The Blockchain Technology Stack

Arun Devan
4 min readNov 3, 2017
Photo by Tim Trad on Unsplash

The blockchain operates on a technology stack that includes the following components:

Blockchain Technology Stack

In the next couple of sections — starting from the bottom of the stack — I will elaborate on the technology layers that support blockchain applications.

The Internet

The Internet is the foundational technology layer. It is a network of networks of global interconnected devices (computers, smartphones, IoT devices, etc) that relies on the Internet Protocol Suite (TCP/IP) that defines how data should be packetised, addressed, transmitted, routed and received.

When the World Wide Web (WWW) or Web version 1 (Web1) was invented in 1989, it facilitated the Internet of Information. Web1 provided the framework to define web resources (documents and other media) and to access these resources by their Uniform Resource Locators (URLs).

By the early 2000s, with advancing technology, the WWW saw an upgrade to Web version 2 (Web2). This gave rise to the Internet of Interactions that supported higher order services like social media and ecommerce. Peer-to-Peer (P2P) interactions grew rapidly and were facilitated by large organisations acting as intermediaries. These intermediaries built platforms that profited from the content generated and shared by subscribers; largely through targeted advertising.

There is a growing number of people who describe the current version of the Internet as Web version 3.0 (Web3) — the Internet of Value. The blockchain protocol is behind this transformation where P2P interactions can be completed without intermediaries. The bitcoin, the best known blockchain application today, enables value (in the form of cryptocurrency) to be transferred between individuals without the need for a whole strata of financial intermediaries — multiple banks and settlement institutions. The same blockchain technology may lead to the development of social media applications without the need for Facebook and Twitter, ride sharing applications without the need for Uber and Grab, accommodation sharing without Airbnb and multimedia sharing without YouTube. This will lead to a truly Decentralised Web.

The Blockchain Protocol

The blockchain protocol operates on the Internet through a peer-to-peer network of computing devices (the nodes) that execute the protocol, completing transactions based on a cryptographic consensus algorithm on identical copies of the distributed ledger of these transactions hosted on this P2P network of devices.

The protocol builds an open, shared and trusted public ledger of transactions that is not controlled by a single entity. These recorded transactions cannot be changed and can be inspected by anyone. The protocol provides sufficient economic incentives to the owners and operators (the miners) of the computing devices to sustain the cryptographic transactions in the distributed ledger. These incentives are represented in the form of tokens.

In the case of the bitcoin network, the bitcoin token determines the circumstances under which new transaction blocks are validated before they are appended to the blockchain ledger.

For additional details, review these stories: The Blockchain Demystified and Different Blockchains for Different Folks

The Application Layer

The bitcoin, the first and best known blockchain application, has developed on the ‘native’ blockchain protocol for most of its existence; except for recent changes introduced in the form of forks. The bitcoin network lead to the development of a Decentralised Autonomous Organisation (DAO) with the disintermediation in the transfer of value as currently seen in centralised financial structures with national/regional bankers, banks, settlement agencies and other financial intermediaries. DAOs allowed people to contribute to the development of economic value through cryptographic tokens generated in an open transparent network without the need for formal contracts or agreements.

For more complex blockchain based applications to develop, it was necessary for an evolutionary step to occur to go beyond consensus algorithm computation and data storage.

Ethereum lead the innovation into the development of a custom built public blockchain that executes smart contracts — applications that run as programmed on a P2P network that is not subject to fraud, interference or downtime. With Ethereum, tokens have moved up the technology stack and can be issued as DAO or distributed application (dApp) tokens. dApps provide the framework to support more complex services in the form of smart contracts. These smart contract tokens are critical to the continued development of blockchain based applications.

The User Experience

The underlying technology layers in the blockchain technology stack have supported the development of applications that we use in our day to day activities. Increasingly, we will witness the continued development of dApps accessed by specialised dApp browsers on our device of choice.

Use cases for blockchain applications are rising as more people become familiar with the technology. You may review the following stories to get an overview of current blockchain applications: Emerging Use Cases for the Blockchain (Part 1) and Emerging Use Cases for the Blockchain (Part 2)

This story has relied extensively on information from the following references:

  1. Wikipedia
  3. The Ethereum Project

If you enjoyed this story, please click the 👏 button and share to help others find it! Feel free to leave a comment below. Thanks for reading!

A version of this story has also been published in Steemit.

Please check out my other Medium posts covering the blockchain topic:

  1. A Personal Roadmap to Understanding the Blockchain
  2. The Blockchain Demystified
  3. Different Blockchains for Different Folks
  4. Emerging Use Cases for the Blockchain (Part 1)
  5. Emerging Use Cases for the Blockchain (Part 2)



Arun Devan

Web3 explorer. Mentor with Enterprise blockchain trainer.