Monolithic vs Modular Blockchains: Pros and Cons

Monolithic and modular blockchains are two different approaches to building a blockchain infrastructure. Monolithic blockchains have all the components of their blockchain in one single codebase. In contrast, modular blockchains allow for more flexibility by allowing developers to create individual modules that they can independently upgrade or replace.

Background

Blockchain networks have four primary functions: consensus, execution, data availability, and settlement.

When a network has all of these functionalities in its base off-chain layer, it is known as a monolithic blockchain. This form of blockchain follows a one-size-fits-all approach toward modularity between users and services.

Suppose an implementation contains only some of these functionalities in its base layer and uses other off-chain layers to complete the process. In that case, a modular blockchain enables users to utilize different combinations of components across their applications. By having an array of selectable elements across their networks, users can determine their best combination and create efficient methods tailored to the individual’s needs – providing more flexibility than the one-size-fits-all approach of monolithic blockchains.

Blockchain functions include:

1. Execution – is essential for ensuring that only valid transactions are executed and result in proper state machine transitions.

2. Settlement- provides an environment to verify proofs, resolve fraud disputes, and bridge between other execution layers.

3. Consensus -assists in agreeing on the order of transactions across the blockchain network.

4. Data availability- is a critical factor for all aspects of a blockchain network; it ensures that the transaction data is always available and accessible.

The blockchain trilemma

The blockchain trilemma is the inability of a blockchain protocol to achieve scalability, decentralization, and security simultaneously.

1. Security is essential for the network to be able to survive an attack. However, there is no compromise for safety, so the trade-off is between decentralization and scalability.

2. Decentralization denotes the control one user can have over the system.

3. Scalability allows the blockchain to handle additional data while not becoming too resource-intensive.

These three principles must all work together in a delicate balance for a blockchain system to succeed.

Simultaneously addressing a single-layer monolithic network’s speed, security, and decentralization is impossible. To tackle this problem, developers proposed an alternate design consisting of multiple layers that they would use to execute all four functions.

They refer to the concept as ‘monolithic vs. modular blockchains’; one layer focuses on two properties while another focuses on optimizing the third property. This approach facilitates an optimized environment that allows developers to address properties such as speed, security, and decentralization in the most efficient way possible with minimized conflicts in underlying codebases and reduced complexity across network nodes.

Modular blockchains are an exciting solution to this problem since they allow for more flexibility by allowing different network parts to be optimized independently based on the application’s needs.

Monolithic blockchains

Monolithic blockchains are composed of one independent component, providing all the critical features required for a blockchain system. The base consensus layer is responsible for data availability, transaction settlement, and execution.

As these layers are tied together with no or minimal differentiation, developers cannot separate them from each other within the same system. The most well-known monolithic blockchain architecture is that of Bitcoin, which can provide its users with reliable digital asset storage and reliable fund transfers. In this structure, every function lives inside a single boundary and produces consistent outcomes, as the main component supervises every task required for a process.

Pros

Monolithic blockchains are easier to deploy and maintain a blockchain network since all components are in one codebase. In addition, the infrastructure allows quick deployment times, reduced maintenance costs, and a simplified user experience.

Cons

Cons of monolithic blockchains include:

1. The inflexibility of monolithic blockchains can lead to a lack of innovation and slow development cycles due to the difficulty in enhancing existing features or adding new ones.
2. It also increases the risk of potential failure as all components are tied together and rely on a single codebase.
3. The difficulty of increasing transaction throughput in the network limits the scalability of monolithic chains. As a result, it is challenging to switch technologies when needed.
4. These chains can experience exponential growth as they conduct more transactions and store them, requiring even more powerful hardware for nodes.
5. Node source limits such as limited bandwidth or storage can ultimately affect the blockchain’s efficiency.

Modular blockchains

Modular blockchains are rapidly becoming more and more popular due to the simple fact that they grant users greater flexibility in terms of how they execute their transactions.

This structure allows for the blockchain’s consensus and data availability layers to be separate from the execution layer, meaning that blocks no longer need to test a limited number of transactions or fit within a small space. Instead, nodes can execute transactions independently of one another.

A modular architecture for blockchain networks uses sidechains or layer 2 (L2) channels to decentralize and optimize responsibilities.

Each of the particular sidechains or L2s tackles specific areas, such as transaction execution, that are too strenuous for the mainchain while maintaining its positive qualities like speed and security.

Mainchain is ultimately responsible for settling the consensus in operations across all the sidechains/L2s within the network. By this method, blockchain networks can successfully scale without sacrificing reliability or decentralization.

Three prominent examples of blockchains structured this way are Cosmos, Fuel, and Celestia, which may serve as precursors for the future of blockchain technology.

Pros

Pros of modular blockchains include:

1. Modular blockchains offer greater flexibility since developers can create modules independently. As a result, upgrading or replacing individual components is easier without rebuilding the entire system.
2. They make it much easier for developers to add or modify new features without requiring a complete rework of the codebase.
3. Modular structures make it easier to scale up the network, as developers can add new modules without difficulty. Finally, they are less prone to failure as individual components are not connected, so a single fault does not affect the entire system.

Cons

Cons of modular blockchains include:

1. The main con of modular blockchains is that they require more resources to be built and maintained as the complexity increases with each new feature.
2. They are complicated for users, as understanding how individual components interact can take time and effort.
3. Modules may only sometimes be compatible, leading to unforeseen issues when put to the test.
4. They require more computing power and bandwidth as each node must process multiple transactions simultaneously.
5. They require more sophisticated coding and are more complicated for developers to create and maintain. In addition, as the network grows, so does its complexity which can increase the risk of unforeseen bugs in the code.
6. They are less secure than monolithic ones due to their lack of control over each module’s codebase.

Conclusion

Modular blockchains are becoming increasingly popular due to their flexibility and scalability. While they may require more resources and come with their own unique set of risks, these types of networks can help developers overcome the limitations posed by traditional monolithic chains.

Ultimately, modular blockchains provide an alternative approach to building distributed ledger technology and allow users to customize their blockchain network according to their needs. As such, they hold great promise for future applications.