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The main technical revolution of the past decade and perhaps the most important one is blockchain. Everyone who has encountered cryptocurrency in one way or another knows this name. However, few people know what blockchain is and why this technology has gained such trust from the global community.
Today we will break down what blockchain is, what its features are, and tell you about the top 10 most popular blockchains for 2023.
Blockchain technology
Blockchain has been able to make digital assets decentralized, that is, independent of anyone. Blockchain is a database that has been able to ensure the safety and transparency of transmitted data for all users of the network. In essence, it is a transaction ledger that is duplicated and distributed among all members of a network of computer systems on the blockchain. Each block in this chain stores a number of transactions, and if a new transaction enters the blockchain, a record of that transaction enters the ledger of each member. To get a new block into the blockchain, a unique cryptographic key is computed for it based on previous blocks in the blockchain. Therefore, it is virtually impossible to forge such a key.
Key features of blockchain platforms
Each blockchain platform has the following characteristics:
1. Consensus Mechanism: All participants agree on the validity of the transaction to make it valid.
2. Origin: All participants can track the origin and ownership of an asset.
3. Immutability: No one can interfere with the transaction once it hits the registry.
4. finality: There is only one general ledger as the source of truth for asset ownership or transaction completion.
The most in-demand blockchains for 2023
Today we have many blockchains on the market that are created for their specific purposes. In this top, we've collected the most in-demand ones today.
1)Ethereum
Ethereum is the most popular decentralized blockchain platform for Web3 and open-source decentralized applications (dApps), which offers interaction with the Ethereum network through smart contracts. The purpose of smart contracts is to make and manage transactions without a trusted person. The Ethereum platform supports various use cases related to DeFi, cryptocurrency exchanges, wallets and NFT.
The biggest problems for Ethereum are scalability issues and transaction fees, also called gas fees. However, despite all these shortcomings, Ethereum is still the undisputed leader for decentralized applications and will continue to be so during 2023. On September 15, 2022 Ethereum moved to a new consensus algorithm Proof-of-Stake, which caused a lot of questions from the cryptocurrency community, but the idea of this transition was to provide more energy-efficient transactions.
Blockchain development plans
The developers are now aptly working on a sharding mechanism that will expand storage, scale and reduce network charges. It is expected to be phased in in 2023 and fully supported in 2024.
Key features.
● The most popular blockchain for DeFi
● Created specifically for decentralized applications
● Recognized leader among blockchains
Disadvantages of blockchain
● Slow transaction processing
● High gas fees
2)Binance Smart Chain (BSC).
The second line in our top is Binance Smart Chain. BSC is a decentralized public blockchain that hosts a network where users can create applications, exchange ideas, and make transactions. The development of BSC has created a number of new decentralized financial instruments. Just like Ethereum, BSC is designed for dApps applications, and at first glance, it may seem like there is no difference between the two. One of the most significant differences is the consensus mechanism, which is a hybrid of Proof-of-Authority and Delegated-Proof-of-State algorithms. This algorithm leads to cheaper and faster transactions on this blockchain platform.
How does the BSC blockchain work?
Blockchain operates on the Binance network, but asset transfers between platforms are not possible because the wallet formats themselves are different. Thus, users benefit from both worlds: the functionality of BSC smart contracts and the high throughput of Binance chain transactions. However, there is the flip side of the coin in that BSC is actually regulated by Binance, and therefore less secure compared to Ethereum. One major advantage and at the same time disadvantage is the compatibility of BSC with the Ethereum network, which allows access to Ethereum-based dApps.
Advantages of blockchain
● Inexpensive transactions
Faster transactions
● A recognized leader among blockchains
Disadvantages of blockchain
● Dependence on Ethereum
● Centralization by Binance
● Security
3)TRON
An honorable third on the list is TRON. It is a decentralized open-source blockchain platform whose main goal is the development of the global digital entertainment industry. This blockchain aims to achieve two critical priorities: decentralization and reduced content delivery time. TRON is supported by a smart contract protocol and uses the Delegated-Proof-of-State (DPoS) consensus mechanism. This protocol provides storage and payment development capabilities for digital platforms such as online gaming, phone applications or social media.
TRON features
The blockchain architecture contains 3 layers: storage, management and applications. The storage layer is used to host blockchain information. The management layer contains smart contract, account management and consensus modules. TRON's throughput is much better than its top-tier predecessors. TRON is also highly scalable, which helps developers when deploying applications.
Blockchain benefits
● High degree of scalability
● High transaction speeds
Zero or minimal fees
Disadvantages of blockchain
● Still under development
4)Polygon
Polygon is a second-tier blockchain based on Ethereum. Polygon has firmly established itself as the most promising project in the Ethereum scalability problem. Polygon blockchain works on the Proof-of-Stake consensus mechanism, just like Ethereum. This blockchain allows the use of Ethereum smart contracts using its Polygon network. Thus, the network helps provide a platform where developers can create dApps with improved speeds, better scalability and enhanced security. Despite the development of Ethereum 2.0 predicting the death of Polygon, Ethereum transaction fees have remained unchanged, meaning that Polygon is still an efficient solution.
