Most investors think about profitable coins, tokens, and projects, but not about the blockchain networks that support them. Today we’ll be taking a deep dive into some of the most popular blockchain networks in 2023. But before we get right on that let’s look at the different types of blockchain networks and which one fits your investment expectations.
Different types of Blockchain networks
If you’ve been wondering how many blockchain networks there are, well there are three main different types of blockchain networks: Public, Private, and Hybrid Blockchains. Although the performance or output of these blockchain networks differs based on: Security, Scalability, and Decentralization. Let’s see how they compare.
LEARN MORE: What is Blockchain
Public or Permissionless Blockchains
By design, these Blockchains are permissionless. They do not require permission from a central authority or anyone else to participate in the network. Participation in these decentralized blockchains is not restricted. This ensures that all participants have equal rights and can participate in reaching a consensus.
Furthermore, public blockchains were the first blockchains to grow alongside Bitcoin, laying the groundwork for this technology. Following the study of the network, other blockchains emerged as the first-ever Blockchain used over the years. With these advantages, these blockchains are now dealing with Bitcoin issues such as scalability and decentralization. Bitcoin, Ethereum, Litecoin, and BSC are examples of public blockchain networks.
Public Blockchain Security
Public blockchains ensure that this technology is as secure as possible. The proof of work consensus algorithm is used by Bitcoin. This algorithm solves mathematical problems by utilizing a large amount of computational power.
Before a hacker can enter the network, he must gain control of approximately 51% of the nodes. This is nearly impossible because large mining farms are being built all over the world. It enables miners to participate in consensus and earn rewards. Furthermore, the security protocol may differ depending on the platform.
Public Blockchain Scalability
Scalability is an important consideration in this developing technology. However, there are some scalability issues with public blockchain technology.
These platforms are slower than usual because they are decentralized. Bitcoin can only handle a limited number of transactions (about 5TPS). As a result, speed, processing times, and throughput are all reduced.
Public Blockchain Decentralization
Public blockchains are extremely decentralized. Everyone can participate in the network and view the ledger. As a result, transparency must be maintained at all times.
Private or Permissioned Blockchain
In Permissioned blockchains, a single organization controls these blockchains. They decide who is allowed to join the network. The single organization also does not give each network participant equal rights to perform functions/activities. As a result, there is a chain of command.
KYC will be used for authorization and identification in private blockchain solutions (know your customer). This is done to determine who is entering the platform. Private blockchains are decentralized, but only to a limited number of Blockchain nodes. Networks that use private blockchains create/set a “Fixed Decentralization” to enable network scalability. Tezos, IBM, Ripple, and Hyperledger are a few examples of private blockchains.
Private Blockchain Security
Because of the transparency of blockchain technology and the benefits associated with a successful attack, it has become a prime target for hackers.
Private blockchains appear to eliminate the idea of making the ledger public in this case, as organizations require privacy to avoid attracting hackers. Without adequate privacy, their competitors may gain access to the network and leak sensitive information to the public. As a result, in some cases, organizations require a high level of privacy.
Private Blockchain Scalability
The whole point of incorporating a private blockchain is to deal with scalability issues, i.e. to limit the number of nodes that can join the network.
In this case, the organization can only allow a certain level of decentralization to ensure that the network does not become overcrowded, resulting in low processing time and throughput.
Ripple and its native token XRP manage approximately 1500 TPS. To accomplish this, private blockchains use eco-friendly consensus algorithms to reach an agreement.
Private Blockchain Decentralization
Private Blockchains are not decentralized in any way. Networks that incorporate a private blockchain sacrifice decentralization in favor of scalability. As a result, the network is only decentralized to a few nodes.
Hybrid Blockchains
Hybrid blockchains exist somewhere between private and public blockchains. They make an effort to make good/effective use of the best aspects of both public and private blockchain technology solutions. The fact that a single organization grants controlled access and freedom makes the Blockchain flexible.
IBM hybrid blockchain and XinFin Enterprise-Ready Hybrid Blockchain are two examples of hybrid blockchains (XDC).
Hybrid Blockchain Security
The XDC Blockchain network has a public state that is shared by all members because it is in both a public and private state, allowing for the public sharing of non-critical data.
Organizations can also host private subnetworks to protect sensitive and financial data from the public, as well as have distinct public and private states, making them highly secure.
Hybrid Blockchain Scalability
Blockchain hybrids are adaptable. They keep liquidity in order to provide the best performance of both private and public blockchains.
XDC, for example, employs the DPOS consensus algorithm, which is intended for use in highly scalable blockchains. The blockchain has approximately 2000 TPS in transaction records.
