Overview of all Blockchain Research Topics
The following insights into more than 15 important blockchain research fields make this the perfect place to familiarize yourself with different blockchain topics. Blockchain is based on decades of research in various areas. Introductions, summaries, overviews of existing blockchain research and video collections enable everyone to become topic experts no matter what learning style they prefer.
What is Blockchain?
A blockchain is a growing list of records, called blocks, that are linked using cryptography. By design, blockchains are immutable and resistant to the modification of data. Blockchain is also an enabler for communities, the decentralized Web, token economies, and peer-to-peer exchanges of data on a global scale.
Blockchain technology is based on multiple existing technologies. The success of a blockchain ecosystem is impacted by a large number of success factors. Layer 1 DLT protocols such as Bitcoin and Ethereum have achieved a lot but not all inherent limitations can be solved by one blockchain protocol. For example, it is extremely difficult to improve throughput without compromising security. Secure, efficient layer 1 blockchain protocols must either solve critical issues on the protocol level or enable solutions on another layer.
Currently, we are witnessing a rapidly evolving Web 3 tech stack of compatible protocols and components. New blockchain research is conceptualized and being integrated with existing and new layer 1 DLT protocols, layer 2 protocols, tools, and applications. The detail pages of each blockchain research topic include a brief description of the research fields, a summary of existing knowledge, tables with relevant blockchain research, and a collection of videos to make it very easy for everyone to familiarize themselves with these topics.
Selected Blockchain Insights
Security is the most important factor for any blockchain protocol to establish a trustless environment.
Millions of datasets are exchanged through blockchain technology – often in a transparent public ledger. The value of blockchain is based on immutability of records and resulting trust in the truth of records. Cryptography, consensus, governance, and many other factors have an impact on core blockchain security. Privacy of users, legal and operational impact must also be considered to build sustainable, scalable and compliant applications.
Blockchain & Decentralization
Decentralization is important to create a secure, non-discriminatory system.
Instead of relying on a central authority to transfer values to others, blockchain utilizes a peer to peer network and consensus algorithms to validate transactions and record data. A permissionless public network should aim for architectural, political and logical decentralization.
Blockchain networks need to process many transactions, be maintainable, and extensible.
It seems impossible to achieve security, decentralization and scalability in blockchain networks. Most people refer to the scalability problem as the limited rate at which networks can process transactions. It is also important to find sustainable solutions to run blockchain networks without excluding parties.
Blockchain & Cryptography
Cryptography is a key part of blockchain technology and used in various ways.
Public-key encryption is used for blockchain wallets and transactions, cryptographic hashes link each block to the previous block, and Merkle trees organize transactions. Among other things, secret sharing algorithms and zero-knowledge proofs are currently investigated and highly relevant for blockchain and Web 3 apps.
Consensus mechanisms are used to achieve agreement on a single data value or state of the network.
Consensus algorithms in blockchain must be efficent and solve the “Byzantine Generals Problem” which describes a situation in which potentially unreliable, unkown actors agree on a concerted strategy in order to avoid catastrophic failure. By now, there are many more consensus mechanisms than Proof-of-Work or Proof-of-Stake.
Tokenomics or Token economics describes the economics in the token ecosystem.
Economics focuses on the behaviour and interactions of agents and how economies work. Tokenomics is the quality of a token and the incentive system in a network to help build the ecosystem around the underlying project of that token.
A smart contract is a self-executing, coded contract with pre-defined terms.
A smart contract may facilitate the execution of a contract through automation and without interference. Lots of research is going into how to create smart contracts, how to make smart contracts safe, maintainable or updateable.
Blockchain networks should be open systems, enable communication and intereraction with other protocols.
Today’s blockchain landscape is fragmented, with partially incompatible technologies being available to potential users. Interoperability between blockchains was initially not foreseen in protocols but we are seeing a paradigm shift and functionalities such as cross-blockchain token transfers, as well as cross-blockchain smart contract invocation and interaction are being implemented.
