343
views

Top Blockchain Protocols Everyone Should Know

It has become challenging for us to tell whether things are real or not in today’s world. It can be a primary bank transaction or a vote in an election; the only way to validate these actions is by keeping a record. Society today validates these records through centralized authorities; this can be either a bank, government authority or an individual with the power to confirm the information.

This puts a lot of power in these centralized authorities’ hands and leaves room for loopholes that can be exploited at the consumer’s expense. As a result, in 2009, Satoshi Nakamoto invented Bitcoin, which became the first form of money that removes a central authority’s need.

Bitcoin became the first of many forms of cryptocurrency to be introduced into the market. Satoshi’s invention found a way to build a digital decentralized cash system, a currency outside government regulations. A decentralized network works as a peer to peer network for file sharing; it is recognized through a payment network with accounts, balances, and transactions known as a blockchain.

What is a Blockchain

A blockchain acts as a distributed ledger that is entirely open to the public. The data stored depends on the type of blockchain, and this differs between the different types of cryptocurrency. Its security comes from its creative use of hashing and distribution. Second, there is the hash that identifies as a block and all of its contents. Similar to a fingerprint, it is useful for detecting changes in the block.

The data stored depends on the type of blockchain; for example, Bitcoin uses both the sender and a receiver and keeps a record of the amount of money in the network.

Several elements contribute to creating a blockchain; this includes peer-to-peer network relations and their ability to create a space for the network to communicate and share remotely.

The next would be cryptography, which allows for reliable communication in a secure environment. After cryptography, the consensus algorithm is the set of rules that decides on the criteria for adding a new block. Bitcoin, for example, uses the Proof of Work algorithm.

These algorithms are also known as blockchain protocols; they are different systems carried out to reach a consensus and verify transactions within a blockchain network. Some blockchain protocols require either physical mining equipment such as nodes, and others use coins purely alone while others incorporate both methods.

Blockchain Protocols

Proof of Work

The first would be Proof of Work, as mentioned above; this protocol uses physical mining rigs with many graphics cards to power up the many machines. The more powerful a rig, the higher the chances of winning the next block and receiving the coins as a reward. This is one of the more expensive protocols as there is a lot of initial cost in equipment and electricity.

Proof of Stake

Proof of Stake is another protocol that does not require the same physical rigs as the POW. This protocol allows coin holders to add to a network by staking their coins in their digital wallets, activating staking, and leaving the computer while the owner receives staking rewards. POS is seen as a deterministic way that depends on its wealth or stake and not blocks reward.

Delegated Proof of Stake

Delegated Proof of Stake is a different protocol that delegates nodes through votes to represent others and add new blocks to the chain. In this method, the participants have control over who can certify the ledger. 

Proof of Weight

Proof of Weight is a protocol unlike POS determined by the relative number of coins in a wallet; Proof of Weight incorporates the number of coins and the number of files they hold in the network. This method gives a further incentive to keep coins as well as contribute meaningfully to the system. The miners must work out complex cryptographic mathematical puzzles to be rewarded with a determined amount of bitcoin.

Proof of Capacity

Proof of capacity is the last method among the several varieties of the blockchain protocol. POC requires a node to pay for space. The larger the space on the hard disk, the better the chances of mining the next block and earning rewards. At first, the algorithm generates many data sets on the hard drives known as plots; the more plots you have, the better the chances of finding the next block.

Conclusion

These protocols are only but a few of the many different types that are available to use. All protocols are created to achieve effective decentralization and are determined by the platform’s kind of application.

This indicates the need for an incentive that would motivate individuals to contribute to the networks and not just the wealthy few. Due to the high price of the coins buying all the coins in an unreliable economy, it is recommended to control a new blockchain in terms of hashing.

The one protocol that kept being used is proof of stake, especially from a technical view, as it is more challenging to operate and protect against attacks. POS makes it hard for hostile actors to attack the network. This method is mainly contributing nodes in the system and to gain rewards.

Bitcoin live price
Btc
Bitcoin
$28.831
price
0.80253%
price change
BUY NOW

These are some of the leading blockchain protocols that should be understood for a basic grasp on the ideologies behind blockchains to elevate the concept of cryptocurrency.

Stay up to date with our latest articles

More posts

What is Tornado Cash, and How Does It Work?