Hybrid Blockchain Decentralization
The DPOS is centralized in the selection of delegates, who are chosen based on the number of tokens they own and their network participation. This gives them voting power and makes the hybrid blockchain more secure, scalable, and decentralized.
Most popular Blockchain networks in 2023
The most popular blockchain networks in 2023 also comprise the biggest blockchain networks, which include:
Bitcoin (BTC)
Market cap: $364.2billion
Bitcoin is a Blockchain originally described in a 2008 whitepaper by a person, or group of people, using the alias Satoshi Nakamoto. It was released shortly after, in January 2009. The fact that Bitcoin was the first Blockchain to appear on the market gives it a distinct advantage.
Bitcoin is the most important blockchain network because it has created a global community and given birth to an entirely new industry of millions of enthusiasts who create, invest in, trade, and use Bitcoin and other cryptocurrencies in their daily lives. The creation of the first cryptocurrency provided a conceptual and technological foundation for the development of thousands of competing projects.
The entire cryptocurrency market, which is now worth more than $2 trillion, is based on the concept realized by Bitcoin: money that can be sent and received by anyone, anywhere in the world, without relying on trusted intermediaries like banks and financial services companies.
After more than a decade of existence, BTC remains at the top of this dynamic market due to its pioneering nature. Even after losing its unmatched dominance, Bitcoin remains the most valuable cryptocurrency, with a market capitalization that exceeded $1 trillion in 2021, after its price reached an all-time high of $64,863.10 on April 14, 2021. This is due in large part to growing institutional interest in Bitcoin, as well as the prevalence of platforms that provide use cases for BTC: wallets, exchanges, payment services, online games, and so on. This is why Bitcoin ranked first in our most popular blockchain networks in 2023.
Ethereum (ETH)
Market cap: $172.3billion
Ethereum, which was introduced in 2013, is one of the oldest and most established blockchain platforms. It offers a truly decentralized blockchain network similar to the Bitcoin blockchain network. According to Manders, its key strength is that it supports true decentralization through smart contracts. It has its own cryptocurrency, ether, in addition to its role as a blockchain platform that underpins enterprise applications.
The Ethereum platform is widely used by developers who create decentralized applications (DApps) on the Ethereum network. It has a mature ecosystem of tools for writing smart contracts in Solidity, which runs on the Ethereum Virtual Machine.
Alternative blockchain networks, on the other hand, can process transactions much faster and potentially at a lower cost than Ethereum, though many observers expect this to change once Ethereum implements a more efficient security mechanism. It also has a vibrant developer community led by the Enterprise Ethereum Alliance, which has over 250 members, including Intel, JPMorgan, and Microsoft.
The Ethereum community has also moved away from the proof of work (PoW) consensus mechanism in favor of the more energy-efficient proof of stake (PoS) consensus mechanism. Because of the migration, a new type of blockchain known as a “Beacon Chain” was created, which has since been merged into the main Ethereum blockchain.
According to the Ethereum Foundation, this method saves 99.95% more energy than the previous method. The community is currently working on a sharding mechanism that will increase data storage capacity, scale across the network, and reduce network fees. It is expected to go live in stages beginning in 2023. This why Ethereum ranked second among our most popular blockchain networks in 2023.
Binance Smart Chain (BSC)
Market cap: $45.7billion
Binance Smart Chain is a smart contract blockchain that was launched in late August 2020. BSC was created as a parallel blockchain to the BNB Beacon Chain, which launched in April 2020 to facilitate decentralized trading. Before becoming the native token of BNB Chain, BNB was an ERC-20 token created in 2017 alongside the market-leading exchange Binance.
BSC boasts smart contract functionality and compatibility with the Ethereum Virtual Machine (EVM), as well as the blockchain’s high throughput and 3-second block times. This means that Ethereum-native applications can easily transition to BSC and benefit from faster speeds and lower fees.
The properties of BSC have made it an appealing option for blockchain applications to easily switch over. At its peak, BSC processed 11.8 million transactions per day, which is many times the maximum volume on Ethereum.
As a crypto asset, BNB has risen to the top three in the crypto rankings, owing to a combination of BSC’s momentum, an increasing number of use cases for the token, and its use as a utility token on the Binance exchange, the world’s largest exchange by trading volume, among other factors. This is why BSC took the third spot in our most popular blockchain networks in 2023.
Ripple (XRP)
Market cap: $18.8billion
XRP was launched in 2021 and operates on the XRP ledger (XRPL), a decentralized, open-source blockchain, with transactions facilitated by the Ripple transaction protocol (RTXP). XRP Ledger (XRPL) is an open-source, permissionless, and decentralized technology with advantages such as low transaction costs ($0.0002 per transaction), speed (transactions settle in 3-5 seconds), scalability (1,500 transactions per second), and inherently green characteristics (carbon-neutral and energy-efficient).
