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…In doing so, it not only lightens the workload on the mainnet, but also maintains the same security and decentralisation standards of the underlying Ethereum blockchain. Layer-1 vs Layer-2 Blockchains Layer-1 refers to the distributed database itself — the network that brings all of the blockchain’s nodes together into one system with its underlying consensus mechanisms. For example, Bitcoin’s Layer-1 is the Bitcoin network, which uses a Proof of Work (PoW) consensus mechanism; Ethereu…
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…In doing so, it not only lightens the workload on the mainnet, but also maintains the same security and decentralisation standards of the underlying Ethereum blockchain. Layer-1 vs Layer-2 Blockchains Layer-1 refers to the distributed database itself — the network that brings all of the blockchain’s nodes together into one system with its underlying consensus mechanisms. For example, Bitcoin’s Layer-1 is the Bitcoin network, which uses a Proof of Work (PoW) consensus mechanism; Ethereu…
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…On-Chain vs Off-Chain Cryptocurrency Transactions: What Is the Difference?Level UpNEWIndividualsBusinessesDevelopersDiscoverCompanyUNIVERSITYBlockchain5 Jan 2024|INTERMEDIATE|5 MIN READOn-Chain vs Off-Chain Cryptocurrency Transactions: What Is the Difference?Learn the differences between on-chain and off-chain cryptocurrency transactions and how they work on the blockchain. Key Takeaways: On-chain transactions occur directly on the blockchain, while off-chain transactions occur outside the main …
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…What Are Sidechains? Scaling Blockchain on the SideLevel UpNEWIndividualsBusinessesDevelopersDiscoverCompanyUNIVERSITYBlockchain4 Feb 2021|INTERMEDIATE|3 MIN READWhat Are Sidechains? Scaling Blockchain on the SideRead on to learn what sidechains are, how they work, and which crypto projects are using them. Key Takeaways: A sidechain is a separate, independent blockchain linked to the main blockchain (mainchain) using a two-way bridge.It enables tokens or other digital assets to be transferred be…
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…This consensus mechanism allows for ‘timestamps’ to be built directly onto the blockchain itself, informing the network that transactions occurred in a particular order without the need for confirmation from other nodes. This reduces the processing weight of the blockchain, making it faster and more energy efficient than many other consensus mechanisms. PoH relies on a fairly new cryptographic concept — Verifiable Delay Functions (VDFs), which require the running of a specific number of s…
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…While similar, it is not the same as producing a hash in a Proof of Work (PoW) consensus mechanism, as a prover cannot simply increase computational power to accelerate the sequential process.In cryptocurrency, VDFs play a crucial role in processes like generating randomness for selecting block producers or validators in a fair and transparent manner. By incorporating VDFs into blockchain protocols, cryptocurrency networks can achieve better security against manipulation and collusion while main…
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…If they engage in malicious behaviour or fail to validate (e.g., by going offline), a portion of their stakes could be taken away. PoS is just one of many consensus mechanisms that blockchains employ to verify transactions before they are added to the blockchain. Some blockchains, such as Ethereum, which transitioned to PoS in 2022 (called ‘The Merge’), require validators to stake a large amount of native tokens. In Ethereum’s case, the current minimum requirement is 32 ETH. However, the…
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…Federated BFT (fBFT) A succinct definition of Federated BFT (fBFT) Federated BFT (fBFT)Level UpNEWIndividualsBusinessesDevelopersDiscoverCompanyGLOSSARYFEDERATED BFT (FBFT)Copy linkShare on TwitterShare on FacebookShare on LinkedinFederated BFT (fBFT)Federated Byzantine Fault Tolerance (fBFT) is a consensus mechanism designed to enhance scalability, security, and decentralisation in blockchain, particularly in networks where a federation of trusted nodes participates in validating transactions.A…
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…By eliminating intermediaries, Bitcoin enables fast and low-cost transactions, financial inclusivity, and greater transparency. These factors also mirror public criticism of the global financial system at the time of Bitcoin’s launch — soon after the 2007–08 global financial crisis. Bitcoin Blockchain Technology Bitcoin is based on a technology called blockchain, which is governed by a consensus mechanism. In simple terms, a blockchain notes down all transactions in a digital ledger, whi…
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…By eliminating intermediaries, Bitcoin enables fast and low-cost transactions, financial inclusivity, and greater transparency. These factors also mirror public criticism of the global financial system at the time of Bitcoin’s launch — soon after the 2007–08 global financial crisis. Bitcoin Blockchain Technology Bitcoin is based on a technology called blockchain, which is governed by a consensus mechanism. In simple terms, a blockchain notes down all transactions in a digital ledger, whi…
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