What distinguishes Bitcoin from Ethereum, Ethereum from Solana, and Solana from Avalanche? While numerous factors differentiate these blockchain platforms, one foundational distinction—the choice between a single-chain or a multi-chain architecture—carries significant implications for their performance, scalability, and adaptability. Proponents of the single-chain system tend to support its benefits for global decentralization and shared security, whereas multi-chain systems are heralded for opening the door to compliant chains tailored to specific regulatory environments. Today, we are going to dive deeper into the differences between these two architectures.
For those new to blockchain, consider starting with our introductory blog post here to get up to speed.
Single-chain Blockchains:
In a single-chain blockchain architecture, there is one primary blockchain where all data is recorded. Bitcoin, Ethereum, and Solana are examples of single-chain blockchains. In a single-chain blockchain, all participating nodes (validators) validate every transaction and block added to the chain. This approach ensures a cohesive ecosystem where transactions and applications follow the same rules and protocols, simplifying interactions and integrations. However, this unity also means that the blockchain's performance directly affects all applications built on it. A significant challenge for single-chain blockchains is network congestion, resulting from all transactions and smart contract executions occurring on the same chain, leading to slower transaction times and higher costs as the blockchain grows in transaction volume and size.
Multi-chain Blockchains
In a multi-chain blockchain architecture, multiple interconnected blockchains operate simultaneously, each potentially tailored for specific uses or applications. Although they operate independently, these chains link back to a main (primary) chain. Avalanche and Cosmos are examples of multi-chain blockchains. This structure diverges from the single-chain model by allowing applications to tailor their blockchain. This customization is essential for various reasons, including regulatory compliance, fee structure adjustments, speed, interoperability, and more. With transactions and smart contract executions distributed across independent chains, high activity on one does not impede another, addressing network congestion issues. The ability to customize a blockchain that remains connected to the main network combines the security and decentralization of the main network with the tailored benefits of having a specific-use chain.
The multi-chain model is particularly suited for institutional applications. For instance, institutions in the U.S. face different regulatory requirements than those in the EU or Russia. Utilizing Avalanche’s multi-chain architecture, known as subnets, institutions can specify their validator sets' geographic locations, pre-approve wallets to ensure only verified users interact with their chain, select desired fee structures, decide between public or private chain settings, among other options.
Again, the difference between single-chain and multi-chain structures is just one of the many factors to consider when doing your due diligence on various chains.
