The Evolution of Blockchain Architecture
This module introduces the core differences between monolithic and modular blockchain design. It explains why blockchain architecture matters, the limitations of monolithic systems like Ethereum and Bitcoin, and how modular systems break apart execution, consensus, and data availability into independent layers. The section sets the stage for understanding why modularity is critical for scaling blockchains while preserving decentralization.
Why Blockchain Architecture Matters
The architecture of a blockchain network defines how it processes data, achieves consensus, manages smart contracts, and ensures availability. While blockchain is often discussed in terms of decentralization or cryptographic security, the underlying architectural design is what determines whether a blockchain can scale, support new applications, or remain truly decentralized as usage grows. The significance of blockchain architecture becomes evident when networks face congestion, high transaction fees, or centralization risks—issues that stem directly from how the layers of a blockchain are structured and interact.
In the early phases of blockchain adoption, networks like Bitcoin and Ethereum operated with what is now referred to as a monolithic architecture. This means that a single blockchain handled all three essential functions—executing transactions and smart contracts, reaching consensus on the order of events, and making the transaction data available to network participants. While this model is simpler and effective for early use cases, it becomes a bottleneck as demand increases. As more users transact on-chain or interact with decentralized applications (dApps), a monolithic design can result in slower throughput, higher gas fees, and increasing hardware demands on validators and nodes. These technical constraints limit accessibility for both users and developers, ultimately impacting decentralization.
The challenges of blockchain performance and cost are not isolated problems—they are systemic consequences of how the network is architected. For instance, Ethereum’s rise in popularity also revealed the limitations of its monolithic design. During peak activity, users often face extreme fees and delayed confirmations. These issues are not caused by bad code or poor user behavior, but by the architectural decision to bundle execution, consensus, and data availability into a single system. Upgrades like Ethereum’s rollup roadmap and Layer 2 adoption are direct attempts to offload parts of this workload and move toward a more modular design without replacing the base chain entirely.
Blockchain architecture also affects flexibility. A tightly coupled system leaves little room for innovation at the protocol level. Developers working on decentralized applications are constrained by the execution environment and throughput limitations of the host blockchain. In contrast, an architecture that allows modular composition—where different components such as execution or data availability can be selected independently—provides developers with greater autonomy. This can lead to more specialized chains tailored to specific use cases like gaming, finance, or social networking.
Moreover, architectural design has long-term implications for decentralization. If running a full node requires powerful hardware due to increasing data requirements, then fewer individuals will be able to participate, giving rise to validator centralization. A blockchain that remains accessible to light nodes, without sacrificing trust assumptions, is more likely to retain a diverse and resilient network.
In sum, blockchain architecture is not a technical detail that can be ignored or abstracted away. It is a foundational design choice that directly impacts scalability, cost-efficiency, developer experience, and network security. As blockchains evolve to support more complex and global applications, the shift from monolithic to modular architecture is becoming a central focus of innovation—and Celestia is one of the first projects to embody this shift at the core protocol level.
What Are Monolithic Blockchains?
Monolithic blockchains are networks where all core functions—transaction execution, consensus, and data availability—are handled within a single, vertically integrated system. These networks process every part of the blockchain lifecycle in one place. Rather than separating duties into modular layers, the same group of nodes or validators performs all operations.
Bitcoin and early Ethereum are the most well-known examples of monolithic blockchains. In these systems, miners or validators are responsible for validating transactions, achieving consensus, and making transaction data available to the rest of the network. Ethereum also runs smart contracts and decentralized applications (dApps) directly on its main chain, adding to the computational load of each full node.
Benefits of Monolithic Systems
One benefit of monolithic architecture is its simplicity. A single protocol layer provides a complete environment for deploying applications. Security is centralized under one validator set, which protects all layers uniformly. Developers and users interact with a coherent stack, without needing to understand how different layers communicate or coordinate.
Scalability Limitations and Centralization Risks
However, monolithic designs face significant performance and decentralization challenges. Every full node in the network must process every transaction, store all historical data, and execute every smart contract. As activity increases, this places a growing computational and storage burden on nodes. Over time, only well-funded actors can run full nodes, leading to centralization of infrastructure and governance.
Scalability is also constrained. To maintain decentralization, block sizes and gas limits must remain relatively low. But this limits transaction throughput, causing congestion and high fees. Ethereum’s network congestion during periods of high usage is a well-documented outcome of these trade-offs.
Limited Flexibility for Developers
Another drawback of monolithic blockchains is the limited flexibility they offer to developers. The execution environment, virtual machine, transaction logic, and fee model are all determined by the base chain. Developers cannot easily introduce new features, execution models, or performance optimizations. Any protocol upgrade requires broad consensus and often a hard fork, which can be time-consuming and politically difficult.
Shifting Away from Monolithic Constraints
To address these issues, Ethereum and other blockchains are gradually adopting modular elements. Ethereum’s rollup-centric roadmap, for instance, delegates execution to external rollups while the base chain maintains consensus and data availability. This represents a partial departure from the monolithic model and highlights the growing interest in more flexible, scalable blockchain architectures.