How do Layer 2 blockchains work?
Taking Ethereum as an example, the network freezes a certain amount of assets. They are then sent to Polygon, and various transactions and transfers are made there with virtually no fees. Your transaction hashes are written into the system, merged with other hashes and every few blocks they are sent back to the first layer blockchain (Ethereum) in one batch and written into blocks.
Blockchain advantages
● High transaction speeds
● Polygon remains efficient for scaling
● Low gas fees
Disadvantages of blockchain
● Dependence on Ethereum
● High competition in Ethereum scalability task
5)Avalanche.
Avalanche is a blockchain network with PoS smart contract functionality. It is a cheaper and more productive platform for decentralized applications (dApps) than the current market leader Ethereum. Avalanche has a peer-to-peer payment system that has proven to be fast, secure and scalable in the DeFi space.
Features of Avalanche
1. Avalanche has three blockchains that handle different tasks. By splitting the work between the blockchains, Avalanche is much faster than Ethereum. It can perform more than 4,500 transactions per second and complete a transaction in less than two seconds.
2 Thanks to Avalanche, you have the ability to create your own blockchains running on its network.
3. Full compatibility with Ethereum.
How does the Avalanche blockchain work?
As I mentioned earlier, Avalanche uses three built-in blockchains that perform different tasks. Let's understand what they are:
● X-Chain: The blockchain allows you to create new assets, exchange between assets, and transfer across the subnetwork. Transaction fees on the X-Chain are paid with AVAX.
● P-Chain: A metadata platform that coordinates Avalanche validators. It also enables the creation of new subnets, allowing developers to create their own blockchains.
● C-Chain: A blockchain that enables the creation of smart contracts. It uses the Ethereum virtual machine based on Avalanche.
Avalanche benefits
● High speed and scalability for DApps
● Throughput is high and efficient without the risk of decentralization
● High trading volume with over 4,500 transactions per second
● Compatibility with Ethereum
Disadvantages of Avalanche
● Transactions can be delayed if validators do not agree on the status
● Depends on Ethereum
6)Optimism.
Another solution to the scalability problem has made Optimism, which just like Polygon, is a Layer 2 blockchain that runs on top of the main Ethereum network. It was first revealed in June 2019, and Optimism's open core network was launched in December 2021. Optimism has an "optimistic rollup" mechanism to solve Ethereum's scalability problem.
How does Optimism's blockchain work?
Optimistic rollup operators aggregate multiple off-chain transactions together into large packets before being sent to Ethereum. This approach spreads fixed costs over multiple transactions in each batch, reducing the commission for end users. Optimistic convolutions also use compression techniques to reduce the amount of data published to Ethereum.
When a transaction is initiated at the secondary layer, it is immediately processed and included in the transaction batch. The packet is then validated using a smart contract in the primary chain, which acts as a form of security. If the smart contract determines that the transaction is valid, it is included in the block and added to the main chain. If the transaction is invalid, it is rolled back and user funds are returned.
Advantages of Optimism
● Decentralized and unreliable
● High computational flexibility
● Good scalability for Ethereum
Disadvantages of Optimism
● Lower throughput than other Tier 2 solutions
● High competition among other Ethereum solutions
7)Solana
Solana is a high-performance blockchain that supports smart contracts and dApps. It uses Proof-of-stake as a consensus mechanism. Solana also uses timestamped transactions to maximize efficiency. This allows Solana to process 50-65,000 transactions per second. While other similar blockchains are Tier 2 blockchains, Solana is a Tier 1 blockchain and does not delegate transactions to other attached Tier 2 chains.
How does the Solana blockchain work?
Solana uses the Proof-of-History component of the Proof-of-Stake consensus. It includes timestamped transactions when they are added to a Solana blockchain. Solana generates a new block every 400ms (compared to 15 seconds for Ethereum). Solana distributes its tasks to different nodes on the network as needed to optimize speed, and all transactions are timestamped to ensure that they are correct.
Benefits of Solana
● Solana has some of the highest transaction speeds
● Small fees
Large support from investors
Disadvantages of Solana
● Decentralization issues: Solana runs on the Proof-of-Stake consensus mechanism, which has been criticized for being less decentralized than Proof-of-Work.
● Scalability issues: Despite Solana's high transaction processing speed, scalability is still an issue as the number of users and transactions on the network continues to grow.
8)Cronos.
