Decentralisation is often considered to be the key stepping stone for web3 blockchain technologies and we’ll be exploring this in detail over the next few quarters. In the first article,

https://mirror.xyz/bouran.eth/zyE_V4XIGndYxmmoLiHkTM66GO36dkCMjwuOCsUOQA4

, we looked at how to define and measure decentralisation.

This time we will introduce four of the main blockchains - Ethereum, Polkadot, Avalanche, and Solana - and dive into the differential elements of how they work.

The chain which today has the highest total value locked (TVL) was first conceived in 2013 by Vitalik Buterin. Development started in 2014, was crowdfunded by an Initial Coin Offering (ICO), and went live on July 30th, 2015.

Ethereum allows decentralised applications (DApps) to be built and for different token types to be deployed, for example, the ERC-20 standard is used for cryptocurrencies (fungible tokens) and ERC-721 for NFTs.

The Ethereum Virtual Machine (EVM) is one of the most broadly used elements of the network. It’s a software framework that executes smart contract bytecode from programming languages such as Solidity and integrates this into each node. The EVM’s purpose is to figure out what the state will be for each block, so that the network can be used as both a distributed ledger and for users to interact with smart contracts.

The network has just transitioned from a Proof-of-Work (PoW) consensus mechanism, where transactions are validated by computational power, to a Proof-of-Stake (PoS), which only requires validators to hold and stake tokens. This transition is known as ‘The Merge’ as the mainnet will be unified with the consensus layer, the Beacon Chain.

The swap to POS has been a long time coming, starting development in late 2019. It's one of the most crucial steps in the Ethereum 2.0 timeline, with the three main upgrades consisting of the Beacon Chain (live), The Merge (Sept 15 2022), and sharding (2023 ETA). We will be explaining these three upgrades in more detail in future articles.

While PoS is generally seen to have advantages such as being less energy intensive and better for implementing scaling solutions, there are also many misconceptions, such as the fact that it will reduce gas fees or make transactions faster.

Polkadot was founded by Gavin Wood, an Ethereum Co-founder, in late 2016. It was launched with an ICO in October 2017, raising $145 million in return for 50% of the token allocation. Two private sales were also later conducted in 2019 and the summer of 2020.

Polkadot has a central blockchain known as the ‘relay’ chain and many user-created parallel chains known as ‘parachains’. These are separate blockchains that connect to, and are interoperable with, the Polkadot relay chain and all other parachains. The network uses PoS with all validators staked on the relay chain. This means that all parachains share the security of the relay chain, which is a huge benefit to new projects who might otherwise have a low number of validators and be vulnerable to attack.

The network utilises the ‘Blind Assignment for Blockchain Extension’ (BABE) protocol for building the chain's blocks, such as ensuring that blocks have a consistent creation time and an assigned block author. It is derived from the Ouroboros consensus protocol, which was adapted by Gavin Wood, and is being developed by the Web3 Foundation and Parity Technologies.

The relay chain also provides interconnectivity with cross-consensus messaging known as XCM. It enables the parachains to securely exchange information and perform transactions without needing a trusted third party. This allows transfers of data or assets between different blockchains, and for cross-chain D’Apps to be built. It can be done without the need for a bridge which could potentially be unsecured and therefore liable to exploits. The interoperability and scalability this provides to projects will likely become increasingly important.

Teams can gain a slot to build a parachain by taking part in an auction, or from the Web3 Foundation allocating a slot to a project it believes will benefit the network. The permissionless auctions allow users to vote on which projects get priority with teams bidding for a slot. Users contribute by locking up their DOT tokens and teams then reward contributors. This system is popular with a lot of teams as it does not require a significant upfront cost for bidding and also means they will have strong support from launch if they win.

Polkadot's approach to governance is one of its core strengths, and the parachain auctions are one of the best examples of this.

The Avalanche chain was first shared on the InterPlanetary File System, a decentralised peer-to-peer file sharing protocol, by a pseudonymous group ‘Team Rocket’ in early 2018. It was later developed by a dedicated team from Cornell University led by Emin Gün Sirer, a professor of computer science.

Following this Ava Labs was created to help develop the network, using some of the best talent from Wall Street. Avalanche's ICO ended in July 2020, followed by the launch of the mainnet and native token issuance, later that year in September.

The network uses PoS with the ‘Snowball’ consensus and is designed to be very scalable. No matter how many participants the network has, the number of consensus messages sent will remain the same, because a node will only query twenty other nodes. It operates in a way similar to random audits which ensures the chain is in agreement.

Avalanche’s network provides a stable base for projects to launch finance-based D’Apps and allows a core focus on an interoperable, scalable ecosystem. Unlike other networks, Avalanche does not run on just one chain. It’s a multi-chain network made up of the Platform Chain (P-Chain), Contract Chain (C-Chain), and Exchange Chain (X-Chain). The three chains all serve different purposes, but put together they act with the power of one network.

The P-Chain is the metadata chain and allows users to create subnets, monitor active subnets, and maintain validators. Each chain runs a slightly different consensus mechanism tweaked for the specific requirements. In this case, ‘Snowman’, is optimised for a high number of transactions per second (TPS) and smart contract applications.

