Blockchain technology has come a long way since its debut in 2008 with Bitcoin. Adoption of the technology is gradually increasing over time. However, before blockchain technology is ready for mainstream adoption, it will need to have the capability to scale required for mainstream usage. As one of the issues that form part of the blockchain trilemma of scalability, interoperability, and throughput, a number of blockchain projects in the market are looking for ways to increase the scalability of blockchain technology. In this article, we will take a look at the different layers that make up blockchain technology, the two types of blockchain scalability, and a blockchain ecosystem that may be the solution to helping all connected blockchains scale.
The Different Layers of Blockchain Technology
Much like how a blockchain is made up of several types of nodes, it is also composed of several types of layers. Each layer fulfills a particular role in the blockchain network and, when combined with the other layers, makes it possible to have a distributed system.
Application Layer
This is the layer that all applications that use the blockchain for their specific use cases are located. These use cases leverage the decentralization that the other layers of the blockchain make possible.
Modeling Layer
This layer facilitates the network’s smart contracts and is responsible for establishing workflows as well as how the user will interact with the system.
Contract Layer
This layer deals with the smart contract itself. Smart contracts must be coded correctly as there could be financial repercussions for poorly designed smart contracts. For this reason, developers must go through multiple rounds of audits to identify any potential weaknesses in the code before deployment.
System Layer
All of the components necessary to maintain the blockchain are located in this layer. This layer consists of components such as mining consensus and all of its associated subsystems.
Data Layer
Data is stored in this layer and can be stored both off-chain, in a database, and on-chain.
Network Layer
The network layer is the foundation of every blockchain. This layer is the network of peers that make up the blockchain network. Constant communication of the current state of the blockchain is carried out by each of the peers that then broadcast the state to the other peers in the network. The peers also carry out communication regarding the security of the blockchain and the transmitted data within the network.
The Types of Blockchain Scaling
There have been many approaches to enable the scalability of blockchain technology. Some of these approaches focused on making enhancements to one or more of the layers covered above. These scaling approaches can be broken down into two categories: on-chain scaling and off-chain scaling. These categories are also known as layer 1(on-chain) and layer 2 scaling (off-chain).
On-chain, or layer 1, scaling, improvements are made to the blockchain itself. The main goal of these on-chain improvements is to alter the rules of the network’s consensus so that the network’s overall speed and throughput are increased. An example of layer 1 scaling is increasing the transaction block sizes so that transactions can be processed a lot quicker since more transactions can be processed and stored at a time.
Off-chain, or layer 2, scaling refers to methods of scaling a blockchain without making any changes to the blockchain itself. This is achieved by implementing solutions that are augmented in nature and work on top of the blockchain to expand its capabilities. The goal of layer 2 scaling solutions is to shift the burden of high transaction volumes away from the primary blockchain through off-chain processing. Once processed off-chain, the transactions are then sent to the blockchain for finality. An example of off-chain scaling is nested blockchains. These are smaller blockchains built on the primary blockchain so that the process of processing transactions is more distributed across the network. These smaller blockchains process small chunks of the blockchain’s transactions and then send them to the primary blockchain for finality.
To Recap
Several blockchain projects in the market are trying to solve blockchain’s scalability issue. These solutions either enhance or alter one or more of the layers that make up a blockchain network and are either on-chain, layer 1, scaling solutions or off-chain, layer 2, scaling solutions.
A Project That Has A Solution To Blockchain Scalability
CORE MultiChain is a blockchain ecosystem that will enable the scalability of any blockchains connected to the ecosystem. This is achieved by combining both on-chain and off-chain scalability solutions and an AI-based Proof of Stake consensus model with a secure and scalable parallel protocol for distributed ledgers. The scalable parallel protocol for distributed ledgers is a hybrid solution that combines sharding, side chains, and off-chain processing. By combining these protocols and blockchain technologies, CORE MultiChain can achieve accelerated block broadcasting times.