Modular Blockchain Design
Modular blockchain design represents a shift away from the all-in-one architecture of monolithic systems. Rather than having a single chain handle all responsibilities, modular design separates blockchain functions into distinct layers or modules. Each module is responsible for a specific role—such as executing transactions, reaching consensus, storing data, or settling transactions—and can be optimized independently. This separation of concerns allows networks to scale more efficiently while remaining flexible and decentralized.
Core Components of a Modular Blockchain Stack
In a modular architecture, the blockchain stack is typically divided into four functional layers: execution, settlement, consensus, and data availability.
Execution layer
The execution layer handles transaction processing and smart contract logic. This is where decentralized applications run and business logic is enforced. Developers can choose or build execution environments tailored to specific use cases, whether that’s a general-purpose virtual machine or a custom-built runtime.
Settlement layer
The settlement layer acts as a final arbiter for transaction validity. It verifies proofs submitted by execution layers and ensures that state transitions are consistent. Settlement layers may also provide dispute resolution mechanisms in case of fraud or invalid transactions.
Consensus layer
The consensus layer is responsible for ordering transactions and producing blocks. This layer determines the canonical chain and ensures that all participating nodes agree on the block sequence.
Data availability layer
The data availability layer ensures that the full contents of each block are available to all network participants. This prevents malicious actors from hiding or withholding data necessary for validating transactions. A secure and scalable data availability layer is crucial for supporting external execution environments, such as rollups.
Advantages of Modular Blockchain Design
Modular architecture introduces several key benefits over monolithic systems. First, it enables scalability by design. Each module can scale independently according to its own requirements. For instance, a data availability layer can optimize for bandwidth and storage, while an execution layer can focus on computational throughput.
Second, modular systems support greater decentralization. Light clients can interact with individual modules without running full nodes. For example, thanks to innovations like Data Availability Sampling (DAS), users can verify that block data is available without downloading the entire block. This lowers the barrier to participation and supports a wider distribution of validating nodes.
Third, modular design allows for flexibility and innovation. Developers are no longer constrained by the limitations of a single base chain. They can mix and match execution environments, plug into different data availability providers, or customize settlement logic. This creates a more diverse ecosystem of blockchains, each tailored for specific needs—from high-speed gaming networks to privacy-focused financial applications.
Lezione 1:The Evolution of Blockchain Architecture
Lezione 2:Understanding Celestia’s Role in Modular Design
Lezione 3:Inside Celestia’s Architecture
Lezione 4:Celestia in Action — Ecosystem and Use Cases
Lezione 5:Outlook, Challenges & Competitive Landscape
The Evolution of Blockchain Architecture
This module introduces the core differences between monolithic and modular blockchain design. It explains why blockchain architecture matters, the limitations of monolithic systems like Ethereum and Bitcoin, and how modular systems break apart execution, consensus, and data availability into independent layers. The section sets the stage for understanding why modularity is critical for scaling blockchains while preserving decentralization.
Why Blockchain Architecture Matters
The architecture of a blockchain network defines how it processes data, achieves consensus, manages smart contracts, and ensures availability. While blockchain is often discussed in terms of decentralization or cryptographic security, the underlying architectural design is what determines whether a blockchain can scale, support new applications, or remain truly decentralized as usage grows. The significance of blockchain architecture becomes evident when networks face congestion, high transaction fees, or centralization risks—issues that stem directly from how the layers of a blockchain are structured and interact.
In the early phases of blockchain adoption, networks like Bitcoin and Ethereum operated with what is now referred to as a monolithic architecture. This means that a single blockchain handled all three essential functions—executing transactions and smart contracts, reaching consensus on the order of events, and making the transaction data available to network participants. While this model is simpler and effective for early use cases, it becomes a bottleneck as demand increases. As more users transact on-chain or interact with decentralized applications (dApps), a monolithic design can result in slower throughput, higher gas fees, and increasing hardware demands on validators and nodes. These technical constraints limit accessibility for both users and developers, ultimately impacting decentralization.
The challenges of blockchain performance and cost are not isolated problems—they are systemic consequences of how the network is architected. For instance, Ethereum’s rise in popularity also revealed the limitations of its monolithic design. During peak activity, users often face extreme fees and delayed confirmations. These issues are not caused by bad code or poor user behavior, but by the architectural decision to bundle execution, consensus, and data availability into a single system. Upgrades like Ethereum’s rollup roadmap and Layer 2 adoption are direct attempts to offload parts of this workload and move toward a more modular design without replacing the base chain entirely.
Blockchain architecture also affects flexibility. A tightly coupled system leaves little room for innovation at the protocol level. Developers working on decentralized applications are constrained by the execution environment and throughput limitations of the host blockchain. In contrast, an architecture that allows modular composition—where different components such as execution or data availability can be selected independently—provides developers with greater autonomy. This can lead to more specialized chains tailored to specific use cases like gaming, finance, or social networking.
