What are the ideas behind them, how are they run, what are some of the benefits and drawbacks?
2 Likes
This question is too broad, but I try to answer it as best as possible.
Bitcoin was created for financial freedom; the authors saw a problem with trust-based transactions that rely on centralized authorities (banks & governments) and wanted to fix that. Most blockchains followed the same ideology, with a few exceptions.
For example, ICP (Internet Computer Protocol) aims to create a decentralized computation framework. Filecoin, Sia, and Storj promote decentralized storage. Helium wants to make a network of decentralized communication infrastructures.
Decentralized blockchains need a consensus mechanism. Here decentralized means they don’t rely on a centralized authority to verify their transactions; instead, a network of volunteers analyzes and checks the validity of each transaction. Since these volunteers cannot be blindly trusted, each blockchain creates a specific mechanism to defend itself against bad actors in the network.
Bitcoin uses Proof-of-Work, where each node needs to run a computationally heavy task to find an answer to a puzzle. While this makes Bitcoin ultra-secure, it requires a lot of energy and power. The energy needed to run Bitcoin is much more than the energy that Austria or Portugal consumes in one year.
Each blockchain has its benefits and drawbacks; comparing them is like comparing apples and oranges. For example, you can’t compare Sia to Ethereum as they’re made for different purposes. In the case of Ethereum and other EVM blockchains, the underlying technology is mostly the same, and most blockchains differ in the consensus mechanisms they implement.
Different consensus mechanisms offer different levels of security and scalability. With Ethereum’s Proof-of-Stake, transactions take around 12 seconds to be verified and 5 minutes to finalize. With this model, if an attacker controls more than 51% of the Ethereum tokens, they can practically take over the network.
Avalanche uses a new consensus mechanism that makes it resilient to the 51% attack and much faster than Ethereum. On Avalanche, transactions take around one second to be verified and finalized.
Feel free to post more questions on this topic if anything specific remains unanswered.
4 Likes
I am curious. If Ethereum works on consensus mechanism, is it possible for a bad contract to be fixed with enough of the holders allowing it to be changed?
2 Likes
It is difficult to define what a “bad” contract is. Blockchain transactions follow specific rules, so it’s easy for the miners to verify them. The same isn’t true for contracts; they’re made to be flexible, and each one has its own “business logic” that is not easily verifiable by the miners.
Ethereum was made to have immutable contracts, and it’s not a part of their protocol to allow replacing the contract code after it is deployed. It’d cause more harm than good if they allowed that.
4 Likes
would like to see you explain how internet computer works, it is deeply intriguing tech imo
2 Likes