An Overview of the Emerging Blockchain Networks in 2021
A look at the features and functionalities of emerging blockchain networks in 2021.
Blockchain Networks in 2021
The emergence of Bitcoin has led to a more in-depth exploration of its underlying foundation: blockchain technology. This in turn led to the exploration of decentralized applications for several industries.
Ethereum is one of the most prominent blockchain networks for the development of decentralized applications, though in recent years new blockchain networks have emerged to redefine features such as scalability, security, and interoperability. Moreover, the expansion of the overall industry has highlighted the loopholes of the Ethereum blockchain network leading to the rising prominence of the other networks.
In this article, we review the features and functionalities of emerging blockchain networks that are widely popular for dApp construction.
Charles Hoskinson, a co-founder of the Ethereum network and the founder of Cardano (ADA), researched the overall development of crypto space and published more than 100 papers over a three year period. These research papers laid a theoretical foundation for Cardano.
Cardano is built upon a variant of the proof of stake consensus known as the Ouroboros mechanism. It uses the consensus protocol to validate transactions and create blocks on its blockchain network. The Ouroboros was the first of its kind PoS protocol and solves a crucial security issue on Proof of Stake networks. It protects the network against the double-spend or 51% attack.
Launched in 2017, the Cardano blockchain network has gained soaring popularity in recent times. The Cardano blockchain has expanded its possibilities by rolling out new features that facilitate the development of Non-Fungible Tokens (NFTs) and enable support for fiat-pegged stablecoins.
Another Ethereum co-founder, Gavin Wood, founded Polkadot (DOT) in 2016. Polkadot aims to bridge interoperability between different blockchains. Its ecosystem facilitates a method for blockchains to share financial and data transactions through parallel chains. The factor of interoperability helps a user create smart contracts on Polkadot and deploy a transaction on Cardano. All parallel chains will, in the future, be hierarchical in structure, and they will all share Polkadot's robust security features.
However, each parallel chain is governed independently, while validation is made possible through a common set of nodes. Transactions on the Polkadot network are spread across multiple blockchains, making the platform highly scalable and reliable.
Binance Smart Chain
The Binance Smart Chain (BSC) network was created in September 2020 to augment the Binance Chain and solve the inherent problems of the existing chain at the time. The design team's goal was to deploy a highly functional throughput across the Binance Chain and introduce smart contracts into the platform.
While both the Binance Chain and the Binance Smart Chain originate from the same organization, BSC is an off-chain, or layer two, scalability solution. Hence, it can run independently from the Binance Chain. BSC is compatible with the Ethereum Virtual Machine (EVM) which makes it possible for dAPP developers to port their creations from Ethereum to the blockchain.
The blockchain implements a proof of stake consensus mechanism known as the Proof of Staked Authority (PoSA). Participants stake Binance Coin (BNB) to serve as network validators. When a validator proposes a verified block, the blockchain awards them with transaction fees from that particular block.
Additionally, BSC is built upon the dual chain architecture so that users can transfer assets from one blockchain to the next in a seamless way.
Cosmos (ATOM) was designed as an interoperability platform for multiple blockchains to scale and work together. The blockchain aims to solve three common problems across majority blockchains: the limitation of sovereignty, scalability, and usability.
This project's end goal is to have multi-chains communicating with each other in a decentralized environment. The chains can transact with each other, process lightning-fast transactions and enable you to freely exchange assets and data across sovereign, decentralized blockchains.
Cosmos is a sort of Internet of Blockchains where developers can deploy blockchain applications that can work synchronously with each other.
Vechain is an enterprise-level blockchain for increasing efficiencies across supply chain management, logistics, and business processes. Supply chains are vast and complicated, hence the need for a distributed ledger technology to ensure a smooth transfer of value, transactions, and data.
The blockchain network has two distinct tokens:
VeChainThor Energy (VTHO) - used as a gas for driving smart contract transactions.
VeChain Token (VET) - the native token for transferring financial value across the blockchain.
Vechain provides a unique identity to physical products through Quick Response (QR), Near Field Communication (NFC), and Radio Frequency Identification (RFID) technologies. Sensors are spread throughout the blockchain to record product information at every stage of the supply chain process. These features enable efficient tracking across the entire supply chain and eliminate intermediaries from the process.
Ethereum remains the favorable blockchain network for the creation of decentralized applications. The recent surge of applications in DeFi built on the Ethereum blockchain network has subsequently led to network congestion. The increase in the number of users accessing Ethereum has further led to a steep rise in its transaction fees. For instance, it would cost $57 to swap 1 ETH to 2,040 DAI, while it would take less than $10 for the same transaction on the BSC network. While the upgrade to ETH 2.0 will solve the issues of scalability, the emerging blockchain networks are gaining popularity.
As we move forward, the need for protocols to interact with each other is rising. Features of interoperability and scalability offered by blockchains like Polkadot have become particularly valuable.