There are many blockchain protocols used for development, with each having its own benefits, such as adaptability, unique features, and efficiency. But that isn’t enough. While choosing the right blockchain protocol for the development, you need to look beyond these. Many factors go into choosing the best blockchain network for your upcoming project.
Talking about the blockchain protocols, they are one of the most pivotal components of the blockchain technologies that allow to automatically share data across different crypto networks. Protocols characterise the way that information should be organised to be acknowledged into a framework, and they lay out shields to keep malicious users from causing harm.
One of the most important factors while developing a blockchain solution is implementing the right protocol. Making sure to select the right platform depending upon your requirements can save you a lot of time and many hardships down the line. Consensus for Blockchain is similar because they allow server nodes to trade data over the web such that all frameworks in an organisation can recognize it.
Most Important Blockchain Protocols:
Blockchain technology offers great advantages in many industries and business spheres with public ledger technology which brings in more security, affordable cost, and enhanced efficiency.
Having said that, choosing the right blockchain development company based on your project requirements can save you valuable time. This is particularly evident with the sheer number of various protocols accessible: settling on a wise decision is vital to fruitful blockchain deployment.
The first thing to consider is whether you want to use a public or private blockchain network.
Let’s talk about them here.
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Public Blockchain Protocols
As the name says, public networks are permissionless, open-source that anyone having the internet can access. Thus a developer can easily be a part of the network simply by downloading and launching the node. For example, Ethereum is a public protocol that allows users to create and integrate smart contracts without needing to build their ecosystem. Therefore, anyone can build a decentralised application on the Ethereum networks, provided they buy some amount of Ether to pay as gas fees. This blockchain protocol runs on decentralisation and immutability. This helps in creating trust and transparency amongst the users. However, the only downside of the public blockchain network is the slightly lower efficiency, and cost because of its prolonged and energy-consuming confirmation process.
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Private Blockchain Protocols
As the name suggests, private blockchain networks unlike public ones require validation to access and work under a centralised authority. Entrance control methodology can go from permitting existing members to designate future contestants. It also requires a user to finish preset conditions of tasks before conceding the confirmation. Once the user joins the network they can participate in assisting the maintenance of the decentralised network. Since the networks depend on the participants to confirm the transactions, there is no record-generating system to protect the network. However, when it comes to robustness and compliance, private networks are much better because of the centralisation. However, when it comes to network manipulation, these types of networks are more prone.
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Hybrid Blockchain Protocols
As the name says, the Hybrid protocol is an amalgamation of public and private networks. Depending upon the project requirements one can use both private and public chains while building a hybrid network. Thus some of the information can develop on the private network. And a public blockchain can establish the consensus on different set conditions.
In addition, if a user decides to join a hybrid network they will have full access to the network. However, the identity of the participants is always private from the rest of the participants, unless they carry out a transaction. This allows the hybrid network to maintain privacy while allowing communication with third parties.
Essential Concepts to Know While Choosing the Blockchain Protocol
Basically, to benefit from Blockchain innovation, you need to comprehend what protocols mean for network execution and the restrictions that they can involve. While looking to comprehend consensus, you ought to begin by seeing a few basic terms that experts use to portray how Blockchains impart.
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Proof of Work
Although the idea of Proof of Work is rising thanks to the blockchain protocols. But the concept has been around for over many years. This consensus is a small series of information that is difficult for a PC to make, however promptly checked by outside parties. Proof of work makes bitcoin mining difficult. While allowing anybody to demonstrate that new coins are authentic.
In ordinary cryptographic forms of money, proof of work is additionally used to affirm the legitimacy of exchanges. Today, new advancements in finance, corporate administration, and different fields are being based on the idea of proof of work to accomplish development.
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Distributed Ledger Technology (DLT)
Just like blockchain technology, distributed ledger technology is a peer-to-peer network that allows multiple members to keep their identical copies of the distributed ledger. However, instead of needing a central authority to update and convey the records to various users. The DLT allows users to confirm, execute, and record their transactions without depending upon a central authority or intermediary. As discussed above, public, private, or hybrid blockchain protocols are all examples of DLT.
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Smart Contracts
A smart contract is a type of digital contract that runs on an Ethereum blockchain network. It is the preset conditions of code and data that establish a digital contract. Therefore it is set between two parties without requiring an intermediary. The concept of a smart contract development is to establish a more smart and efficient way to facilitate digital transactions. This is based upon pre-programmed conditions. Smart agreements can define rules, similar to a customary agreement. And naturally implement them using the code. The smart agreements are tamper-proof, and connections with them are irreversible.
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Token vs. Coin
Transferring coins amongst wallets requires you to have the technical knowledge. And also creates security threats for users who are not very much familiar with the blockchain protocols. While permanently moving coins can many times cause regulatory issues as well. This is the main reason why most blockchain solutions like crypto exchanges, decentralised apps, trading platforms and many others makes use of tokens to transfer value among the participants.
Talking about the token system, the provider keeps a specific amount of coins, while the ownership of these coins is transferred between the users while they carry transactions. So, in many ways, tokens make the transactions much more seamless. However, the problem is that the actual owner is always the provider and not a single user.
