What is the underlying protocol of blockchain (Blockchain protocol layer architecture diagram)?

What is the underlying protocol of blockchain? This article will introduce what the underlying protocol of blockchain is.

What is the basic protocol of blockchain? What is the underlying protocol of blockchain?

How to create a universal framework and technical standards for blockchain?

Why is a complete underlying protocol of blockchain necessary?

The underlying protocol of blockchain includes consensus mechanism, smart contract execution and storage, encryption algorithms, etc., and defines the essential functional components of these protocols for applications.

In the “consensus” we mentioned earlier, Ethereum is built as a software implementation, and it uses Proof of Work (PoW) to validate transactions. Proof of Work (PoW) in Bitcoin is used as a process to calculate resources or process transactions. However, if miners do not have enough time to complete this task, network security cannot be guaranteed.

Therefore, “consensus” is also called Proof of Stake, which is done by incentivizing participants to provide rewards for specific business activities, that is, nodes can allocate network fees required for block production based on rules they choose. In order for everyone to receive token rewards and transfer income, the system sets a special security threshold that requires nodes to run their services, such as payment to mining pools or miners.

However, when a user starts sending money to others, the account will lose ownership until they no longer have their own private key. In this case, no one on the network will be penalized for not upgrading to a new client. Due to some developers wanting to improve the efficiency and reduce costs of the system, but these restrictions have not been fully met.

In addition, there are many blockchain projects trying to introduce new innovations in blockchain technology and the field of cryptocurrencies, the most famous of which is Nervos Network. Nervos, funded by the Ethereum Foundation, is currently actively exploring this emerging field and applying for patents.

Although most blockchain companies have proposed blockchain-based solutions, in fact, only a few companies are willing to adopt them, such as EOS, Binance, Kraken, Ripple, Bitcoin.com, KuCoin, Zcash.

But what is interesting is that besides blockchain supporting native assets, there are many other types of applications, such as identity management, insurance, supply chain financing, etc. These are critical modules built on different blockchains. The underlying protocol of blockchain usually includes three parts:

1) Trust-minimized infrastructure; 2) Data structure and privacy control; 3) Public record preservation protocol.

Below, we will discuss the underlying protocol of blockchain and its characteristics.

Blockchain Protocol Layer Architecture Diagram

According to official sources, the Blockchain Consortium team has released the “Research Report on the Design of Blockchain Protocol Layer Architecture”. The report provides a comprehensive introduction to the blockchain protocol layer.

The following is an overview of the audited protocol layer architecture: Underlying technology: All digital tokens including Bitcoin and Ethereum can be encoded or executed through their consensus mechanisms. Application layer: Supports a multi-chain parallel development framework; smart contract modules and general data structures; sidechains: Provide a complete set of cross-chain service solutions to support various types of assets and decentralized finance.