What is the Protocol in Crypto? Protocol features and applications (2022)

In Crypto, one of the terms that you hear the most, is probably Protocol. So what is protocol? What are the characteristics? Please find out through the article below.

What is the Protocol in Crypto?

A protocol is a foundational layer of code that tells how something should work. Protocols are the foundation of any application.

A Protocol project in Crypto is a project dedicated to developing the optimal protocol for a specific purpose. To be faster, applications can use these protocols to develop their applications instead of rebuilding from scratch.

Features of Protocols in Crypto

The Protocols in Crypto (cryptocurrency protocol) only allow certain applications to work – sometimes only the application of the cryptocurrency itself. Protocols that provide security and access to a blockchain.

Protocol in Crypto allows users to manage their data. They allow individuals to create accounts – or wallets – on a protocol that can then be used to pay for services and perform financial transactions on other websites. This helps users not to be controlled by third parties in the storage of assets.

Excluding the Blockchain Platform (Blockchain is also a Protocol), Protocol projects will play a role in the middle Blockchain Platform and DApp. Dapps want to build on a certain Blockchain, they can use the services that Protocol projects provide.

Difference between Internet Protocol and Crypto Protocol

The main difference between Internet Protocol and Crypto Protocol is that the Protocol in Crypto usually allows one to a few applications to work, while Internet Protocol provides many applications to run.

This is why Crypto Protocol is also known as Fat Protocol, meaning there are very few applications running on them.

Internet Protocols are Thin Protocols because they have thousands, thousands, even millions of applications running on them.

Application of Protocol in investment

Protocol is a Framework for Crypto projects to then take advantage of to build next to save time. Therefore, the introduction of Protocol, or a better understanding of the Protocol’s definition, seems to only benefit those interested in technology, or specifically the project development team.

For ordinary users, or retail investors, there are not too many benefits to understanding the Protocol’s essence. Because what is really needed are real applications built from Protocol.

In addition, a Protocol is Blockchain, then what they need to care about is the ecosystem built on it, or the inflow of money. Eg Near is also a Protocol, but everyone only knows Near with the definition of a Blockchain and Near . ecosystembut no one said Near is a Protocol.

summary

The birth of Blockchain has created a turning point in technology. But besides that, users can still build the above Protocols to take advantage of the potential of Blockchain. And with Protocol, users can build many projects with practical applications.