Factors that Determine the Best Blockchain Protocol for your Project
Choosing the right blockchain protocol is one of the major criteria to consider while starting with the blockchain development process. Primarily this is important because it will decide the functionalities that the proposed blockchain software solution can offer.
Significantly, the most exceptional conventions incorporate profoundly complex advances that expected the joint efforts of many blockchain researchers. Utilizing a protocol, as opposed to rehashing a new solution, permits you to finish your project quicker than expected and with fewer assets.
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Cost
One of the most important factors in choosing the right blockchain protocol is the cost. Well, it is nothing new that blockchain development requires many resources, thus high cost as well. Many businesses require a private blockchain, avoiding public blockchains, whereas a public blockchain requires more resources to accomplish the tasks.
Well, the prime reason is that the cost majorly depends upon the consensus algorithm whether it is Proof of Work or Proof of Stake. However, out of all the consensus algorithms, PoW is more costly. But then again PoS also has its fair share of shortcomings.
In simple words, PoW requires miners to take part and compete with each other to complete validations, which requires them to solve a complex mathematical equation and in return get crypto rewards.
While in the case of PoS, it does not require the miners to resolve complex mathematical equations to carry the transactions. All things considered, it involves a marking system as financial motivators to get network security. And hence is a more energy-productive method for accomplishing agreement.
Thus it is important to make sure you have all the resources needed to maintain a consensus mechanism you design for your blockchain project.
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Security
Whether you choose public or private blockchain protocol also depends upon your privacy and security concerns. Talking a public blockchain protocol, is a distributed, transparent ledger. It is decentralised with encrypted information which is stored on many devices. This makes the very network tamper-proof and secure from hackers. It is a more secure network because of the number of participants it has, especially secure from denial-of-service attacks.
On the other hand, a private blockchain manipulates users’ control and access to the information. Thus while using this blockchain protocol one can keep their information private. It is easy to modify by the owner and is more susceptible to hacking.
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Speed
The blockchain protocol you choose also affects the speed of transactions. Whether your business requires high transaction speed, or a slower, but less power consuming method is always better. You must not compromise on the scalability. It is important to choose the blockchain protocol wisely. Likewise, if your project is not dependent upon the transactions, maybe you could limit members and organisation choices to cost, quality, access, and usability, and appropriately survey complete organisation exchange speed and charges.
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Smart Contracts
A digital contract is preset conditions by coding and executes once the conditions meet. And it can also store the data in this network. These consensus protocols make it possible to develop decentralised apps. In these types of apps, smart contracts integrate. This is to provide conditions based on the need of the project. Notably, you will have to decide whether your business needs smart contracts.
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Bridging
Bridging is again a feature that allows users to migrate assets and transfer money from one protocol to another in a smooth way. Thus when you develop a blockchain project, you need to see what kind of bridging support and compatibility you will require. Thus while deciding on a blockchain protocol for your project, bridging is also an important factor to consider. This gives you the flexibility to move the app from one protocol to another. Along with cross-chain or multi-chain compatibility depending upon how things move in future.
List of Top 3 Blockchain Frameworks to Consider
Now that we have made clear some of the basic components and terms in blockchain protocols. And the factors that influence your decision of choosing the right blockchain protocol. It is the right time to discuss the best blockchain frameworks to choose from.
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Ethereum
Needless to mention, it is one of the most preferred blockchain frameworks at the moment. Ethereum is the blockchain that brought into existence of the smart contracts. Getting launched in 2015, the Ethereum blockchain has quickly turned into this massive name with a market cap of $195.23B as of today. It truly dominates most of the blockchain development projects while developing dApps.In addition Ethereum enterprise provides a set of guidelines and technicalities to enhance use of blockchain software development.
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Corda
Corda has a blockchain protocol which is particularly designed for businesses. Again most of the decentralised applications that have been built on Corda are for financial services. But then again, many custom blockchain solutions can also utilise this framework for blockchain software development. Corda aims to improve the enterprise solutions with enhanced operational efficiencies, lower operational, and better processing time. In addition, it will also build trust amongst users with higher transparency and data immutability.
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Hyperledger
Hyperledger is an open source permissioned blockchain framework that aims to build a suite of tools that businesses can use effectively. The framework is mostly used to develop blockchain software solutions because it offers a suite of libraries that boost the speed of development. Moreover, Hyperledger is compatible with Linux as well which is widely used in most businesses.
Final Words
While developing a blockchain solution, choosing the right protocol is pivotal, and is one of the most crucial decisions to make. Consensus matters as they decide the extent of use that your designed solution can give. It is crucial to decide on the main blockchain protocols that consist of highly advanced technologies that require the combined effort of thousands of computer researchers. By taking benefits from these blockchain protocols, one can seamlessly finish their blockchain project on time and at a reasonable cost. You can check impact of blockchain technology in economy.
However, since blockchain protocols can be highly complex, it is crucial to understand each so one can implement it accurately.