The XRP Ledger protocol also includes the first decentralized exchange (DEX) and custom tokenization capabilities. The XRP Ledger has been running smoothly since 2012, with over 70 million ledgers closed.
The XRP Ledger supports a wide range of payment-related applications and use cases, including micropayments, DeFi, and, soon, NFTs. The XRPL provides powerful utility and flexibility to enterprises and Python, Java, and JavaScript developers. Developers can access various tutorials on the XRP website to help them get started with different coding languages, building apps, managing accounts, and more.
Along with its native coin, XRP, developers use the XRP Ledger to create solutions that solve inefficiencies, such as remittance and asset tokenization. The XRP Ledger currently has five main applications: payments, tokenization, DeFi, CBDCs, and stablecoins. This is why Ripple occupies the fourth position in our most popular blockchain networks in 2023.
Cardano (ADA)
Market cap: $11.3billion
Cardano was founded in 2017 and is named after Gerolamo Cardano, a 16th-century Italian polymath. The native ADA token is named after Ada Lovelace, a 19th-century mathematician widely regarded as the world’s first computer programmer. The ADA token is intended to allow owners to participate in the network’s operation.
Cardano is one of the largest blockchains to successfully use a proof-of-stake consensus mechanism, which uses less energy than Bitcoin’s proof-of-work algorithm.
The project has taken pride in ensuring that all technology developed undergoes a peer-reviewed research process, which means that bold ideas can be challenged before they are validated. According to the Cardano team, academic rigor contributes to the blockchain’s durability and stability, increasing the likelihood that potential pitfalls can be anticipated in advance.
Cardano held a Shelley upgrade in 2020 with the goal of making its blockchain “50 to 100 times more decentralized” than other large blockchains. Cardano’s CEO, Hoskinson, predicted at the time that this would pave the way for hundreds of assets to run on its network. This is why Cardano occupies the fifth position in our most popular blockchain networks in 2023.
Why is blockchain better than traditional technologies?
Enhanced security
Your data is sensitive and critical, and blockchain has the potential to significantly alter how your critical information is perceived. Blockchain prevents fraud and unauthorized activity by creating a record that cannot be altered and is encrypted end-to-end. On the blockchain, privacy concerns can be addressed by anonymizing personal data and using permissions to restrict access. Information is distributed across a network of computers rather than on a single server, making data access difficult for hackers.
Tamper-resistant
Blockchain technology prevents data tampering within the network, making it impossible to erase or replace recorded data. Traditional data, on the other hand, is prone to tampering. The traditional database employs CRUD (create, read, update, and delete) at the primary level to ensure proper application operation, and the CRUD model allows for simple data erasure and replacement. Such information is vulnerable to manipulation by rogue administrators or third-party hackers.
Transparency
Without blockchain, each organization has to keep a separate database. Because blockchain uses a distributed ledger, transactions and data are recorded identically in multiple locations. All network participants with permission to access the information see the same information at the same time, providing full transparency. All transactions are immutably recorded, timed, and date-stamped. This enables members to view the entire history of a transaction and virtually eliminates any opportunity for fraud.
Traceability
Blockchain creates an audit trail that documents the provenance of an asset at every step on its journey. This helps provide proof in industries where consumers are concerned about environmental or human rights issues surrounding a product, or in industries plagued by counterfeiting and fraud. With blockchain, it is possible to share data about provenance directly with customers.
Speed & Efficiency
Traditional paper-intensive processes are time-consuming, prone to human error, and frequently necessitate third-party intervention. Transactions can be completed more quickly and efficiently by streamlining these processes with blockchain. Documentation and transaction details can be stored on the blockchain, eliminating the need to exchange paper. Because there is no need to reconcile multiple ledgers, clearing and settlement can be completed much more quickly.
Automation
Transactions can even be automated using “smart contracts,” increasing your efficiency and speeding up the process even more. When pre-specified conditions are met, the next step in the transaction or process is triggered automatically. Smart contracts eliminate the need for human intervention as well as reliance on third parties to ensure that contract terms are met. In the insurance industry, for example, once a customer has submitted all required documentation to file a claim, the claim can be automatically settled and paid.
Censorship
Because it is not controlled by a single party, blockchain technology operates in a censorship-free environment. As a result, no single authority (including governments) can disrupt the network’s operation. Meanwhile, traditional databases have central authorities that regulate network operations and have the authority to censor. Banks, for example, can suspend users’ accounts.
