What Is A Blockchain Protocol?
A protocol is a system of rules that allows two or more entities of a communications system to transmit information. Some internet protocols include IP, HTTPS, and DNS.
For blockchains, it allows nodes to communicate information, building a distributed database of a system’s ins and outs. Databases are the backbone of a blockchain and permit the exchange of digital currency.
Protocols allow decentralization within a system, setting the rules for how a system is governed and maintained through consensus. All nodes agree upon the rules which include a process for validating transactions, a mechanism for nodes to communicate, and an application programming interface (API) to integrate all of the features.
Every protocol defines rules specific to the goals of the system. For Ethereum, its protocol is based on smart contracts and decentralized finance, and for Bitcoin, it is facilitating transactions between peers.