Governance is challenging for all organizations & communities – and especially difficult in decentralized settings.
Governance in blockchain comprises all of the processes of governing – whether undertaken by all participants, a foundation or companies – over the blockchain network whether through code, on-chain or off-chain voting, laws or norms. There is no perfect solution but interesting ideas, research and implementations.
Blockchain & Privacy
Blockchains must keep records but respect the privacy of participants and comply with the “right to be forgotten”.
Privacy is the ability to seclude information about yourself. Achieving reasonable privacy or anonymity with Bitcoin and other blockchains is complex and perfect anonymity may be impossible. Pseudonymous, cryptographic addresses are utilized in blockchain networks but the ledger, records of accounts and metadata of transactions are publicly visible in most networks.
Blockchain Ecosystem development
Building a thriving ecosystem is key for the long-term success of blockchain projects.
The blockchain ecosystem consists of thousands of projects. Each of the protocols needs to attract developers, users and projects. In order to achieve true decentralization of the network and great adoption there must be clear value propositions, onboarding strategies, incentive mechanisms on- and off-chain – some can be adopted from open-source communities or existing businesses.
Web 3 Business Models
Blockchain and Web 3 enable new business & revenue models.
Web 2 is called “platform economy” where you’d read and create content on platforms such as Facebook and Youtube. Web 3 is called “token economy” since it allows reading, writing and the value transfer through tokens. New business models, different value chains and adaptations from existing business models are expected.
Blockchain & Regulation
Blockchain and the crypto industry has to comply with existing legislation.
The blockchain industry enjoyed freedom of an unregulated market for some time which also led to scams and harm of investors. By now, regulators have charged multiple projects for offering unregistered securities, evaluated how legislation such as GDPR may be applied, and started introducing blockchain-specific regulation where needed, for example for tokens & STOs.
There are significantly different blockchain & DLT implementations.
In the past years, we’ve witnessed the improvements of core protocols through soft and hard forks, the emergence of new distributed ledger technologies and teams re-writing code from scratch. The trend is going towards an advanced, multi-layered stack and modularity of components.
Blockchain developers can either contribute to core protocol development or build dApps.
Blockchain is a specific database system. When working with blockchain technology it is important to understand the properties, features and limitations of blockchain and smart contracts. Requirements for blockchain devs vary but it’s getting easier and easier to join!
Tooling for blockchain
Tools for blockchain development, experimentation, and collaboration in distributed teams are rapidly evolving.
More and more collaboration and communication tools such as Github, Slack, Hubspot or Asana improve our work processes. Essential blockchain tools are block explorers and wallets. Other tools such as testnets, online IDEs, prototyping tools or browser extensions are important to improve the usability for developers and users alike.
Blockchain Fundraising – ICO, IEO, STO and more
Blockchain enables widespread crowdfunding and new funding possibilities for all sorts of projects.
An initial coin offering or initial currency offering is a type of funding using cryptocurrencies. It became well known during the boom of unregulated crowdfundings in 2017. Regulation is tougher now but blockchain projects have various possibilities to raise funding besides ICOs – for example with IEOs, STOs, crypto VCs or funds.
The valuation of DLTs is a challenge but many investment theses and some KPIs have evolved by now.
Public permissionless DLTs and many dApps utilize tokens to secure the network and to incentivize network participants. The valuation of a crypto-asset fundamentally depends on the nature of the crypto asset – whether it’s a cryptocurrency, utility token or security token. Investors have started investing in tokens & equity.
The blockchain market is less mature and less regulated than traditional markets which attracts traders.
Crypto trading involves exchanging one cryptocurrency for another, buying and selling coins, and exchanging fiat money into crypto. Trading is possible peer-to-peer, through OTC desks and (de-) centralized exchanges which offer tools for traders. Before trading, one should learn about the market, practice, define the purpose for trading and always consider their finances.