaction data is available for everyone to use.
– Execution: Execution is when network nodes perform transactions, thereby maintaining and developing the state of the Blockchain system.
Knowledge about Modular Blockchain
After learning about the general knowledge about Blockchain, let’s learn about Modular Blockchain in detail.
What is Modular Blockchain?
Modular Blockchain is a technology solution that helps separate tasks in the Blockchain network into many different parts. Each job will be undertaken by different Blockchains or off-chain entities.
Each job here is part of the network’s architecture. Blockchain architecture includes 4 main layers. Including Execution (execution), Settlement (resolution), Consensus (consensus), and Data Availability (data availability).
Execution (execution)
Execution calculates transactions and produces results based on pre-set logic. The execution process causes the state of the Blockchain to change and creates a new state. This new state will then also be processed by the system and cannot be changed.
Settlement (resolve)
Settlement or validation class. This layer of verification helps resolve possible disputes during system operation.
Consensus (consensus)
Consensus or the consensus layer plays a role in helping to agree on a final state. To operate this consensus layer, many different algorithms are needed. That is: Proof of Work, Proof of Stake, or Proof of History…
After the consensus process takes place, the network will update a new status.
Data Availability
Data availability or Data Availability is the ability of data to access information. Data in the system must always be available for anyone to access and use.
Data in the network must always be available for everyone to easily access and use.
Modular division of work helps create specialization for classes. At the same time, this also increases transaction speed as well as network scalability.
Classification of Modular Technology Blockchain
Based on the level of modularity, Modular Blockchain is classified as follows:
Regular Rollup
Regular Rollup is the most popular type of Modular Blockchain. In this type, the implementation layer is separated into many separate threads. This layer performs calculations and then sends data to Blockchain Layer 1 for authentication and then storage.
Some typical projects of this type are Arbitrum, Optimism, zkSync, Starknet…
Sovereign Rollup
Sovereign Rollup is also known as an autonomous rollup. This is a Modular model that uses a different Blockchain for the consensus mechanism as well as data storage. Meanwhile, Blockchain itself is responsible for executing and authenticating transactions.
A typical example of this type of Modular Blockchain is Sovereign.
Settlement Rollup
Compared to Sovereign Rollup, Settlement Rollup is different in that the modules continue to be further separated. The execution layer will be handled by a Rollup Blockchain. The Settlement layer is handled by another Blockchain. Finally, the Consensus and DA layers are also taken care of by another Blockchain.
Dividing the layers will help increase flexibility as well as take advantage of the unique strengths of each Blockchain at each layer. However, dividing the work undertaken by many Blockchains also makes the system dependent on many places. This makes the security and decentralization of the system shared. Besides, combining multiple Blockchains together is also a big technological challenge.
A typical project of this type is Eclipse.
Validity
The next variant of Modular Blockchain is Validium. This type is similar to Regular Rollup but has a slight difference. The difference is that the DA layer is separate and stored off-chain, not on the original Blockchain. This helps reduce operating costs while increasing system scalability. However, the security of this type depends on the storage unit.
How necessary is Modular Blockchain?
Why is it necessary to move forward with Modular Blockchain? The first reason is because Modular Blockchain separates the network into many parts and many different jobs. This helps increase the work efficiency and transaction speed of the network.
In addition, Modular uses a PoS security mechanism. Thanks to this, users can stake their assets and participate in the network management process. Thereby increasing security while increasing the intrinsic value of the token. Besides, it also reduces maintenance and replacement costs for the system.
Finally, when the network is divided into many small parts, it is also the basis for increasing the scalability of Blockchain later. This operating mechanism allows the system to redistribute security at many different nodes instead of just one chain.
See more: Open Bybit account: Explore the world of Crypto
Some outstanding Modular Technology Blockchain projects
Some prominent Modular Technology Blockchain projects include Ethereum 2.0, Celestia, Polygon Avail, Arbitrum, and Optimism.
Ethereum 2.0: Ethereum is one of the first Blockchains. Later, it was upgraded to Ethereum 2.0 to increase scalability. Ethereum 2.0 uses the Proof of Stake model and takes advantage of the advantages of Modular to increase the security and performance of the network. One of the typical projects built on the Ethereum platform is XFI. As for XFI Blockchain, please refer to another article on the page.
Celestia: Celestia is also a good example of Modular Blockchain. This project builds a highly scalable data availability layer.
Polygon Avail: Polygon Avail is also a Blockchain that serves the Data Availability layer. This project stores data using a separate Blockchain.
Arbitrum and Optimism: These two projects both use Rollup to increase efficiency and scalability as well as reduce transaction costs. They use Modular Blockchain to split the work and execute it off-chain on Ethereum before moving it to the main chain.
Conclude
Above is the necessary information about Modular Blockchain. In addition, don’t forget to regularly visit Learn Crypto Trading to update more useful knowledge.
FAQs:
What tokens does Modular Blockchain include?
Modular tokens include MATIC, ARB, OP, TIA, OSMO, MANTA, DYM, CHR, POND, ELX, …
Should you invest in Modular Blockchain projects in the short or long term?
Modular projects are quite new, and the testing period is quite long, so they are suitable for long-term investment.
How much is the investment cost of a Modular project?
Depending on each Modular project, the investment cost will vary, from only a few dollars. Therefore, depending on each person’s needs and assessments, you invest the most reasonable amount of money.