Decentralized and non-custodial, Tornado Cash is an Ethereum-based solution for privacy and anonymity. Severing the on-chain link between those who send and receive coins enhances transaction anonymity.  This guide will provide our readers with more insight into Tornado Cash. We will start with a general introduction and move deeper into how Tornado Cash works. We will also add a list of pros and cons to this system for the reader's benefit. Understanding Tornado Cash Decentralized protocols such as Tornado Cash…

What Is the Blockchain Scalability Trilemma?

In the context of decentralization, security, and scalability, the Blockchain Trilemma refers to the generally held notion that decentralized networks can only deliver two of the three benefits at any given moment. In this article, we more closely into the matter, assessing all the most relevant aspects of the blockchain scalability trilemma. The Trilemma Vitalik Buterin invented the term "blockchain trilemma," which refers to a conundrum that blockchain engineers face while balancing three competing demands at once: decentralization, security, and…

Do Smart Contracts Represent Legal Contracts?

When industry players use the term "smart contracts," they may mean different things. Words matter, as any contract lawyer will be able to explain. Is the word “contract” a technical overstatement, or does it trigger actual legal bindings? The industry needs to agree on the consistency of its terminology. What exactly is a smart contract? Does it have any legal implications? When attorneys and technologists use this terminology, do they understand each other? Our article will provide a short analysis,…

How Do Crypto Anti-Dumping Policies Work?

Scammers utilize social media platforms to impersonate celebrities or acquaintances to persuade victims to make fake investments. The rise of cryptocurrencies and the lack of regulations gave new tools to these criminals. We'll look at how the market is attempting to safeguard investors today. Crypto commentators frequently emphasize anti-dumping regulations as a deterrent to online fraudsters. What Are Pump and Dump Operations? Before dwelling on the concept of anti-dumping policies, we need to understand what is a “pump and dump”…

Understanding Layer 3 Blockchains

Scalability has become an even more pressing issue as the crypto sector experiences increased customer demand. Many of us have come across terms like “layer one” and “layer two” protocols in the blockchain world. Blockchains must be very secure due to the lack of a centralized authority. They must also be incredibly scalable to cope with growing users and transactions. Today we will learn more about layer three solutions, a technology aiming to provide scalability while maintaining top-notch security. A…

Venezuela – How Does the Petro Crypto Work?

Venezuelan President Nicolas Maduro suggested the creation of a national cryptocurrency in 2017. Officials claim that the country's oil, gas, and mineral riches back its value. However, as of today, Petro seems to fail fulfilling its purpose of rescuing the national economy. Some foreign observers believe the Petro digital currency is a trick to circumvent international restrictions. These sanctions prevent Venezuela from borrowing cash on global markets. This article will provide an analysis of the creation of this national cryptocurrency.…

Understanding Advanced Smart Contracts

The clever use of smart contracts has contributed significantly to the exploding popularity of blockchain technology. Initially proposed by computer scientist Nick Szabo, a smart contract is a collection of instructions executing automatically. This technology aims to make the contract execution as automated as possible. Many know how basic smart contracts work, but it is rare to find a guide on their advanced versions. After a basic overview, we will analyze two typical cases of advanced smart contracts. The article…

Layer 2 Blockchain Projects – A Guide for Beginners

One of the critical difficulties confronting the blockchain community is the matter of scalability. While the technology has proven its high potential over the years, several aspects limit its applicability to a large scale. The scalability problem has been on our minds since humankind came up with the first technological inventions. We'll expand on that in this post, looking at the particular case of Layer 2 blockchains. Layer 2 (L2) blockchain definition The "Layer 2 blockchain technology" concept is gaining…

A Beginners’ Guide to Permissioned Blockchains

It has been a few years since the topic of blockchain technology invaded the market for the first time. Today, people are gradually learning to see a blockchain and a cryptocurrency as two distinct concepts. The technological and financial culture is growing, and, as a result, the industry is attracting more developers and users. Among the many consequences of this trend, we find the appearance of new tools. Today we will talk about one of the many new applications of…

Hyperledger Fabric – What Is It and How Does It Work?

The cryptocurrency world continues to see new developer ideas enter the market. Today, we will simplify a technical aspect: the Hyperledger Fabric technology. Any reader interested in learning about the most complex aspects of the topic can refer to the official documentation. This article will analyze the main elements of this system, also highlighting important criticisms in the sector. Understanding Hyperledger Fabric Let's start, first of all, by understanding the origin of the instrument name: Hyperledger is an open-source distributed…