From monolithic to modular ―how the Ethereum blockchain became adaptable but vulnerable

The Ethereum blockchain originated from the idea that it could serve more than just financial transactions. Vitalik Buterin envisioned his network as home to decentralized applications and a place of continuous development made through hard forks. From that point, Ethereum increased in popularity and function, becoming one of the most extensive blockchain networks on the market that holds dApps, DAOs, NFTs and many other digital assets.

However, this massive expansion led to further challenges. Although Binance data shows anyone could learn how to buy Ethereum in simple steps and acquire it fast, other factors pose risks to investors and developers, such as scalability, cybersecurity and increased complexity.

Considering the newness of the industry and the blockchain as well, Ethereum isn’t that easy to update when issues arise. But there’s a roadmap implemented that will deal with each problem one by one. What’s sure is that the network’s development depends heavily on the blockchain, and Ethereum was part of different systems that led its way.

Ethereum used to be a monolithic blockchain

When Ethereum was designed, it started as a monolithic blockchain. It was part of the first blockchain generation, such as Bitcoin, that laid the foundation for the current cryptocurrency world. The technology works based on a single structure layer that handles the execution of transactions, consensus mechanisms, and data maintenance.

These blockchains also leverage one database where transactions are stored. Therefore, the design is quite limited in terms of versatility and scalability, becoming outdated in comparison with new blockchains.

A monolithic blockchain’s work settlement

We’ll analyze Bitcoin as a network to exemplify how such a blockchain works. First, its transaction data is held on the Bitcoin blockchain, so all nodes can access it, allowing even users who download the blockchain to view data.

When it comes to executing transactions, Bitcoin helps users initiate them while nodes verify them. Ultimately, the mining process solves the safety aspect. Bitcoin uses the PoW consensus mechanism, which requires intensive mining, while the settlement system handles the end of the transaction, where the block is added to the blockchain.

There are a few benefits of the monolithic blockchain, including the following:

• Simple architecture with few components that decreased the chances of vulnerabilities to be exploited;
• Consistent work across the blockchain based on rules that help stabilize the network;
• Secure ecosystems due to massive decentralization, making it more challenging to alter them into centralization;

However, monolithic blockchains aren’t perfect because they:

• Limit creativity through the lack of flexibility;
• Expose the network to attacks due to a single consensus method;
• Can’t be upgraded easily as many components are interconnected;

Ethereum became modular after the Merge

Hence, a monolithic blockchain might not be as efficient as it used to be in relation to increasing networks and communities. That’s when modular blockchains come into play. These are completely different from their previous peers because they help distribute work across the ecosystem.

A modular blockchain is created to provide efficiency and adaptability, which supports innovation. Therefore, these blockchains can be modified easily and adjust their structure in relation to technology changes.

One of these modular blockchains is Ethereum, which changed sides after the Merge, an important update that made it more sustainable and scalable. Modular blockchains have similar features as monolithic ones.

A modular blockchain is structured

Modular blockchains deal with transaction execution differently, based on smart contracts. Parallel blockchains, or shard chains, handle transactions to improve scalability and process them more efficiently. Shard chains are also responsible for data availability since is spreads it across several blockchains. Ethereum uses the PoS consensus mechanism, which ensures security and network integrity, while PoS help the settlement to make transactions irreversible.

Modular blockchains are advantageous because:

• They’re highly scalable due to multiple layers through which data storage is decentralized;
• They provide top-notch security by sharing it across networks;
• They can adapt to improve collaboration and interoperability;

Still, modular blockchains struggle with the following:

• Their security can be compromised by bridge vulnerabilities;
• They are complex to build and maintain;
• Their updating plans are challenging to handle;

Are monolithic and modular blockchains better together?

Although both blockchain technologies have their ups and downs, one cannot be useful without the other, as they complement each other’s issues. In the future, it’s expected that these technologies will work together, as monolithic chains are more secure and modular ones are easier to scale.

What’s certain is that security will remain the main goal for every type of blockchain because this is what makes it trustworthy. Otherwise, investors will not be confident in laying out their assets in risky ecosystems as they will fear disruptions.

Still, there are many approaches to how a monolithic or modular blockchain would look like. For example, besides Bitcoin, Ethereum 1.0 is considered monolithic, as it has slow transaction speeds and works towards decentralization. There’s also Solana, the blockchain that has achieved massive scalability and low decentralization costs.

On the other hand, other modular blockchains include Celestia and Polygon Avail, which are known for their consensus and data availability features in which they order transactions and interpret them for execution. Such blockchains are usually used as rollups for other massive chains because they can improve scalability.

When choosing a blockchain for a crypto project, you must understand its capabilities because they can drive its success or failure. For instance, DeFi applications might need a monolithic blockchain to ensure security and availability to investors. Yet, operations based on cheap and fast features can leverage modular blockchains for high optimization. Regardless, there are plenty of blockchains to choose from, so you can find what suits your project best.

Final considerations

Blockchains are complex but impressive ecosystems where developers can work together towards a common goal while maintaining these networks. Blockchains can start as monolithic, such as the Bitcoin blockchain, with features of security and limited creativity. Blockchains can also be modular, like in the case of Ethereum, where scalability is at its peak, but their complexity makes them difficult to approach. In the future, both types of blockchains will operate.