In the evolving digital era, as everything is getting digitized, blockchain technology has remained the cornerstone of promoting a secure way of investing and transacting digital assets. The value of crypto has grown exponentially since its inception in 2009 and the rise in popularity started to open doors to the need for technological innovations and development.
Modular blockchain is a shift from the traditional monolithic blockchain which has increased the technology’s efficiency in solving the issues related to flexibility and scalability. The article is a guide on modular blockchain that is revolutionizing the crypto space.
What Is Modular Blockchain?
Modular Blockchain is a blockchain architecture that divides the components of the technology into different layers or modules. Each of these modules has different functions which were once carried out altogether in the monolithic blockchain architecture having many issues related to this structure including carrying out more transactions per second. There are different layers set for the technology’s consensus, execution, and data availability. Each of these layers functions independently to provide better efficiency, scalability, and flexibility to the blockchain. The cause of such an innovation itself is to resolve the scalability issue monolithic blockchain technology had along with a more secure and affordable system.
Modules In The Blockchain Architecture
Rather than carrying out all the functions as a single blockchain, a modular blockchain splits the technology’s architecture into different modules with varying functions. These modules carry out different elements in the blockchain operations which carry out different labor. Previously all the layers’ functions were carried out together.
The following are the important modules or layers in the blockchain architecture with their function.
Consensus Layer
The consensus mechanism is a protocol that ensures the distributed agreement across nodes about the ledger’s state, which emphasizes the security and integrity of the blockchain. The consensus layer in the modular blockchain architecture enables the separation of this mechanism into further types that can work on specific needs like the Proof-of-Work or the Proof-of-Stake.
Data Availability Layer
The data availability layer ensures the storage and maintenance of data in a blockchain. Data is made available instantly to all network participants. As this layer also functions separately, data retrieval and storage optimization are more flexible. The data availability layer improves the speed without an increase in cost as the storage and maintenance of data in this layer will not affect other functions of the blockchain.
Execution Layer
It is in the execution layer that the actual transactions and trading takes place in a blockchain. The transaction processing and execution of smart contracts are done within this layer and as it functions as a separate module, it can process large amounts of transactions without delaying the whole blockchain. Processing large transactions was previously lagging and costly in a monolithic blockchain.
Settlement Layer
This layer verifies the final transactions and resolves disputes. It enables finality and security in blockchain processes. The settlement layer in a modular blockchain specializes in ensuring the settlement of the activities done in a blockchain. This is an optional layer.
Advantages Of Modular Blockchains
Modular blockchain brings several significant advantages to the crypto space: They are
Scalability
The division of tasks in modular blockchains ensures much more scalability than in traditional monolithic blockchains. As the popularity of blockchain networks increased, more traffic was driven leading to an increase in transactions. Each of the modules functions in separate tasks which can reduce network congestion. The increased scalability reduced transaction costs and increased transaction speed.
Affordability
As modular blockchains can carry out a lot more transactions than monolithic blockchains, the transaction costs are also reduced. The technology is much more efficient than the previous blockchain architecture, in that it reduces the overall cost and provides better features.
Flexibility
Decentralized applications can be easily incorporated across multiple platforms. Modular blockchains also enable faster development and the creation of new blockchain and web3 solutions. It is also flexible for newer innovations and lets developers experiment with new ideas.
Faster Transactions
As scalability increases, the transaction speed also increases along with a more number of transactions carried out. Higher transaction cost with less numbers of transactions was a major issue faced by monolithic blockchain.
Security
Each layers function differently and hence these can also be secured separately. This increases the security of the blockchain. Each module can be tested and assessed separately to further enhance the security of blockchains.
Also Read: The Importance Of An Immutable Blockchain
Conclusion: The Future of Blockchain Technology
One of the major issues faced by blockchain technology was scalability and higher transaction costs. With the emergence of modular blockchain architecture many of the issues have been addressed. The traditional blockchain architecture couldn’t carry out a large number of transactions quickly and also was costlier making it not suitable for daily payments. This innovation lets the actual intention of the creation of cryptocurrency, named the first crypto, Bitcoin, by its inventor be made possible as a tool for easy daily transactions to be carried out. The technology is in its developing stage and needs much more testing and development done to make a revolutionary change in digital finances. However, there is no doubt that blockchain technology is getting better and better at addressing all the issues for the intended use of digital currency in the current digital world.
