Definition and Classification of Public Blockchains
Blockchain is a decentralized, tamper-proof distributed ledger secured by cryptography. Its key features include decentralization, immutability, collective maintenance, and transparent rules. Blockchains are categorized into three types: public, private, and consortium chains, differing in decentralization levels, transaction speeds, and node permissions.
Public blockchains allow anyone globally to read, send transactions, and participate in consensus. They serve as foundational architectures—similar to mobile operating systems like iOS or Android—enabling blockchain commercialization.
Leading Public Blockchains
Prominent public chains include ETH, TRON, EOS, NEO, and others. Among these, ETH, TRON, and EOS dominate with over 90% market share in DApp adoption, active users, and transaction volume.
| Blockchain | 2019 Transaction Volume | Key Characteristics |
|------------|------------------------|----------------------|
| ETH | $12.8 billion | High decentralization; Diverse DApps (gaming, finance); High fees |
| TRON | $4.4 billion | High user activity; Dominated by lottery/risk DApps |
| EOS | $6.1 billion | No transaction fees; Innovative DApp development |
Core Mechanisms of Public Blockchains
1. Consensus Mechanisms
Public chains rely on consensus algorithms to validate transactions. The primary models are:
- POW (Proof of Work): Energy-intensive (e.g., Bitcoin).
- POS (Proof of Stake): Favors wealth concentration.
- DPOS (Delegated Proof of Stake): Faster but lower voter participation.
2. Incentive Systems
Nodes earn token rewards for maintaining network security (e.g., validating transactions or reporting vulnerabilities).
China’s Public Blockchain Industry Chain
Upstream: Infrastructure Providers
- Mining Hardware: Dominated by Bitmain, Canaan, and Ebang (90% market share).
- Servers: Huawei, Inspur, and H3C hold 62.8% of China’s server market.
- Cloud Services: Alibaba Cloud, Tencent Cloud, and AWS lead with >60% combined share.
Midstream: Public Chain Developers
- Cost Structure: 50% R&D, 30% marketing, 15% infrastructure.
- Developers: Focus on scalability and cross-chain interoperability.
Downstream: Ecosystem Participants
- DApps: Gaming (11.5% users), finance (12.5%), and lottery (32.5%) dominate.
- Exchanges: Binance and Huobi are top platforms for token trading.
- Users: Mostly male (26–39 years), with 10% being blockchain enthusiasts ("geeks").
Market Size and Growth
China’s public blockchain sector grew at a 292.8% CAGR (2015–2019), reaching $2.39 billion**. By 2024, it’s projected to hit **$9.5 billion (31.9% CAGR).
| Segment | 2019 Market Share |
|---------------|-------------------|
| ETH | 54% |
| EOS | 27.2% |
| TRON | 18.8% |
Challenges and Solutions
- Speculative Risks: 80% of chains are "zombie chains" with no real utility.
- Innovation Gaps: Over-reliance on existing codebases limits differentiation.
- Scalability: ETH handles <20 TPS; solutions like DSC algorithms and cross-chain tech are in development.
Government Policies
China enforces strict anti-speculation laws while encouraging R&D in blockchain efficiency and security.
Future Trends
- Optimized Consensus: Balancing security, speed, and decentralization.
- Cross-Chain Tech: Enabling interoperability between disparate blockchains.
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FAQs
Q: What’s the difference between public and private blockchains?
A: Public chains are open to all (e.g., ETH), while private chains restrict access (e.g., enterprise solutions).
Q: Why is ETH’s transaction speed slow?
A: Its POW mechanism prioritizes decentralization over speed, limiting TPS.
Q: How do public chains generate revenue?
A: Primarily through token sales and transaction fees.