Blockchain model comprises date, network, consensus, incentive, contract and application layers from bottom to top.
The first is data layer, which includes the underlying data blocks in a chain structure, related asymmetric public and private keys encryption, and timestamp technology. It is the most bottom layer of data structure in blockchain. These technologies are the base to build the global financial system, which have been proven to be highly secure and reliable through decades of use. And blockchain just integrates all these together.
The second is network layer, which includes P2P networking, data transmission, and data verification mechanisms. The P2P networking mechanism is early adopted in P2P download applications like BT, which means the blockchain technology has self-organizing network function.
The third is consensus layer, which includes various consensus algorithms for nodes on the network. Consensus algorithms are the core technology for blockchain, since it determines who keeps records, which would influence the security and reliability for the whole system. So far, there have been over 10 consensus algorithms, with Proof of Work, Proof of Stake, and Delegated Proof of Stake the most popular ones. Data, network and consensus layers are the essential elements to build blockchain technology, the lack of any one will never make a true blockchain.
The fourth is incentive layer, it integrates economic factors into the blockchain system, including issuance of economic incentives and allocation mechanism, which mainly occurs in public chain. In public chain, incentives must be provided to the participating nodes who follow the regulation, while punishment be imposed to the violators, so as to let the whole system grow in a virtuous circle. However, in private chain, it is not necessary to offer incentives, because the nodes, participating in the record-keeping, usually complete their competition off the chain forcibly or voluntarily.
The fifth is contract layer, which includes different kinds of scripts, algorithms and smart contracts, it is the basis for blockchain programmable feature. While Bitcoin blockchain has the function to write simple scripts, the Ethereum significantly improved this programming language protocol, with which theoretically can write and implement applications with any function. If we refer to bitcoin as a global ledger, the Ethereum is then a global computer, with which anyone can upload and execute any kind of applications, and ensure the efficiency at the same time.
The sixth is application layer, which includes various application scenarios and use cases, for example, the blockchain applications built on the Ethereum are deployed on this layer, as well as the future programmable finance and society.
The incentive, contract and application layers are not necessary for each blockchain application, that is to say, some blockchain applications don’t include the three later layers. Got it?