Does the word “Blockchain’‘ ring a bell? Well, if not then let us introduce you to the basic concept of blockchain before moving to Blockchain generations. In simple words Blockchain Technology is a shared and immutable ledger. This means that all the information shared on blockchain platforms is transparent and secure. It also eliminates third party interference which makes it decentralized and independent.
Now that you have a little idea about Blockchain technology, we would like to tell you that blockchain has already evolved into the fourth generation. It has harnessed and unleashed its potential in the digital space quickly.
Don’t worry if you have missed out on this evolution and growth because in this blog we will be rewinding to the first generation of blockchain and leading you straight back to the latest generation. So, let’s get aboard the Lampros ship of knowledge which will cruise around all the four generations.
Blockchain 1.0 – The Journey Begins
It all started with Bitcoin, roughly a decade ago. It sneaked its way into the digital world in a very subtle manner. The idea behind Bitcoin was to empower people to conduct transactions. It eliminated the interference of any central authority such as banks and provided the users with a secure and immutable platform.
Satoshi Nakamoto, the creator of the Bitcoin and Blockchain database, opened a doorway for other cryptocurrencies as well.
There was an increase in the popularity of cryptos due to the rising demand in the market, but what created this demand? Well, simple yet astonishing features like immutability, accountability and transparency created a market for more ethical transactions without the need of any central authority. This was reason enough for the surge of demand, making it the most popular investment tool among the younger generation and new age companies.
Despite the rising popularity, the first generation of blockchain came with its own set of issues. One of the main issues was that the method deployed in the First Generation of Blockchain was Proof of Work.
Proof of Work is an adequate method which follows a competitive validation method to confirm transactions. Despite advancements, it comes with its own set of issues, that is the process time of confirming a transaction is lengthy. The transactions become slower as more and more minters join the network.
This issue created a need for a newer and faster way to operate, which led to Blockchain 2.0.
💡 Fun Fact: The slowest cryptocurrency is Bitcoin
Blockchain 2.0 – New Features and Advancements
It was time for blockchain to outgrow the era of powering cryptocurrencies that had slow process time at high rates. This need for advancement gave rise to Ethereum and Smart Contracts.
Smart contracts gave the organizations an opportunity to automate their inter-organizational contracts, while Ethereum encouraged organizations and individuals to make their own programs on the blockchain platform.
Let’s understand the functionality of smart contracts better as it powered DAOs, NFTs and DeFi .
The rules and conditions in Smart Contracts are pre-determined, making them self resilient and the functioning is of autonomous nature which executes the commands and conditions automatically when triggered.They shot up to popularity because of their cost-effective way to be an equal mediator between two parties. All the functionality of Smart Contracts are based on blockchain, making it transparent, immutable and secure.
Despite these advancements the need for a better blockchain wasn’t completely warded off as the 2nd generation was still using the Proof of Work.
Blockchain 3.0 – Advancements
The third generation of blockchain is entirely focused on optimizing and utilizing the boundless potential of blockchain technology. Blockchain 3.0 is all about Decentralized Applications a.k.a DApps.
DApps utilize user friendly and user interactive front end, strong backend (Smart Contracts), and decentralized storage to optimize the potential of blockchain technology.
They support various strong blockchain platforms like NFT Marketplaces, Crypto Lending Platforms, DeFi Platforms and many more.
One of the newest and much needed features in this generation of blockchain was the introduction to the Proof of Stake method.
You might be wondering how it is different from Proof of Work?In this method the miners are selected randomly to validate a transaction, this in turn saves more energy, increases security and is more scalable.
Then why do we need Blockchain 4.0? Skip to the next section to know about what the future of blockchain holds.
Blockchain 4.0 – The Future
Blockchain has surpassed the stages of invention, experimentation and implementation. Currently we can see Blockchain expanding its reach and operations across various industries and it won’t be long until Blockchain 4.0 will become a mundane part of at least our work lives. Here are two segments in which the blockchain 4.0 can be categorized:
- Web 3.0
As blockchain 4.0 is new not much can be said about it, but it is assured that it has the entire virtual field to explore and develop. There is a possibility that we might see a new mechanism, that is Proof of Integrity. To know completely what is Proof of Integrity, we might have to wait a while.
We know that the fourth generation of Blockchain will mainly focus on BaaS (Blockchain as a service) platform. It will optimize the functioning of blockchain platforms and provide time efficient and scalable solutions.
Shifting your business model to a digital platform isn’t enough if you’re not utilizing the potential of blockchain. Don’t get left behind while your competitors move ahead.
To start your blockchain journey you can contact us for consultation or go through the blockchain services and make a decision that fits your organizational needs.