- Modular blockchains are becoming increasingly popular in the cryptocurrency ecosystem due to their ability to provide decentralization, security, and scalability by assigning specific purposes to each component or tier.
- The modular blockchain layout is more adaptable than the monolithic blockchain, allowing for greater efficiency by shifting work to different layers.
The traditional industry standard for cryptocurrencies has been monolithic blockchains, but this is slowly changing as there is growing evidence that monolithic architectures do not perform well.
The idea of modular blockchain architecture is a highly debated topic in the cryptocurrency ecosystem in 2023. The Celestium concept faces resistance due to security concerns and new trust assumptions associated with a distributed settlement and data availability layer.
Benefits of Modular Blockchains
Modular blockchains enable decentralization, security, and scalability, allowing users to avoid issues like Ethereum’s expensive gas fees or Bitcoin’s lengthy confirmation times in the real world. Assigning specific purposes or duties to each tier or component promotes security, efficiency, and speed.
For example, Ethereum, arguably the most popular blockchain among developers creating decentralized applications, is credited with introducing advancements like smart contracts to the Web3 community while maintaining strict security requirements.
To address Ethereum’s scalability problem, a different type of Layer-2 blockchain was introduced. It relies on the Ethereum Mainnet for its security but processes transactions on third-party networks to improve throughput speeds.
Compared to monolithic blockchains, modular blockchain architecture is significantly more flexible, providing miners with access to functionalities that are not available in monolithic blockchains.
While all cryptocurrency blockchains share some basic features such as guaranteeing data availability, security, agreement, and transaction execution, monolithic blockchains handle these operations at the same layer. On the other hand, the modular architecture style of blockchain provides greater efficiency by shifting work to different layers.