Moreover, architectural design has long-term implications for decentralization. If running a full node requires powerful hardware due to increasing data requirements, then fewer individuals will be able to participate, giving rise to validator centralization. A blockchain that remains accessible to light nodes, without sacrificing trust assumptions, is more likely to retain a diverse and resilient network.
In sum, blockchain architecture is not a technical detail that can be ignored or abstracted away. It is a foundational design choice that directly impacts scalability, cost-efficiency, developer experience, and network security. As blockchains evolve to support more complex and global applications, the shift from monolithic to modular architecture is becoming a central focus of innovation—and Celestia is one of the first projects to embody this shift at the core protocol level.
What Are Monolithic Blockchains?
Monolithic blockchains are networks where all core functions—transaction execution, consensus, and data availability—are handled within a single, vertically integrated system. These networks process every part of the blockchain lifecycle in one place. Rather than separating duties into modular layers, the same group of nodes or validators performs all operations.
Bitcoin and early Ethereum are the most well-known examples of monolithic blockchains. In these systems, miners or validators are responsible for validating transactions, achieving consensus, and making transaction data available to the rest of the network. Ethereum also runs smart contracts and decentralized applications (dApps) directly on its main chain, adding to the computational load of each full node.
Benefits of Monolithic Systems
One benefit of monolithic architecture is its simplicity. A single protocol layer provides a complete environment for deploying applications. Security is centralized under one validator set, which protects all layers uniformly. Developers and users interact with a coherent stack, without needing to understand how different layers communicate or coordinate.
Scalability Limitations and Centralization Risks
However, monolithic designs face significant performance and decentralization challenges. Every full node in the network must process every transaction, store all historical data, and execute every smart contract. As activity increases, this places a growing computational and storage burden on nodes. Over time, only well-funded actors can run full nodes, leading to centralization of infrastructure and governance.
Scalability is also constrained. To maintain decentralization, block sizes and gas limits must remain relatively low. But this limits transaction throughput, causing congestion and high fees. Ethereum’s network congestion during periods of high usage is a well-documented outcome of these trade-offs.
Limited Flexibility for Developers
Another drawback of monolithic blockchains is the limited flexibility they offer to developers. The execution environment, virtual machine, transaction logic, and fee model are all determined by the base chain. Developers cannot easily introduce new features, execution models, or performance optimizations. Any protocol upgrade requires broad consensus and often a hard fork, which can be time-consuming and politically difficult.
Shifting Away from Monolithic Constraints
To address these issues, Ethereum and other blockchains are gradually adopting modular elements. Ethereum’s rollup-centric roadmap, for instance, delegates execution to external rollups while the base chain maintains consensus and data availability. This represents a partial departure from the monolithic model and highlights the growing interest in more flexible, scalable blockchain architectures.
Modular Blockchain Design
Modular blockchain design represents a shift away from the all-in-one architecture of monolithic systems. Rather than having a single chain handle all responsibilities, modular design separates blockchain functions into distinct layers or modules. Each module is responsible for a specific role—such as executing transactions, reaching consensus, storing data, or settling transactions—and can be optimized independently. This separation of concerns allows networks to scale more efficiently while remaining flexible and decentralized.
Core Components of a Modular Blockchain Stack
In a modular architecture, the blockchain stack is typically divided into four functional layers: execution, settlement, consensus, and data availability.
Execution layer
The execution layer handles transaction processing and smart contract logic. This is where decentralized applications run and business logic is enforced. Developers can choose or build execution environments tailored to specific use cases, whether that’s a general-purpose virtual machine or a custom-built runtime.
Settlement layer
The settlement layer acts as a final arbiter for transaction validity. It verifies proofs submitted by execution layers and ensures that state transitions are consistent. Settlement layers may also provide dispute resolution mechanisms in case of fraud or invalid transactions.
Consensus layer
The consensus layer is responsible for ordering transactions and producing blocks. This layer determines the canonical chain and ensures that all participating nodes agree on the block sequence.
Data availability layer
The data availability layer ensures that the full contents of each block are available to all network participants. This prevents malicious actors from hiding or withholding data necessary for validating transactions. A secure and scalable data availability layer is crucial for supporting external execution environments, such as rollups.
Advantages of Modular Blockchain Design
Modular architecture introduces several key benefits over monolithic systems. First, it enables scalability by design. Each module can scale independently according to its own requirements. For instance, a data availability layer can optimize for bandwidth and storage, while an execution layer can focus on computational throughput.
Second, modular systems support greater decentralization. Light clients can interact with individual modules without running full nodes. For example, thanks to innovations like Data Availability Sampling (DAS), users can verify that block data is available without downloading the entire block. This lowers the barrier to participation and supports a wider distribution of validating nodes.
Third, modular design allows for flexibility and innovation. Developers are no longer constrained by the limitations of a single base chain. They can mix and match execution environments, plug into different data availability providers, or customize settlement logic. This creates a more diverse ecosystem of blockchains, each tailored for specific needs—from high-speed gaming networks to privacy-focused financial applications.