Cronos is the first blockchain network that works with the Ethereum and Cosmos ecosystems, supporting DeFi, NFT and Metaverse. The Cronos chain operates in parallel with the Crypto.org chain, which is a fully decentralized open-source blockchain with high transaction speeds and low fees.
How does the Cronos blockchain work?
Cronos is a sidechain running on Ethermint, a high-speed proof-of-stake blockchain built on the Cosmos SDK, which is compatible with EVM (Ethereum Virtual Machine). It aims to globally scale the Web3 user community, giving developers rapid porting of applications, smart contracts and assets from Ethereum and EVM-compatible chains.
Cronos uses Proof of Authority (PoA), a greener, more optimized and scalable consensus protocol protected by validators. It is faster than other consensus algorithms and more scalable.
Advantages
● Scalability: With its high performance and ability to handle thousands of transactions per second, Cronos can support large-scale projects and applications.
● Decentralization
Compatibility: Blockchain is designed to be compatible with other platforms, making it easy for developers to create dApps and other services.
● Speed: Transactions on the Cronos network are processed quickly, ensuring efficient transfer of assets and data.
Disadvantages
● Lack of adoption: Although the platform has the support of the community, it is not yet widespread and may face problems in competing with established platforms.
● Regulatory risks: Decentralized blockchains, such as Cronos, could face regulatory challenges that could affect their growth and adoption.
● Competition: In a crowded marketplace, Cronos could face competition from other blockchains and decentralized platforms, which could affect its growth and success.
9)Kava.
Kava is a decentralized blockchain that combines the interoperability of Cosmos with the development speed of Ethereum smart contracts. Kava is an open-source project and its development is driven by a growing community of developers, users and supporters. It is built on the Cosmos network and runs on the Inter-Blockchain Communication (IBC) protocol, which allows it to connect to other Cosmos-based chains and seamlessly transfer assets.
How does the Kava blockchain work?
In Kava, the platform is controlled by a system of validators, which are responsible for verifying transactions and maintaining the security of the network.
Kava uses a unique consensus mechanism called Delegated-Proof-of-Stake (DPoS), which is a modified version of the traditional share confirmation mechanism (PoS). In this mechanism, users can delegate their tokens to validators, who use them to protect the network and verify transactions. In return, validators are paid for their work, which helps maintain the security and reliability of the network.
Benefits
● Scalability: Kava uses a delegated proof-of-stake consensus mechanism, which is known to be faster and more scalable than other consensus methods.
● Support for Decentralized Finance (DeFi): Kava has a strong focus on DeFi and provides a wide range of DeFi services, including lending, borrowing, and growing crops.
● Kava is a community-driven development
Disadvantages
● Newer technology: Kava is a relatively new blockchain and there are growth and technical issues to solve.
● Competition among DeFi projects
● Limited adoption: Kava is still in the early stages of adoption, and it may take time for it to gain widespread adoption and acceptance in the broader cryptocurrency community.
10)Klaytn
Klaytn is a fast and efficient blockchain platform that allows you to develop decentralized applications. It is designed to provide seamless and convenient interaction for both developers and users.
How does Klaytn blockchain work?
Klaytn works using a consensus mechanism known as the BFT (Byzantine Fault Tolerance) algorithm. This mechanism ensures that transactions are verified and written to the blockchain in a secure and efficient manner. This consensus mechanism selects validators to verify transactions and add them to the blockchain.
Klaytn uses a unique combination of built-in and standalone components to support its high performance and scalability. The platform's networked components are responsible for handling core functions such as consensus, token management and smart contract execution, while the standalone components manage things like data storage and network connectivity.
Advantages
● Scalability: Klaytn is designed to handle large numbers of transactions per second, making it suitable for mass deployment.
● Decentralization
● High security
Disadvantages
Limited implementation compared to other platforms
● Regulation: Blockchain technology and cryptocurrencies are still subject to regulatory uncertainty in many countries, which can affect the growth and development of Klaytn.
● Cost of use is higher than other blockchains
What types of blockchains are there?
1. Public blockchains: decentralized, open networks where anyone can participate and access registry data.
2. Private blockchains: centralized networks with limited access and corporate solutions.
3. consortium blockchain: a network managed by multiple entities.
4. Hybrid blockchains: flexible networks that can be customized.
Which blockchain is best for creating smart contracts?
The answer depends on your needs and resources. Every blockchain offers smart contracts functionality. Ethereum is considered the most common platform for creating smart contracts. However, Ethereum has its drawbacks, such as high fees and scalability issues, so choose blockchains that will work together with the Ethereum network, solving all of its drawbacks. That way you can access most decentralized applications.
Bottom line
As we've mentioned many times, each blockchain is designed for its own purpose and provides different needs in the marketplace. Our top were both centralized and decentralized, but neither has any fixed boundaries between networks. Today, many are considering a hybrid blockchain. However, it is not yet clear how successful this solution will be.