The C-Chain is EVM compatible and allows users to create smart contracts, using a specific API.

The X-Chain acts as a decentralised platform for creating and trading tokenised assets, with specific rules attached that help to govern its activity. This is the chain that the AVAX native token is traded on.

Subnets are Avalanche’s biggest scaling solution. They are sovereign networks that define their own computer logic, determine their own fee structure, maintain their own state, and provide their own security. This allows users to create their own blockchain, utilise validators, and piggyback onto Avalanches consensus latency (the speed at which a transaction occurs).

Solana was first proposed in a white paper in November 2017 by Anatoly Yakovenko. In 2018 the Solana Labs team began searching for funding and raised $20 million in private token sales in 2019, with the first block created in March 2020.

It claims to be the fastest blockchain in the world with the most rapidly growing ecosystem. The network is highly scalable, theoretically reaching 710k TPS (transactions per second) and processing 2.7k on average. In comparison, Ethereum currently handles only ∼15, Polkadot 1.5k, and Avalanche 4.5k (without counting subnets). This makes Solana’s usage really cheap: at the time of the writing, a transaction only costs $0.00025.

The network uses Proof-of-History (PoH), a key tech element, which makes scalability possible. It’s an upgraded version of PoS with the ability to process more transactions without having to rely on layer 2 solutions or sharding.

PoH is based on time. Many blockchains, like Ethereum, use outside programs to define a timestamp to validate transactions in the correct order. But this is an issue as it takes up processing power, Solana solves this quite easily by just building these timestamps into the chain itself. Validators don’t then need to allocate much power towards verifying multiple times.

Block validation is done by using a Verifiable Delay Function (VDF), a function within its PoH protocol, which takes the input and generates an output that can be chained with cryptographic hashing. This enables a faster block verification time.

The VDF is used for tracking time whereas the PoH chain includes hashes of data that has been processed. This is a double-edged sword because while it can track history; this history can also be manipulated by changing when the hash occurred. The PoH chain can’t serve as a good source of randomness, a VDF without that data could produce more pure random.

·   ·   ·

The technology behind the four platforms we have looked at all function differently, with varying approaches to consensus mechanisms and block verification. They all aim to prioritise speed, cost, or scalability but to achieve this they have to sacrifice one. Maybe one day a chain will be able to achieve all three.

In the next article, we will introduce an Ethereum deep dive and explore its many quirks. We will also touch on significant events such as ‘The Merge’ and ‘Sharding’ upgrades.

Decentralisation is often considered to be the key stepping stone for web3 blockchain technologies and we’ll be exploring this in detail over the next few quarters. In the first article,

https://mirror.xyz/bouran.eth/zyE_V4XIGndYxmmoLiHkTM66GO36dkCMjwuOCsUOQA4

, we looked at how to define and measure decentralisation.

This time we will introduce four of the main blockchains - Ethereum, Polkadot, Avalanche, and Solana - and dive into the differential elements of how they work.

The chain which today has the highest total value locked (TVL) was first conceived in 2013 by Vitalik Buterin. Development started in 2014, was crowdfunded by an Initial Coin Offering (ICO), and went live on July 30th, 2015.

Ethereum allows decentralised applications (DApps) to be built and for different token types to be deployed, for example, the ERC-20 standard is used for cryptocurrencies (fungible tokens) and ERC-721 for NFTs.

The Ethereum Virtual Machine (EVM) is one of the most broadly used elements of the network. It’s a software framework that executes smart contract bytecode from programming languages such as Solidity and integrates this into each node. The EVM’s purpose is to figure out what the state will be for each block, so that the network can be used as both a distributed ledger and for users to interact with smart contracts.

The network has just transitioned from a Proof-of-Work (PoW) consensus mechanism, where transactions are validated by computational power, to a Proof-of-Stake (PoS), which only requires validators to hold and stake tokens. This transition is known as ‘The Merge’ as the mainnet will be unified with the consensus layer, the Beacon Chain.

The swap to POS has been a long time coming, starting development in late 2019. It's one of the most crucial steps in the Ethereum 2.0 timeline, with the three main upgrades consisting of the Beacon Chain (live), The Merge (Sept 15 2022), and sharding (2023 ETA). We will be explaining these three upgrades in more detail in future articles.

While PoS is generally seen to have advantages such as being less energy intensive and better for implementing scaling solutions, there are also many misconceptions, such as the fact that it will reduce gas fees or make transactions faster.

Polkadot was founded by Gavin Wood, an Ethereum Co-founder, in late 2016. It was launched with an ICO in October 2017, raising $145 million in return for 50% of the token allocation. Two private sales were also later conducted in 2019 and the summer of 2020.

Polkadot has a central blockchain known as the ‘relay’ chain and many user-created parallel chains known as ‘parachains’. These are separate blockchains that connect to, and are interoperable with, the Polkadot relay chain and all other parachains. The network uses PoS with all validators staked on the relay chain. This means that all parachains share the security of the relay chain, which is a huge benefit to new projects who might otherwise have a low number of validators and be vulnerable to attack.

