A look into different Blockchain Protocols

There have been many cases in technology where, after a period in which it spreads rapidly, different projects try to diversify on the main idea to cover specific necessities and aim themselves at more defined markets than the “jack-of-all-trades” offered initially. Computers are a great example, first with the popularization of laptops, and more recently with great advancements in occupation-oriented hardware (drawing pads, multiple monitors, etc.), to the point where your job or study field is one of the most relevant aspects to consider when buying a new one.

Blockchain is now going through this phase. After becoming popular with the spread of Bitcoin, different protocols have been created to further the reach of the technology, allowing it to disrupt into new markets were Bitcoin was not the best option.

Today we’ll look at the major protocols, which currently dictate how the cryptocurrency market moves in general, on what makes them different and the markets they are aimed at.




The second largest blockchain protocol in the world. Released in 2015, Ethereum’s focus is to offer a platform for everyone to create their own blockchain-based projects, giving them the tools necessary to code their own decentralized applications (DApps) that operate in the Ethereum environment.

The Ethereum blockchain is oriented towards the coding of “smart contracts”, which allow for the creation of virtually any kind of interaction between users, be it simple transactions of money in the form of a company-created cryptocurrency or using these tokens to charge for access to different features in a platform. These contracts are easy enough to code that every project can benefit from implementing them.

All the contracts are stored in the blockchain, and this allows for thousands of copies to be created simultaneously, which work as a security measure to avoid tampering or a one-sided change of terms.

Also, Ethereum has a slight advantage in terms of fees. As the users can program many different tasks to be performed using the Ethereum infrastructure, they offer flexible fees according to how much computing power the user needs. These fees are called “Gas” and can also work as a tool for the user to limit the processing power their platform can offer (to avoid possible exploits).

The most recent example, and probably the most talked about, of a company basing their blockchain implementation project on Ethereum is JP Morgan Chase, the banking giant that recently revealed their plans to develop a cryptocurrency, and this could pave the future for enterprise blockchain solutions.



Where Ethereum focuses on giving their audience the tools to create their blockchain-based projects, NEO (which began as AntShares in 2014) aims towards converting real life assets into digital assets by allowing processes like registration, transfer, trading and settlements to be performed virtually. NEO bases its service in 4 main points:

  • Digital Assets: converting real assets into digital by implementing smart contracts, which are decentralized, protected by law and safely stored in the blockchain.

  • Digital Identity: by offering solutions like facial, fingerprint and voice recognition, NEO enables the creation of digital identity cards for individuals, organizations, and many different entities.

  • The smart contracts in NEO, unlike in Ethereum, don’t require learning a new coding language, as these can be developed using C#, Java, and many other popular languages.

  • DApps: Much like Ethereum, the smart contracts in NEO allow for the creation of decentralized apps for different projects.

Another difference comes from the validation method, called Delegated Byzantine Fault Tolerance, in which the NEO holders vote to choose the nodes among those that meet the minimum requirements in performance, and in total maintain a defined number of NEO tokens. If the nodes achieve no consensus on the blocks, then another voting takes place to select the new nodes. This system offers the advantage of reducing the computing power necessary to maintain the blockchain, which translates into reducing the costs of keeping it working.

Since NEO is mostly localized in China, mostly companies within this country are partnered with it, and the largest examples are Alibaba (Chinese equivalent to Amazon) and Microsoft China.



The Ripple protocol has many similar qualities to both Bitcoin and Ethereum: decentralized, encrypted hashes, P2P network, etc. But it differs from them in its use, which is to allow global transfer of money, in the cheapest way possible, oriented towards financial organizations

To ensure this, they designed a new concept of ‘proof of correctness’ they dubbed the RPCA (Ripple Protocol Consensus Algorithm). It works in a similar way to the Bitcoin protocol, but instead on leaving the miners to solve the previous block to later be confirmed by others, every transaction is written on a list, on which each server votes on which are valid.

