Comparison among various Blockchain Technologies — Part 1

Ethereum also uses a consensus on proof of work, similar to Bitcoin, to protect its chain. Miners use computer or card graphics computers (hash power) to overcome a system-set predetermined puzzle. Each puzzle is set to take approximately 15 seconds to solve mining rigs. Miners solving the puzzle build a block (and therefore receive compensation) so that the miner is responsible for putting any pending transactions in a block. Therefore, transactions paying higher rates are preferred by miners compared to miners paying lower rates regardless of how long a transaction is pending. Blockchain projects face a common set of scalability trilemmas in the industry: two architectures must choose between decentralization, scalability, and security. If anyone can access a network, a network is called decentralized, scalable when it handles enough transactions and secure when attacks can be avoided. The current agreement between Ethereum and proof-of-work prioritizes decentralization and safety at the expense of scalability, with a capacity of only 7–9 tractions per second as of January 2020. It is believed to be verified and applied to the blockchain with at least 51 percent of the network. When two miners solve the puzzle concurrently by chance — effectively creating their own block — then the block spreading first through 51% of the miners on the network will be added. All other blocks are called’ uncle bricks’ and their transactions are invalid. This validation method allows for circumstances in which the network is divided into two majority groups and each group decides to add its own block. The chain is divided into two sections, commonly referred to as a fork.

Ethereum architecture has three key components: clients, miners, and EVM (Ethereum Virtual Machine). There must be an Ethereum client installed to connect to the EVM in order to interact with the main blockchain. Currently, there are 15 + clients available — all intended to translate high-level code into a high-level bytecode for the EVM. Within Ethereum, transactions are used to store information and alter the state of the network–a transaction takes the form of any update to the core blockchain. A transaction typically takes the form of an intelligent contract that tells the EVM what to do. When a user generates a smart contract, it is forwarded to the client (either the user-hosted or a trusted third party), adding it to the memory pool. When the miners build a new block, they pick transactions from the pool and confirm that the network status will be updated when the block is validated.

Safety of Ethereum can be divided into two parts: safety of the core chain and safety of an application. As a rule of thumb, a chain becomes safer when computational power (hash) is increased with regard to core chain security. This is because it is very difficult for any group to get 51 percent of the chain’s calculation strength. In the case of a miner with a computing capacity of 51% in the chain, they will compromise the protection of a reverse package by allowing the transactions to double spending, effectively by making the same collection of coins available for multiple transactions a double expenditure. The protection of the application involves two types of attacks: errors causing mischievous or catastrophic failure and malicious attacks. Bugs in application code can lead to potential attacks mainly due to the absence of security checks before an app is released. There are intentional assaults when an attacker tries deliberately to deceive the code. The DAO attack is a famous example when an attacker found a flaw in the software code and began draining the fund — the main Ethereum chains that process and implement encryption have no security issues. When cyber auditing companies emerge, malware threats on the application have decreased dramatically.

The core Ethereum chain processes a block of transactions every 10–15 seconds, but the industry generally requires a certain number of successive blocks as ‘confirmations.’ It roughly takes around five to six minutes to confirm (finalize) a transaction once users submit it to the chain (assuming that the transaction is paying fees that are on par with others in the ecosystem). Yet, the security measures taken by implementers can vary these confirmation times greatly.

In the next part of this blog, we will see other Blockchain technologies — EOS, Hyperledger, Bitcoin, NEO.

Stay tuned!