There are key events in the development of the internet that we can use to split the process into phases. Among these significant milestones are the establishment of the first wide-area computer networks in the 1960s, the development of an electronic mail system in the 1970s, the establishment of Ethernet later in that decade, the establishment of the world wide web in the 1990s, and the establishment of the first browsers and search engines later in that decade, among others. The internet changed dramatically as a result of each of these landmark advancements. Each stage was critical in the development of the internet that we know and rely on today.
Similarly, it is feasible to look back on the evolution of blockchain and split it into stages denoted by significant advancements and innovations. Blockchain technology has just been around for a fraction of the time that the internet has, so there are sure to be more significant breakthroughs to come. Nevertheless, researchers have begun to classify blockchain’s history into at least three distinct periods.
The First Stage: Bitcoin and Digital Currencies
While the ideas for the blockchain were circulating in computer science circles, it was Bitcoin’s pseudonymous developer, Satoshi Nakamoto, who defined the blockchain as we know it in the white paper for Bitcoin. As a result, blockchain technology debuted with the Bitcoin network. While blockchain has now been utilised in a variety of other sectors, it was originally designed for this digital currency and to promote the benefits of digital currencies more broadly.
In its early phases, blockchain established the fundamental idea of a shared public ledger that enables a cryptocurrency network. Satoshi’s blockchain concept makes use of 1 megabyte (MB) blocks of data on bitcoin transactions. Blocks connect together in an immutable chain using a complicated cryptographic verification procedure. Many of the critical components of these current systems were built by blockchain technology in its early stages. Indeed, the blockchain of bitcoin has remained virtually untouched since its inception.
The Second Stage: Smart Contracts
Over time, developers began to assume that a blockchain could do more than just record transactions. The creators of Ethereum, for example, believe that assets and trust agreements may benefit from blockchain administration as well. In this sense, Ethereum is the second generation of blockchain technology.
The introduction of smart contracts was the most significant breakthrough brought about by Ethereum. Contracts in the mainstream corporate sector are often administered by two independent organisations, with other businesses aiding in the supervision process. On a blockchain, smart contracts are self-managing contracts. They trigger an event, like the expiration of a contract or the fulfilment of a certain pricing objective; in reaction, the smart contract manages itself, making modifications as needed and without the involvement of third parties.
We may still be in the process of realising the untapped potential of smart contracts at this stage. As a result, whether we have genuinely progressed to the next level of blockchain development is questionable.
The Third Stage: The Future
Scalability is a critical challenge for the blockchain. Bitcoin is still plagued by long transaction processing times and bottlenecks. Many new digital currencies have sought, with varying degrees of success, to alter their blockchains to address these difficulties. Scalability is one of the most crucial advances paving the way for blockchain technology in the future.
Aside from that, new blockchain applications are being found and deployed all the time. It’s impossible to predict where these advancements will take technology and the bitcoin sector as a whole. Supporters of blockchain are likely to be ecstatic. From their perspective, we are living in an epochal era with an epochal technology that is still growing and unfolding.
Some of the third generation of blockchain platforms
1. Cardano
Cardano is a blockchain protocol that intends to be a smart contract platform, as well as to develop decentralised apps, currencies, and other features that we anticipate from such projects. It is the first significant protocol created from the bottom up as a Proof of Stake (PoS) system. It also adheres to a more structured research philosophy. The Cardano Foundation’s articles are all peer-reviewed according to academic standards. This is in contrast to a project like Ethereum, where numerous people throughout the world can change it without a clear central direction. This might be on purpose, as Charles Hoskinson was originally a member of the Ethereum Foundation before leaving. The incident results in the formation of Cardano and its formal scientific pursuit.
Cardano employs the Ouroboros protocol, which allows global systems to scale indefinitely. It happens without the sacrifice of performance or security against bad actors and Sybil attacks. It accomplishes this balance by using a combination of multi-ledger, side chains, and multi-party state channels to execute transactions in parallel.
Also read: Cardano vs Ethereum: Who Will Rule The Crypto Market?
2. Polkadot
The Polkadot crypto project is a next-generation blockchain that aims to establish a multi-chain architecture that is heterogeneous. It has attracted a large number of investors, developers, and users and is widely regarded as one of the most creative ventures in the cryptocurrency sector.
The DOT powers the Polkadot ecosystem. DOT is the network’s native token. It aims to address several of the existing constraints of blockchains, such as scalability and security. It functions as a solution that combines the technology’s individual qualities.
