Stakely Blog
April 27, 2023

Modular Blockchains vs Monolithic Blockchains: Pros and Cons

April 27, 2023

When it comes to blockchains, there are typically two types to consider: monolithic and modular blockchains. Monolithic blockchains have one layer that handles everything from execution to consensus to data availability. In contrast, modular blockchains delegate these functions to separate and connected layers. It's important to understand the differences between these two types of blockchains, their unique features, and how they can impact the security, scalability, and flexibility of blockchain applications. Keep reading to learn more!

Modular Blockchain vs. Monolithic Blockchain

Before delving into the differences between modular and monolithic blockchains, let's first review the basics. A blockchain is a decentralized database built on a mathematical structure that securely stores data and openly shares it among users, publicly recording transactions made.

In the case of a modular blockchain, this architecture is divided into different modules or blockchains, each with a specific and separate function. Each module can be updated or replaced without affecting the functioning of the rest of the blockchain.

On the other hand, in the case of a monolithic blockchain, all components of the blockchain are integrated into a single structure, which means that any update or change to one component could affect the entire system.

Modular structure vs monolithic structure
Modular structure vs monolithic structure

What is a Monolithic Blockchain?

A monolithic blockchain is like a "Swiss Army Knife" of blockchains: it is a single piece of software that performs all functions at the same time. When Satoshi Nakamoto developed Bitcoin, he integrated all the functions of execution, consensus, and data availability into a single base layer. Therefore, Bitcoin is considered a monolithic blockchain structure. Did you know that?

How does a Monolithic Blockchain work?

As we said, in a monolithic blockchain, it is the chain itself that performs three main functions at the same time: execution, consensus, and data availability.

  • The execution function processes the transactions made by the nodes that make up the consensus in the blockchain. To perform this task, it is necessary to copy the blockchain, execute transactions, and confirm the generated blocks to store them in the network.

  • The consensus function establishes the rules of the blockchain. Nodes follow these rules rigorously both in verifying and validating blocks, ensuring that all nodes in the consensus network confirm the agreement with the blocks and transactions. They are responsible for ensuring true security and decentralization of the blockchain.

  • The data availability function ensures that transaction data is available. To achieve this, block producers must ensure that data is published for each block so that their peers (nodes) in the network can download and store it.

In summary, a monolithic blockchain is a single piece of software that performs all functions at the same time, while modular blockchains separate their functions into different modules. And although monolithic blockchains are more robust, they have difficulties scaling due to their unique structure. But don't worry, in the world of blockchains, there are options for all tastes and needs!

Let's see some examples of Monolithic Blockchains:

  • Bitcoin: the first and most well-known blockchain, is also a monolithic blockchain. As we already know, all functions of execution, consensus, and data availability are carried out in a single base layer. This structure makes the blockchain more resistant to malicious attacks and data corruption, making it one of the most secure blockchains in the market.

However, this architecture can also be a hurdle for network scalability. Due to the limitation in block size, the Bitcoin network can only process a limited number of transactions per second. Additionally, making updates to the Bitcoin blockchain can be a complex and risky process, as any mistakes could affect the security of the network.

  • Ethereum: another popular monolithic blockchain. Like Bitcoin, all functions are performed in a single layer. However, Ethereum has the ability to execute smart contracts, allowing developers to build decentralized applications on the network.

Although Ethereum is more scalable than Bitcoin, it still faces network congestion issues during times of high demand. The introduction of Ethereum 2.0 with a more modular architecture and the building of layer 2 protocols aim to address these issues and increase the scalability of the network.

What is a Modular Blockchain? Different Interpretations of Modular Blockchains

It is important to note that the term "modular blockchain" can have different interpretations. Generally, it is understood that a modular blockchain separates its main functions into different layers or modules within the same blockchain. Each layer or module is responsible for specific functions, such as executing smart contracts, processing transactions, consensus, and data storage.

