Most popular blockchain networks in 2023
While investors often focus on the profitability of coins, tokens, and projects, they tend to overlook the underlying blockchain networks that power them. In this article, we will extensively explore some of the widely adopted blockchain networks in 2023. However, before delving into that, let’s first examine the various types of blockchain networks and determine which one aligns with your investment expectations.
Different types of Blockchain networks
If you’ve been curious about the number of blockchain networks available, it’s important to note that there are primarily three main types: Public, Private, and Hybrid Blockchains. However, these blockchain networks vary in terms of their performance, which is influenced by factors such as Security, Scalability, and Decentralization. Now, let’s explore and compare how these factors differ among the various types of blockchain networks.
Public or Permissionless Blockchains
Public or permissionless blockchains are designed to be open and do not require permission from a central authority or any other entity to participate. They offer equal rights to all participants and allow for decentralized consensus.
Public blockchains, including Bitcoin, Ethereum, Litecoin, and Binance Smart Chain (BSC), were among the first to emerge and lay the foundation for blockchain technology. However, they face challenges such as scalability and decentralization.
In terms of security, public blockchains prioritize robustness. Bitcoin, for example, utilizes the proof-of-work consensus algorithm, which requires a significant amount of computational power to solve complex mathematical problems. The requirement of controlling over 51% of the network nodes makes it nearly impossible for hackers to gain control.
Scalability remains an issue for public blockchains due to their decentralized nature. Bitcoin, for instance, has limited transaction capacity, resulting in slower speeds, longer processing times, and reduced throughput.
Public blockchains excel in decentralization, as they allow anyone to participate in the network and access the ledger. Transparency is a key aspect, ensuring that the system remains accountable and accessible to all participants.
It’s important to note that the security protocols, scalability solutions, and decentralization mechanisms may vary among different public blockchain platforms. However, the overall goal is to maintain security, address scalability challenges, and uphold transparency in these networks.
Private or Permissioned Blockchain
Private or permissioned blockchains are controlled by a single organization that determines who is allowed to join the network. Participants in these blockchains do not have equal rights, and there is a hierarchical structure in place.
Authorization and identification, often through Know Your Customer (KYC) processes, are used in private blockchain solutions to verify participants’ identities. These blockchains maintain a level of decentralization but with a limited number of nodes. To ensure scalability, private blockchains often establish a fixed level of decentralization. Examples of private blockchains include Tezos, IBM, Ripple, and Hyperledger.
Security in private blockchains focuses on maintaining privacy and mitigating the risk of successful attacks. As these blockchains are not public, organizations prioritize privacy to prevent competitors from gaining access to sensitive information. Transparency is limited to authorized participants to prevent unauthorized exposure.
Scalability is a key driver for implementing private blockchains. Organizations aim to address scalability issues by controlling the number of nodes that can join the network. By limiting decentralization, they ensure that the network does not become overcrowded, leading to slower processing times and reduced throughput. Private blockchains employ eco-friendly consensus algorithms to achieve scalability. Ripple, for instance, manages around 1500 transactions per second (TPS).
Decentralization is sacrificed in private blockchains to prioritize scalability. These networks are only decentralized to a limited number of nodes, and the hierarchical structure of the organization remains intact.
It’s important to note that the level of privacy, scalability, and decentralization may vary among different private blockchain implementations, depending on the specific requirements and goals of the organization.
Hybrid blockchains can be described as an intermediate form between private and public blockchains. They aim to leverage the advantages of both private and public blockchain technologies. The flexibility of hybrid blockchains stems from the controlled access and freedom granted by a single organization.
Examples of hybrid blockchains include IBM’s hybrid blockchain and XinFin Enterprise-Ready Hybrid Blockchain (XDC).
When it comes to security, the XDC Blockchain network has a shared public state that allows all members to access non-critical data. Additionally, organizations can create private subnetworks to safeguard sensitive and financial information from the public. This ability to maintain distinct public and private states enhances security.
Hybrid blockchains also excel in scalability. They combine the liquidity of both private and public blockchains to achieve optimal performance. For instance, XDC implements the DPOS consensus algorithm, specifically designed for highly scalable blockchains. This results in a transaction record capacity of approximately 2000 transactions per second (TPS).
In terms of decentralization, the DPOS algorithm centralizes the selection of delegates based on token ownership and network participation. Delegates possess voting power, contributing to the hybrid blockchain’s enhanced security, scalability, and decentralization.
Most popular Blockchain networks in 2023
As of 2023, several blockchain networks have gained significant popularity and adoption across various industries. Let’s take a detailed review of some of the most popular blockchain networks in 2023:
Bitcoin remains the most widely recognized and valuable cryptocurrency. It operates on its own blockchain network and serves as a decentralized digital currency. Bitcoin is known for its secure and transparent transactions, store of value properties, and its role as a pioneer in the blockchain space.
