Blockchain technology provided an innovative solution to the problems of decentralization with the help of a unique architecture. It offers a decentralized ledger system that leverages cryptographic security to ensure integrity and immutability of your data. The architecture of blockchain is significantly different from traditional database structure as it includes a continuously growing chain of records, known as blocks.
People have been curious about queries like ‘What is the architecture of blockchain?’ to understand the reasons behind unique traits of blockchain. You might also have the same question when you find how a blockchain arranges verified transactions in a specific sequence to create a transparent and permanent record of all transactions. Let us learn more about blockchain architecture to discover its true potential.
Identifying Crucial Components in Blockchain Architecture
The first thing you need to understand blockchain architecture is the definition of the term. Blockchain architecture refers to the design of the structure for a peer-to-peer network of computers or nodes that works as backend for different systems and applications. The blockchain network works as a virtual machine without any central authority to manage communication between the nodes. The decentralized nature of blockchain ensures that it does not have a single point of failure, thereby ensuring better security.
As more people want to learn blockchain architecture, it is important to find the easiest approach to do the same. You can visualize blockchain architecture as an orchestra in which different players have unique roles. The different components in blockchain architecture work in unison to achieve the distinct traits offered by blockchain technology.
Core Components in Blockchain Architecture
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Nodes
The fundamental unit of blockchain architecture is a node, which is a machine on peer-to-peer networks of blockchain. Nodes are nothing but computers connected to the distributed network and the internet. The node also runs the core software that helps it in interacting with other nodes in the network. The primary functions of a node revolve around updating the decentralized ledger, storing it and sharing data with other nodes.
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Transactions
Transactions are the entries in the decentralized ledger of blockchain. You can find transactions that transfer value such as digital assets from one address to another. On the other hand, blockchain transactions can also bring changes in the state of smart contracts.
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Decentralized Ledger
The decentralized ledger or distributed ledger describes everything that you can expect in blockchain technology. It is a type of decentralized database that stores the chain of blocks that make up the blockchain. The decentralized ledger includes a chain of blocks beginning from the genesis block to the current block. The blocks are linked to each other with unique metadata that makes them immutable or completely immune to modification. It is important to note that the metadata refers to cryptographic hash of previous block, transaction data and a timestamp.
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Block
The fundamental concepts of blockchain architecture explained for beginners will also include references to the block. It is also a fundamental unit of a blockchain as blocks include a batch of transactions that the decentralized network must process and verify on the shared ledger.
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Consensus Protocol
You cannot think of creating a blockchain network without consensus protocols. The consensus protocol is a collection of rules that guide the interaction between nodes in the peer-to-peer network. Consensus protocols also dictate how the nodes in a blockchain network must agree on authenticity of transactions and their verification. Consensus protocols also define how the nodes should store transaction data on the decentralized ledger. The significance of consensus protocols also extends to determining the ways for executing smart contracts.
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Miners and Validators
The consensus protocol of a blockchain network also brings in miners and validators into blockchain architecture. Depending on the type of consensus protocol used in blockchain architecture, you can find miners and validators as the entities responsible for securing the network. Miners and validators are the nodes in the network who verify and validate transactions before adding them to the blockchain. You will find miners in Proof of Work consensus while validators are common in Proof of Stake consensus protocols.
Miners have to set up a dedicated machine for performing different functions such as verifying transactions through mathematical computations, transferring data and storing the decentralized ledger. The miner also receives rewards for their efforts in ensuring that only verified transactions are added to the blockchain.
Validators are also an important part of any blockchain architecture diagram for Proof of Stake consensus. The work of a validator is almost the same as that of a miner. However, validators don’t need advanced computing hardware like miners to solve mathematical puzzles for verifying transactions. On the contrary, they place a certain stake in the network to earn the rights to verify transactions on blockchain.
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Cryptography
Another notable component in blockchain architecture is cryptography. It is an important component for ensuring security and authenticity of transactions added to a blockchain. The two most crucial terms that you will find in cryptography for blockchain are public key and private key. Blockchain architecture leverages cryptography for ensuring security of data on the decentralized ledger and creating an addressing system.
Public-private key cryptography helps in creating different keys for encryption and decryption. The public key helps in encryption while the private key enabled decryption. The public key works like the wallet address where people can send information or assets. Private keys are similar to the password to your bank account as they help you access your data and funds on a blockchain. It is also important to note that private keys are also essential for authorizing certain actions on smart contracts.
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Unraveling the Layers in Blockchain Architecture
The review of the components in blockchain architecture creates curiosity about the layers you can find in blockchain architecture. You can find five blockchain architecture layers with distinct functionalities. The layers include hardware layer, data layer, network layer, consensus layer and application layer.
Hardware layer comprises of the network of devices that drive the computational power of blockchain or the nodes in the network.
Data layer in blockchain architecture is useful for storing transaction details such as public key of receiver, private key of sender and information of the assets transferred.
The network layer is responsible for managing interactions between different nodes in blockchain architecture.
The most important layer in blockchain architecture is the consensus layer. It is responsible for validation of blocks according to the type of consensus protocol used for a blockchain network.
The final layer of blockchain architecture, application layer, is the user-facing layer in blockchain. It serves as the playground for creating apps such as DeFi apps, NFT platforms, crypto wallets and decentralized apps.
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Discovering the Uniqueness of Different Types of Blockchain Architecture
Another crucial highlight in guides on blockchain architecture explained in simple terms is the explanation for different blockchain architectures. You will find three notable types of blockchain architecture, such as public, private and consortium architectures. The following sections can help you understand their unique traits and functionalities.
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Public Blockchain
As the name implies, public blockchain architecture allows anyone to participate in the network. You can set up a node to participate in public blockchain networks without the permission of anyone. Every participant can view transactions on the network, add transactions and work as a node to verify transactions.
Public blockchain networks don’t rely on any central authority, thereby ensuring safety from manipulation and censorship. On top of it, public blockchain also provides the assurance of immutability and transparency, thereby allowing everyone to verify transactions. Another crucial trait of public blockchain networks is the facility of incentives for network participants to work honestly.
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Private Blockchain
Private blockchain networks follow an architecture in which only a few selected participants can join the network. Accessibility to private blockchain networks is limited only to participants with approval. The responsibility of verifying and recording transactions in a private blockchain falls upon the approved participants.
Many organizations use private blockchain networks for internal record-keeping or in supply chain management. Private blockchain networks offer better control over participation alongside ensuring faster transactions. The primary focus of private blockchain revolves around privacy thereby reducing the level of transparency.
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Consortium Blockchain
The next important variant you must know about to learn blockchain architecture is the consortium blockchain architecture. Consortium blockchain networks follow a special architecture that brings in multiple organizations as the owners. Consortium blockchain architecture allows some predefined group of nodes to write transactions on the blockchain. With the consortium blockchain architecture, you can achieve higher security alongside safeguarding the principles of decentralization.
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Final Thoughts
The discussions about blockchain architecture must focus on the core components that make a blockchain network. You can build blockchain architecture with nodes, blocks, a decentralized ledger, and cryptography and consensus protocols. It is also important to note the significance of validators and miners in the architecture of a blockchain network. On top of it, you must also learn about the different types of blockchain architectures and their distinct traits. In-depth understanding of blockchain architecture provides an effective solution to identify the best architecture according to your needs.
