Blockchain is an underlying technology for cryptocurrencies, which has become the primary way to show how finance, healthcare, and many other industries work. They provide an effective way of recording business transactions, private records, etc. 

Blockchain architecture is quite interesting, but what are the main things we should know about it in 2022?

Let’s read more about it in this article to find out what to expect this year!

blockchian architechture

What type of architecture will design a blockchain? 

The blockchain architecture is a chain of blocks where the block itself is a database that contains digital information. The chain uses cryptographic functions where the data chain is shared in distributed networks with multiple nodes. 

Each node in the database architecture plays the primary role of a network administrator who joins a network voluntarily. Nevertheless, there’s no centralized info within a blockchain architecture, so it’s quite impossible to hack one, but a small percentage still exists. 

What are the four types of blockchain architecture? 

In the blockchain architecture, there are four popular types of blockchains you can use: 

Private blockchain

These will operate on a closed network and are the best for private organizations. Organizations usually use blockchains for customizing security options, authorization preferences, and more. 

Public blockchain

Bitcoin was initially created on a public blockchain. Public blockchains are excellent for eliminating security issues and centralization. Public blockchains were also why Distributed ledger technology (DLT) became popular. Through DLT, data is stored in multiple locations rather than a single one. 

Consortium blockchain

Possess both public and private components. Initially, they are pretty complex to set up but offer higher security levels than the other networks. As a result, they are commonly used for collaboration amongst multiple organizations. 

Permissioned blockchain

These blockchains are also known as “Hybrid blockchains,” which are only accessible with authorization. Organizations will usually use these to create better structures and allow limited network participation within the blockchain architecture. 

Considering this information, some may assume that there are three types of blockchains within their architecture and some four. Consortium and permissioned blockchains are sometimes considered as one because of their similarities. 

What are the five key components of a blockchain system? 

The blockchain architecture works in a way that delivers a more effective way of record keeping and data storage. Data within a blockchain is decentralized, transparent, and immutable. Blockchain technology isn’t anything new but a more efficient and secure way of recording and conducting transactions. 

Let’s dive deeper into seeing what the five blockchain components of the blockchain architecture are: 

  • Distributed Ledger (DL): A database that contains all transactions which are continuously updated. Multiple blocks are linked in a chain using cryptography. The problem with this is that if a previous block had an issue, the current ones would also be affected. 
  • P2P Network: A P2P network is a decentralized model used for communicating between many participants, known as peer nodes, that don’t depend on other nodes. After the network is created, all participants have their own ledger copy. 
  • Consensus Mechanism: Defines a set of rules so the nodes within the P2P network can sync and agree on which transactions can be added to the blockchain. 
  • Cryptography: Ensures security and verification of all the information transmitted between each node. Cryptography is the main reason blockchains are nearly impossible to hack, all because of their encryption methods. 
  • Virtual machine: A virtual machine is the same as a desktop you would use. It can be used for storing data, running application programs and allowing blockchain networks to operate with other virtual machines. 

What are the new usage methods of blockchain architecture? 

Blockchains are used for transparency, visibility, and for tracing performed transactions. It’s considered an affordable option and impacts suppliers.

Banking & Finance

Most companies in this industry are already implementing blockchain technology in their everyday operations. Banks use blockchain technology to automate the process and provide a better user experience. The most common technology in Banking & Finance is Decentralized Finance (DeFi), which is changing how we use financial apps and how they work. 


Most hospitals that run out of equipment might be required to call other hospitals for help. Blockchains can set up a network where hospitals can share information with each other on what their needs are. Additionally, if any illegal actions occur, the blockchain can find this out too. 

Real estate

Real estate agents have identified that blockchain technology is useful in optimizing profits. Currently, some of the biggest issues in the real estate department are the amount of time it takes to process transactions, and the longer it takes, the more chance there is that fraud will occur. Blockchain technology creates trust for this part and is prioritized in property management. 

Supply chain line

Blockchain technology is commonly used for supply chain management and seeks to coordinate any changes made within the supply chain. Every business needs supply chain management and it’s quite a field in which many companies don’t have enough experience. Blockchain allows you to track goods from the source of the delivery address. Therefore, making you fully aware of your supply chain. 

Power distribution

Without power, technology won’t function. Power distribution is an important factor and blockchain technology helps you improve your electricity distribution, p2p energy trading, and more. 

Why is Blockchain such a popular type of technology? 

Let’s take transactions within a blockchain architecture as an example. In the everyday world, if you are thinking about transferring money to a family member or even friend, you’ll go to your bank account online and do so. After you finish this, your bank will inform you about the updated transaction record. This is the regular way of making money transfers. 

However, the blockchain architecture is built differently. Third-party applications have evolved to such an extent, but because of them, blockchain was initially created. So the real question is why blockchain has become so popular over the years. Well, it’s primarily because of how advanced it’s in data record keeping and handling payments. 

The overall concept of blockchain avoids long processing times and seeks to improve transactional speeds. Not only does this save you lots of time, but it increases security levels and even saves you money in the long term. 

Many people might think you can use Bitcoin and Blockchain interchangeably, but it’s not exactly the way it seems. Blockchain technology can support many applications related to several industries, such as healthcare, power distribution, and more, but Bitcoin (BTC), on the other hand, is just a cryptocurrency dependent on blockchain technology’s security. 

For instance, if you buy BTC with a credit card, the transactional security level during the process depends on the blockchain. That’s why they can’t be used interchangeably. 

What technologies are used in a blockchain? 

Furthermore, here are the three types of technologies used within the blockchain architecture: 

  • Security levels (cryptographic keys): Blockchain technology provides every transaction with a digital signature, which prevents fraud and makes it nearly impossible for it to happen or even for the data to be corrupted. 
  • P2P Network: Digital signatures are merged with a P2P network, where many individuals will act as authorities that use digital signatures to conduct transactions. 
  • Automation (computing): This can generate automatic payments, events, systematic actions, and more. In other words, blockchain users will use cryptography keys for performing digital interactions within a P2P network.

Which blockchain is the best? 

There are several platforms you can use that support the blockchain architecture. Of course, all of them have their own uniqueness, but to make things more simple for you, here are two platforms we recommend you use:

  • Ethereum blockchain: This is the most decentralised blockchain platform. If you want to create a dapp, we highly suggest you to use Ethereum. However, the transaction fee at peak, goes off the roof.
  • Binance smart chain: Built on Web3, this blockchain has one of the most users. This platform allows you to buy, sell cryptocurrencies, NFTs, stake crypto and much more. Furthermore, you can also build games and decentralized finance apps. 

What did we learn about blockchain technology? 

We come to an end for this article. We learned a lot about blockchain architecture. The way it works, the advantages and challenges it holds, the common types of blockchain technologies, and why it’s becoming so popular nowadays. 

We can never stop learning about blockchain architecture, but a good lesson we should be aware of is how fast it is spreading and how popular its becoming. Many top companies use blockchain technology; we expect it to be entirely driven by AI in the future. 

However, we must wait and see what the future holds to confirm this! 

Article credit: Tony Ademi