The network utilises the ‘Blind Assignment for Blockchain Extension’ (BABE) protocol for building the chain's blocks, such as ensuring that blocks have a consistent creation time and an assigned block author. It is derived from the Ouroboros consensus protocol, which was adapted by Gavin Wood, and is being developed by the Web3 Foundation and Parity Technologies.

The relay chain also provides interconnectivity with cross-consensus messaging known as XCM. It enables the parachains to securely exchange information and perform transactions without needing a trusted third party. This allows transfers of data or assets between different blockchains, and for cross-chain D’Apps to be built. It can be done without the need for a bridge which could potentially be unsecured and therefore liable to exploits. The interoperability and scalability this provides to projects will likely become increasingly important.

Teams can gain a slot to build a parachain by taking part in an auction, or from the Web3 Foundation allocating a slot to a project it believes will benefit the network. The permissionless auctions allow users to vote on which projects get priority with teams bidding for a slot. Users contribute by locking up their DOT tokens and teams then reward contributors. This system is popular with a lot of teams as it does not require a significant upfront cost for bidding and also means they will have strong support from launch if they win.

Polkadot's approach to governance is one of its core strengths, and the parachain auctions are one of the best examples of this.

The Avalanche chain was first shared on the InterPlanetary File System, a decentralised peer-to-peer file sharing protocol, by a pseudonymous group ‘Team Rocket’ in early 2018. It was later developed by a dedicated team from Cornell University led by Emin Gün Sirer, a professor of computer science.

Following this Ava Labs was created to help develop the network, using some of the best talent from Wall Street. Avalanche's ICO ended in July 2020, followed by the launch of the mainnet and native token issuance, later that year in September.

The network uses PoS with the ‘Snowball’ consensus and is designed to be very scalable. No matter how many participants the network has, the number of consensus messages sent will remain the same, because a node will only query twenty other nodes. It operates in a way similar to random audits which ensures the chain is in agreement.

Avalanche’s network provides a stable base for projects to launch finance-based D’Apps and allows a core focus on an interoperable, scalable ecosystem. Unlike other networks, Avalanche does not run on just one chain. It’s a multi-chain network made up of the Platform Chain (P-Chain), Contract Chain (C-Chain), and Exchange Chain (X-Chain). The three chains all serve different purposes, but put together they act with the power of one network.

The P-Chain is the metadata chain and allows users to create subnets, monitor active subnets, and maintain validators. Each chain runs a slightly different consensus mechanism tweaked for the specific requirements. In this case, ‘Snowman’, is optimised for a high number of transactions per second (TPS) and smart contract applications.

The C-Chain is EVM compatible and allows users to create smart contracts, using a specific API.

The X-Chain acts as a decentralised platform for creating and trading tokenised assets, with specific rules attached that help to govern its activity. This is the chain that the AVAX native token is traded on.

Subnets are Avalanche’s biggest scaling solution. They are sovereign networks that define their own computer logic, determine their own fee structure, maintain their own state, and provide their own security. This allows users to create their own blockchain, utilise validators, and piggyback onto Avalanches consensus latency (the speed at which a transaction occurs).

Solana was first proposed in a white paper in November 2017 by Anatoly Yakovenko. In 2018 the Solana Labs team began searching for funding and raised $20 million in private token sales in 2019, with the first block created in March 2020.

It claims to be the fastest blockchain in the world with the most rapidly growing ecosystem. The network is highly scalable, theoretically reaching 710k TPS (transactions per second) and processing 2.7k on average. In comparison, Ethereum currently handles only ∼15, Polkadot 1.5k, and Avalanche 4.5k (without counting subnets). This makes Solana’s usage really cheap: at the time of the writing, a transaction only costs $0.00025.

The network uses Proof-of-History (PoH), a key tech element, which makes scalability possible. It’s an upgraded version of PoS with the ability to process more transactions without having to rely on layer 2 solutions or sharding.

PoH is based on time. Many blockchains, like Ethereum, use outside programs to define a timestamp to validate transactions in the correct order. But this is an issue as it takes up processing power, Solana solves this quite easily by just building these timestamps into the chain itself. Validators don’t then need to allocate much power towards verifying multiple times.

Block validation is done by using a Verifiable Delay Function (VDF), a function within its PoH protocol, which takes the input and generates an output that can be chained with cryptographic hashing. This enables a faster block verification time.

The VDF is used for tracking time whereas the PoH chain includes hashes of data that has been processed. This is a double-edged sword because while it can track history; this history can also be manipulated by changing when the hash occurred. The PoH chain can’t serve as a good source of randomness, a VDF without that data could produce more pure random.

·   ·   ·

The technology behind the four platforms we have looked at all function differently, with varying approaches to consensus mechanisms and block verification. They all aim to prioritise speed, cost, or scalability but to achieve this they have to sacrifice one. Maybe one day a chain will be able to achieve all three.

In the next article, we will introduce an Ethereum deep dive and explore its many quirks. We will also touch on significant events such as ‘The Merge’ and ‘Sharding’ upgrades.