Blockchain 1.0 is the first form of blockchain which arrived in the shape of Bitcoin. You could compare it with Nintendo – the entertainment system that was the first of its kind that introduced the world of gaming.
Bitcoin had a similar role in that it is the first and has gotten people interested and involved. It introduced the concept of the public ledger. The public ledger has attracted the attention of bankers, lawyers, accountants, and governments because it could rapidly change their economic models and modes of operation.
Distributed ledgers are ideally suited to record any digital transaction (signing a contract, sending and receiving money, keeping medical records, buying and selling stocks, and the list goes on). One of the critical features of distributed ledger technology is ‘immutability’ – the fact that tampering with or erasing a transaction is impossible due to its advanced encryption technology. In the years to come, I am sure that we will see Blockchain 1.0 as we saw the internet back in the 1990s.
Then the evolution of blockchain arrived with Ethereum, created by Vitalik Buterin, which was an improvement of Bitcoin.
This evolution added a further element which is the ability to build decentralized applications (dApps) and smart contracts to ensure that deals, transactions, and many other tasks can be performed without intermediaries.
Smart contracts are computer programs that are guaranteed to behave in a certain way. The Ethereum smart contract runs on a distributed network of computers. The benefits of using smart contracts are many; it cuts away intermediaries, makes the transaction much faster and cheaper at a high level of security.
Then NEO came out which was an improvement on Ethereum regarding performance showing increased transaction speed, for example.
If blockchain has one weakness, it is that it cannot store large amounts of data on the blockchain itself. The next in the evolution will, therefore, be a way to solve that equation.
As earlier stated, the two previous stages of the blockchain technology have been marked by the birth of Bitcoin and Ethereum respectively. With blockchain 3.0, the new generation blockchains come into existence with a focus to address the pressing issues plaguing both Blockchain 1.0 and 2.0 via different protocols, techniques, and frameworks. High scalability, interoperability, adaptability, sustainability, privacy as well as instantaneous transactions are features that separate Blockchain 3.0 from its predecessors.
Until now, the blockchain was not seriously considered (with some exceptions) as a tool for working with files and Big Data. However, now this idea is becoming more popular, and most importantly, real. The technology is here now.
While we’ll still have the technologies of blockchain 1.0 and blockchain 2.0 co-existing with blockchain 3.0, this latest paradigm will be the most powerful. I believe that the future of the blockchain is combining their respective strengths with the power of data. It runs our modern world and accessing it securely and efficiently is how to find and add value.
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Dennis Sahlström has been trading and investing since 2012 and has for the last two years been consistently profitable. He has been in the crypto- and blockchain space since the middle of 2017 and realized its potential for our world, not least how it is transforming the society we live in. He has now created an education platform, together with the wealth coach Marcus the Maria. They teach regular people how to invest and trade in the cryptocurrency market with proven strategies. If you want to learn more and feel like its time to get into this new asset class, download our free book and register to the next live training to get your future in cryptocurrencies started.