Today, blockchain use cases have far surpassed just cryptocurrencies, and consequently, the number of blockchain protocols has skyrocketed. Blockchain protocols are a set of guidelines that enable data to be shared securely and reliably across cryptocurrency networks.
Empowering Decentralization, Scalability, Consistency, and Security
The aim of blockchain protocols is to address the following principles:
Decentralization: Because blockchain is a decentralized network, it’s not necessary for any central authority to validate transactions. Rather, the protocols control how data is stored, transmitted, and authenticated across the network.
Scalability: This refers to an increase in transaction numbers. Previously, scalability has been challenging in the blockchain. Today, however, protocols handle the increase in transactions in the network. Protocols also add nodes to the network.
Consistency: Protocols update the entire database at each step of a transaction so every user is knowledgeable about the entire network.
Security: Protocols are responsible for securing the entire network, defining the data’s structure as well as securing it from malicious users.
Top 12 Blockchain Protocols
However, since there are so many protocols available, it can be difficult for organizations to determine which really matters. Here are the top 12 blockchain protocols to know.
A peer-to-peer cash system, Bitcoin is the most well-known crypto protocol. It lets people conduct financial transactions with one another without trusted third parties, such as financial institutions. It enables transactions that are not reversible and also stops double-spending.
In addition, the Bitcoin network is decentralized, which means it is not controlled by any one entity, providing more security and making it hard for organizations to tamper with transactions. And the network uses a proof-of-work (PoW) consensus mechanism to confirm and record crypto transactions.
The Ethereum protocol is designed around smart contracts, where contracts are automatically performed without the need for third parties when certain conditions on the network are met. The designs of the Ethereum network are scalable, which means it can handle numerous transactions per second, making it perfect for decentralized apps (dApps) that need to handle huge amounts of data.
Quorum, which is enterprise-focused, aims to help organizations in the finance industry and has major backing from those financial institutions. An open-source project developed by J.P. Morgan Chase, Quorum can be used by anyone. Built on Ethereum, it is compatible with smart contracts and Ethereum tools.
Cardano is a proof-of-stake (PoS) blockchain platform used to develop smart contracts and secure and sustainable decentralized apps. It runs on a protocol known as Ouroboros that aims to reduce the use of energy in crypto transactions.
Corda, an enterprise protocol, was developed by the R3 banking consortium. As such, the Corda protocol is ideal for financial services applications. An open-source framework, Corda maintains security and transparency via consensus algorithms.
A decentralized platform, TRON can be used to develop smart contracts as well as decentralized applications. Because it mainly focuses on the entertainment industry, content creators can use the platform to publish, store, and make money from their digital content.
7. Binance Smart Chain
Designed for decentralized apps, the Binance Smart Chain (BSC) enables inexpensive and speedy transactions. Since BSC is scalable, it can handle a huge number of transactions in a short time, so it’s suitable for decentralized apps that must handle huge amounts of data.
In addition, as this protocol uses a proof-of-stake consensus mechanism, it enables the network to use less energy than Bitcoin’s proof-of-work mechanism.
A decentralized network with independent blockchains, Cosmos enables assets and data to be transferred between unrelated blockchains. It offers a shared security model for all connected chains and enables secure and fast transactions.
Because Cosmos focuses on scalability and interoperability, it’s a good choice for decentralized finance (DeFi) projects and decentralized exchanges.
This multichain network allows unrelated blockchain systems to work together. Developers can use Polkadot to create decentralized apps to allow these different blockchains to communicate with one another and transfer any type of data across any type of blockchain. This means developers can create more interconnected and complex apps.
The designs of this blockchain protocol are similar to decentralized social media apps. Hive provides secure and fast transactions. It has a large content creator and curator community, and, as such, it’s noted for its emphasis on society, engagement, and collaboration.
A scalable and fast protocol, Solana is developed for decentralized finance apps. It can process thousands of transactions per second using the Solana proof-of-stake consensus algorithm.
Primarily focused on developer adoption, it offers several tools and resources to help them build on the platform.
An open-source blockchain protocol, Hyperledger was developed by the Linux Foundation. As a permissioned blockchain, only authorized parties are able to participate in the network. The protocol is scalable, flexible, and modular, so it is suitable for enterprise apps. Hyperledger targets organizations in different industries and aims to enable business transactions and other financial services.
The protocol’s smart contract engine enables companies to more easily develop and deploy smart contracts. Hyperledger also offers individuals a secure channel where they can share private data.
These 12 blockchain protocols depict a range of technologies and use cases, each of which has its own strengths and weaknesses. Consequently, users and developers much decide which protocols best meet their needs.
That means that as blockchain technology continues to evolve, users and developers must stay informed and up to date regarding the latest blockchain developments.