Monolithic vs. Modular: An In-depth Comparison of Different Blockchain Designs

Feb 6, 2024

As blockchain technology evolves, various ideas have emerged for processing the increasing number of transactions, resulting in different design approaches. While many blockchains adopt a monolithic design, the modular design is gaining attention. But what are the charms of these two different designs, and how do they affect blockchain users? To delve deeply into their characteristics, merits, and demerits, let's compare monolithic and modular blockchains.

Basic Components of Blockchain

Regardless of the design type, it's essential to understand that blockchain has four main elements: execution, settlement, consensus, and data availability.

  • Execution: This function ensures the correct execution of transactions on the blockchain. It includes processes such as executing smart contracts, moving assets, and recording data.

  • Settlement: Refers to the process where executed transactions are officially recorded on the blockchain's ledger. The information recorded on the blockchain ledger becomes immutable.

  • Consensus: The process of forming an agreement among different participants in the blockchain network about the legitimacy of transactions and the current state of the blockchain. This maintains the blockchain’s stability and security.

  • Data Availability: Guarantees that data on the blockchain is accessible to participants and ensures that all participants can operate based on the same information, securing transparency.

Blockchains function through these elements, ensuring their reliability and transparency. The handling of each component changes depending on the design type.

What is a Monolithic Blockchain?

Overview of Monolithic Blockchain

The monolithic blockchain is one of the design approaches for blockchain. 

The characteristic of the monolithic design is that it consolidates all the functions mentioned in the main elements, such as processing transactions, recording data, maintaining security, and the network's consensus mechanism on a single layer. This means all functions related to the blockchain are processed within the same protocol.

Pros and Cons of Monolithic Blockchain

The merit of the monolithic design is its orderly and understandable system since all functions are processed on a single layer. Furthermore, this integrated design enhances network security, data consistency, and the overall integrity of the blockchain.

However, the system's concentration on a single layer has demerits. This leads to the so-called "trilemma" problem, where strengthening scalability, decentralization, or security weakens the other elements. This "trilemma" is a challenging issue for monolithic blockchains, and much research and development are being conducted to resolve it.


What is a Modular Blockchain?

Overview of Modular Blockchain

Modular blockchains have been adopted, especially in new blockchain projects in recent years.

The hallmark of modular design is the distribution of each principal component across different layers for processing. This means that the modular design, where each function is processed independently, fundamentally differs from the monolithic design that constructs the entire system as a single unit.



Pros and Cons of Modular Blockchain

The modular design, characterized by distributing each function across different layers for execution, addresses the "trilemma" issue that traditional blockchains have faced.

Specifically, as the load from increased transactions grows, it's possible to scale each layer individually, making scalability expansion easier. Since multiple independent layers function separately, each node doesn't need to hold all the data, reducing barriers to participation. This makes it easier for many individuals and organizations to join the network's operation, thereby promoting network decentralization.

So, if one layer encounters a problem, it doesn’t affect the other independently operating layers, allowing for a robust security system against failures.

However, because each layer functions independently, the overall system's complexity increases. This increased complexity may make it more challenging for app developers to understand, manage, and maintain it. Additionally, the modular blockchain's recent history and the shortage of developers capable of constructing it can be considered negative factors.



Choosing Between Monolithic and Modular Designs

Newer blockchain technologies like NERO employ modular designs for flexibility and scalability. When selecting a blockchain, users should evaluate factors such as design philosophy, flexibility, scalability, security, and development and maintenance complexity. 

In summary, monolithic blockchains offer a simple, integrated system with proven technology but limited scalability and flexibility. While newer and more complex, modular blockchains provide improved scalability, enhanced decentralization, and robust security without significantly increasing system complexity.

Monolithic vs. Modular: Which is better?

Considering the differences, advantages, and disadvantages of monolithic and modular blockchains, the question of which is better for a particular use case is raised.

Here are some factors to consider: 

Design Philosophy

Monolithic blockchains perform all transaction processing on a single layer, creating a unified system where all elements are closely integrated. Conversely, modular blockchains process each function on separate layers, addressing the concern of transaction processing concentration on a single layer that may occur in monolithic designs.

Flexibility and Scalability

Monolithic blockchains offer limited flexibility, as scaling requires modifications to the entire system. Modular blockchains, however, offer superior flexibility, as individual layers can be scaled separately.

Security

The overall security of a monolithic design depends on the system's overall strength. In contrast, modular designs can minimize the impact of issues in one layer on others, thereby limiting the effect on the entire system.

Development and Maintenance Complexity

Monolithic blockchains' development and maintenance are relatively straightforward. However, because all elements are integrated, changes can impact the entire system. Modular blockchains, while potentially more complex in development and maintenance due to their independent layers, offer the advantage of allowing updates or improvements in one part without affecting others.

Conclusion

The choice between monolithic and modular blockchains depends on the users' specific needs and priorities. Users who value simplicity prefer the monolithic design for a more integrated approach. On the other hand, the modular design is best for flexibility, scalability, and the ability to isolate paramount issues. Each approach has its merits and demerits, and the decision should align with the user's goals and the specific use case of the blockchain.

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