However, it can also be interpreted that a modular blockchain refers to an independent blockchain that is complemented by other blockchains, delegating specific functions to each of them. In this case, a modular blockchain can connect with other blockchains through interconnection technologies and leverage their functions to improve its own scalability and flexibility.

In this article, we will focus on the second interpretation, interpreting a modular blockchain as one that offers one or two essential functions on its own, and connects with other blockchains to complement its capabilities. This way, we can explore in depth the advantages and disadvantages of this architecture, and understand how it can impact the security, scalability, and flexibility of blockchain applications.

How Modular Blockchains work?

Modular blockchains are like Lego pieces, they can be combined with others to create customized solutions. Instead of having a single monolithic blockchain that does everything, a modular blockchain is complemented with independent blockchains that perform specific functions, such as executing smart contracts, processing transactions, consensus, data storage, among others.

Lego Modular Blockchain
Lego Modular Blockchain

For instance, a modular blockchain can run the consensus function on one network and the execution function on another, as is the case in Celestia, thereby lightening the processing load.

By separating functions into different blockchains, they can be easier to update and modify without affecting each other, allowing for greater flexibility and adaptability. Thanks to this key feature, developers can continue to apply updates without having to make changes to the entire blockchain.

Celestia, the First Modular Blockchain

Celestia is a modular blockchain built entirely independently using Cosmos SDK. At its core, it focuses on consensus and data availability functions.

Celestia's developers define it as a minimalist layer 1 modular blockchain with a very clear goal: to allow any user to quickly implement a sovereign and decentralized modular or rollup blockchain without having to start a new consensus network. In other words, using Celestia.

To achieve this goal, Celestia has developed a modular software that allows building blockchains capable of separating the main functions between different pieces of software. In this way, users can fully customize the features and execution environments.


Advantages and Disadvantages of Modular Blockchains

As we saw earlier, modular blockchains are like the Transformers of blockchains; you can upgrade and improve each component without having to reboot and shut down the entire network. This means greater flexibility and adaptability for developers, and greater ease for users in adopting new solutions.

But wait, there's more! Modularity fosters collaboration and innovation throughout the network, resulting in greater independence of protocols and a smooth exchange of assets and information. In addition, bottlenecks in exchanges are eliminated, ensuring a constant and reliable flow of transactions!

However, modular blockchains also have their disadvantages, such as compatibility issues that may arise between different blockchains and the complexity in managing the network for less experienced users. Unlike monolithic blockchains, modular blockchains depend on other blockchains to ensure the security of the ecosystem. If the security layer (commonly responsible for consensus and data availability) is compromised, the entire network is at risk of collapsing.

Moreover, as developing technologies that generate complex systems, it is necessary not only to know the infrastructure of blockchains, but also the functionality and the development of standards that guarantee the security of processing in all interconnections of modular blockchains.

In summary, modular blockchains offer greater flexibility and adaptability, but also depend on other components to ensure the security of the ecosystem and can be more complex to develop and maintain than monolithic blockchains.

Modular Blockchains and the Blockchain Trilemma, One of the Biggest Challenges in the Crypto Industry

To wrap up, the blockchain trilemma states that a blockchain can only achieve two of the following three qualities in its development and growth: security, decentralization, and scalability. A great challenge, but you know what's interesting? This challenge applies to both monolithic and modular blockchains.

Both face the same challenge of balancing security, decentralization, and scalability. However, modular blockchains have an advantage as they separate functions into different layers, allowing them to focus on improving each function individually.

It is clear that both modular and monolithic architectures have their advantages and disadvantages in the world of blockchain. While monolithic blockchains offer an all-in-one and easy-to-use solution, modular blockchains allow for greater customization and flexibility. The choice of one architecture over the other will depend on the specific needs and preferences of each project. The most important thing is to understand the differences to make the best decision and ensure that a secure and scalable solution is being built!

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Gloria Zulay


Modular Blockchain vs. Monolithic Blockchain
What is a Monolithic Blockchain?
What is a Modular Blockchain? Different Interpretations of Modular Blockchains
Advantages and Disadvantages of Modular Blockchains

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