The concept was created in 2016 and took a few years to come to fruition. The DOT coin did not enter the market until August 2020. Coinbase listed Polkadot in June 2021, giving it final recognition. Polkadot’s primary goal is to facilitate interoperability. It accomplishes this by linking other blockchains to it. It enables them to operate freely within it, allowing for the transfer of any type of asset or data.
Polkadot offers economic scalability in addition to interoperability. It allows a single group of validators to secure various blockchains. It achieves transactional scalability by distributing transitions across several parallel blockchains. This blockchain also has the advantage of not requiring hard forks to update, add new features, or correct errors.
3. Optimism
Optimism is an implementation of the Ethereum Layer 2 Optimistic rollup. It runs on a public benefit corporation (PBC) committed to scaling Ethereum. Rollups are layer 2 scaling platforms that maintain funds on the blockchain. However, they transfer the majority of work to side chains to relieve the main chain’s stress.
Optimism supports all of Ethereum’s DApps. It allows the blockchain to conduct computations off-chain while only publishing transaction data on-chain. In this manner, it can scale Ethereum without losing decentralisation or security while also boosting transactions per second and lowering gas prices by a factor of a hundred or more.
4. Polygon
Polygon is a protocol that allows you to join Ethereum-compatible blockchain networks. Because of the overburdening of the networks with transactions, there are a lot of expensive network fees. Polygon is a solution to the problems that plague the blockchain. Problems such as poor speeds and excessive gas prices, while also being safe and secure.
The Polygon was previously known as the MATIC network. It’s a framework and protocol that lets you create and join Ethereum-compatible blockchain networks. It can provide scalability and adaptation to any alt chain while delivering Ethereum’s liquidity and security.
Polygon wants to introduce two more roll-ups to the platform after a time. One of them will assist in running on top of the existing Ethereum network, which will speed up transactions. The other will aid in the distribution of many off-chain exchanges, resulting in single trades. Despite the rebranding, Polygon’s cryptocurrency is still known as MATIC. It is a digital currency that serves as the network’s foundation. The participants of the network can use the cryptocurrency as a settlement or payment unit.
5. Avalanche
Avalanche is a proof-of-stake, low-cost programmable smart contract platform that allows for the creation and deployment of highly scalable Solidity-compatible Ethereum DApps. Thanks to its revolutionary technology, it can enable the seamless and safe functioning of a worldwide network of millions of interconnected validators. This platform is a bottom-up build. It links existing blockchains, import balances, support several scripting languages and virtual machines, and enable multiple deployment scenarios without sacrificing speed or security.
To know more about Avalanche, read: The Rising Avalanche: The 10th Biggest Cryptocurrency in The World
6. Solana
Solana is an open-source blockchain that assists in the development of DApps. It combines proof of history with other innovations to allow the network to expand at the rate of Moore’s Law without the need for numerous shards or layer 2 solutions. Another essential characteristic is that it ensures composability amongst ecosystem projects by keeping a single global state as the network expands—all while maintaining a high level of security and lightning-fast speeds.
On a normal gigabit network, a centralised database powered by Solana can execute 710,000 transactions (up to 176 bytes) per second. Because of the use of Optimistic Concurrency Control, a centralised database can duplicate itself while maintaining high availability without significantly reducing the transaction rate.
Also, read: Solana VS Ethereum: Is Cheap Transaction Enough to Beat Ethereum?
7. Cosmos
Cosmos, an open-source project founded by the Tendermint team, is an ecosystem of blockchains that can scale and communicate with one another. It does this through the use of the Inter-Blockchain Communication (IBC) protocol, which enables users to freely trade assets and data between various blockchains.
The platform also makes use of other open-source tools, such as Tendermint and the Cosmos SDK, and allows anybody to contribute to the ecosystem by developing new tools. All of these technologies work together to enable developers to design DApps that are scalable, interoperable, and secure. They also allow participant blockchains to retain their sovereignty, execute transactions more quickly and connect with other chains in the network effortlessly. The ultimate objective is to construct a blockchain internet.
To know more about cosmos, read: Cosmos and ATOM for The Uninitiated
Final Thoughts
These third generation of blockchain platforms aim to address the current pain points in the blockchain industry’s growth that are impeding wider mainstream acceptance. Will they be able to keep this promise in the long run, and will there be a need for additional innovation? Only time will tell. Whatever happens, one thing is certain: change is the only constant in this world.