Each ‘round’ of voting has a certain threshold of ‘yes’ votes each transaction must achieve before moving to the next round, and if a transaction does not meet the requirement, it’s discarded or moved to a different list. The final round, for example, requires 80% of approval for a transaction to be applied to the ledger. This ledger, updated with the approved transactions, becomes the last-closed ledger, which is then distributed to every node, and so a new round begins.

Banks like PNC (US), Santander (Spain) and Standard Chartered (UK) are already offering services based on the RippleNet, due to the cost-efficiency and quick-response of the protocol they have developed.




Much like Ripple offers financial solutions for banks and other institutions, Stellar began after Jeb McCaleb left the Ripple team because he wanted to focus more towards individuals.

Funded by the Stellar Development Foundation, a non-profit organization in Delaware, Stellar has managed to develop their own consensus protocol and the open-source implementation that defines the Stellar Network.

Their validation process, which they coded from scratch, is called Federated Byzantine Agreement, where, unlike the traditional Byzantine Fault Tolerance (used by NEO), each node has its own list of trusted validators, and the overlaps within these lists is called the Quorum. This not only makes it even more decentralized, as there’s no authority to decide which nodes are trusted, but easier to create a node into the network (the only requirement is to be added into another node’s quorum slice).

Their most renown client is IBM, who use Stellar to power their Blockchain World Wire, a solution for cross-border payment for products and services.



All the previous protocols offer great solutions for individuals or startup projects, even Ripple being adopted by banks is customer-oriented, but an important step into fully embracing a technology of this kind is for big companies to adopt it. And this is where they come up with different features than what Bitcoin, Ethereum and Ripple can offer.


The Hyperledger Consortium (Linux, IBM, Intel, Cisco, American Express, etc.) is in charge of developing enterprise-oriented blockchains, and some of their projects, like Fabric and Sawtooth, share certain main characteristics:

  • Permissioned: Which means the blockchain is not open to the public. Any entity that would like to join it must gain a previous authorization by the organization.

  • Hierarchy-based: Not all nodes in the blockchain are equal. They are separated into roles, and each of these has different tasks and permits whether they act as clients (which create the transactions), peers (who maintain the ledger) and orderers (who determine the content of the updated ledger).

Because of this, Hyperledger is not recommended to be used for cryptocurrencies, and instead to be the foundation for internal operations and data storage within the companies that decide to implement it.




Cardano is certainly an interesting project, and it’s been growing in popularity and market value in the recent months. Even when it’s a smart contracts-based platform, like Ethereum, and it was founded by Charles Hoskinson, co-founder of Ethereum, Cardano’s philosophy is one of extreme maintenance and inspiring as much confidence as they can within the users.

The team wants to adhere to a set of principles that they believe can make a difference between them and other blockchain networks. Separation of accounting and computing, interdisciplinary teams, quick response to discovered issues, and learning from the mistakes and successes of hundreds of altcoins are some of these principles that Cardano wants to follow tightly.

The protocol they implemented to innovate in the validation process is called “proof-of-stake”, during which each coin holder has the chance to lock up some of their share to gain the right to validate the blocks, and depending on their work, this investment in returned. This fights the main problem with other platforms like Bitcoin, where the mining process relies completely on computing power, and that ends up with few mining companies dominating around 75% of the hashrate.

However, with mechanisms like Ouroboros (name given to Cardano’s consensus mechanism) the problem arises of giving too much power to the validators, so there are special measures that have to be taken for the system to work, like implementing randomness through Multiparty Computation, that makes it less probable for a single validator to determine the truth, but still leaves enough probability for agreement so the response time is not affected.


After all, every time a person or group considers that they can focalize the use of blockchain technologies towards a market that requires special attention or has necessities that need specific covering, a new project is due to rise from another.

Whether these succeed or not is never a certainty, and in a market as volatile as cryptocurrencies and blockchain is even harder to predict, but most of these are already linked to big enterprises, and that can work in their favor.