Ethereum is a decentralized platform that enables the creation of smart contracts and decentralized applications (DApps). It has a robust ecosystem and is known for its programmability and versatility. Ethereum’s blockchain network supports the execution of complex applications, token creation, and decentralized finance (DeFi) protocols.
Binance Smart Chain (BSC)
Binance Smart Chain is a blockchain network developed by the cryptocurrency exchange Binance. It has gained popularity due to its compatibility with the Ethereum Virtual Machine (EVM), allowing developers to easily port their Ethereum-based projects to BSC. BSC offers lower transaction fees and faster block confirmation times, making it attractive for decentralized application development.
Cardano is a blockchain platform that aims to provide a secure and scalable infrastructure for the development of decentralized applications. It distinguishes itself with a strong focus on research, formal verification, and a layered architecture. Cardano’s blockchain network aims to offer increased security, sustainability, and interoperability.
Solana is a high-performance blockchain platform designed for decentralized applications and crypto-native projects. It is known for its fast transaction speeds and low fees, making it suitable for applications requiring high throughput and real-time functionality. Solana’s blockchain network employs a unique proof-of-history consensus mechanism to achieve scalability.
Polygon, formerly known as Matic Network, is a Layer 2 scaling solution for Ethereum. It aims to improve scalability and lower transaction costs, allowing for faster and more efficient transactions. Polygon’s blockchain network offers a range of solutions, including sidechains, plasma chains, and standalone chains.
Polkadot is a multi-chain platform that enables interoperability between different blockchains. It allows for the seamless transfer of assets and data between various networks, fostering a connected and scalable blockchain ecosystem. Polkadot’s blockchain network aims to address scalability, security, and governance challenges faced by existing blockchains.
Avalanche is a platform focused on achieving high scalability, speed, and decentralization. It offers a range of features for building and launching decentralized applications and custom blockchain networks. Avalanche’s blockchain network uses a consensus protocol called Avalanche consensus, enabling quick finality and efficient transaction processing.
These blockchain networks have garnered significant attention and usage across industries such as finance, decentralized finance (DeFi), gaming, supply chain management, and more. Their popularity stems from their unique features, scalability solutions, and vibrant developer communities. However, it’s important to note that the blockchain landscape is constantly evolving, and the popularity and relevance of specific networks may change over time as new technologies and innovations emerge.
Why is blockchain better than traditional technologies?
Blockchain offers several advantages over traditional technologies, which contribute to its increasing adoption and potential to disrupt various industries. Here are some reasons why blockchain is considered better than traditional technologies:
One of the key features of blockchain is decentralization. Unlike traditional centralized systems where data and control are concentrated in a single authority, blockchain operates on a distributed network. This decentralization improves transparency, eliminates single points of failure, enhances security, and reduces the need for intermediaries.
Blockchain provides immutability, meaning that once data is recorded on the blockchain, it is extremely difficult to alter or tamper with. The use of cryptographic hashing and consensus mechanisms ensures that data remains secure and unchangeable, making blockchain suitable for applications where data integrity is critical.
Transparency and Trust
Blockchain networks are transparent, as all participants have access to the same version of the distributed ledger. Transactions and data recorded on the blockchain are visible to all authorized participants, fostering trust and accountability. This transparency can be particularly valuable in areas such as supply chain management, financial transactions, and voting systems.
Blockchain utilizes advanced cryptographic techniques to ensure the security and integrity of data. The use of public-key cryptography, digital signatures, and consensus algorithms helps protect against fraud, unauthorized access, and data tampering. Blockchain’s distributed nature also makes it resilient to attacks, as compromising a single node does not compromise the entire network.
Efficiency and Cost Reduction
Blockchain can streamline and automate complex processes, reducing the need for intermediaries and manual reconciliation. This leads to increased operational efficiency, lower costs, and faster transaction settlement. Smart contracts, a feature of blockchain, enable self-executing agreements with predefined rules, reducing the need for intermediaries and manual enforcement.
Blockchain allows for data privacy through cryptographic techniques. It enables selective disclosure of information, where certain data can be revealed to specific participants while keeping the rest of the data private. This can be advantageous in industries such as healthcare, where sensitive data needs to be protected.
Enhanced Traceability and Auditing
Blockchain provides an immutable record of transactions, making it easier to trace the origin and movement of assets or goods. This feature is particularly useful in supply chain management, where stakeholders can track the provenance and authenticity of products, ensuring quality control and reducing fraud.
While traditional technologies have their merits, blockchain’s decentralized and secure nature, coupled with its potential for transforming various industries, make it a compelling alternative. However, it’s important to note that blockchain is not a one-size-fits-all solution, and careful consideration of specific use cases and implementation challenges is necessary.
Caleb is a technical writer at AlteBlock with over 2 years of experience in covering DeFi-related content such as crypto news, exchange reviews, and guides. He is also a Civil engineering graduate who can be found on-site when not writing an article.