Evolution Of Blockchain for CEO`s

GUPTA, Gagan       Posted by GUPTA, Gagan
      Published: June 7, 2021

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Evolution of BlockChain Technology

Blockchain is still evolving on a daily basis. To this date, Blockchain technology exist in multiple different versions, each having specific new features compared to its predecessor.

1st Generation Blockchain Technology

Currencies: (Bitcoin, Litecoin, Dogecoin, Reddcoin, and others)

All cryptocurrencies related to the first generation are written in C++ language and use Bitcoin source code as a basis.
To get a better understanding of the first generation, you'll have to take a closer look at Bitcoin's technology, Bitcoin was the first ever to introduce this new technology.

The first generation Blockchain's uses Proof-of-Work. It makes these networks costly - mining requires much electricity. Some people critique ASICs for depriving the home miners of ability to mine effectively while opponents stress that mining farms utilizing dozens of ASICs secure the network better because today one needs to spend an incredible amount of money in order to perform the 51% attack. In fact, as long as people are not capable of confirming blocks via CPU power on their own, the network can't be called 100% peer-to-peer. Although Bitcoin mining is proved to be incredibly energy consuming it is considered that it's still much better than the conventional banking system that consumes three times as much as Bitcoin.

This first generation Blockchain has a fixed policy that no one can alter. The policy also includes that a user can only spend his/her bitcoins once. After their transaction, they would not be able to get their hands on those again.
You'll get to mine only 21 million Bitcoins and once the threshold is reached no one would be able to mine or get their hands on them unless they buy it.

Bitcoin lacks some important features (e. g. the ability to use smart contracts). The first generation blockchain has limited functionality and that's the reason why the second generation followed.

What are the Benefits of 1st Generation Blockchain Applications?
Well, there are so many benefits of this type of the first-generation Blockchain. Let's take a look at them one by one.
No one will be at a loss due to losing a single node. The data will get stored in every other node too. If someone tries to hack it or tamper the records, the process would be too much evident. If there are only nine other ledgers that the hacker has to break in and install a similar looking ledger on the system, it could be a piece of cake.
But imagine what happens when there are 2 thousand or million people with the ledger. The sessions are also refreshed every 10 minutes, so it's practically near to impossible to hack it.

You won't have to trust any party blindly. Every transaction is automatically verified and signed by each member.

The first generation Blockchain technology was one of the revolutions of the digital world. This was the root of every other cryptocurrency and latest versions of Blockchain technology.

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Evolution Of Blockchain for CEO`s
Evolution Of Blockchain for CEO`s

2nd Generation Blockchain Technology

Currencies: (Ethereum, BAT, etc)

Ethereum is the basis of the second generation Blockchain technology. Let's take a closer look at this system to get a better understanding of the system. Ethereum is often paired up with bitcoin. It introduces a new feature called 'Smart contracts,' and you can send money using their currency Ether.

Ethereum is based on Javascript and has a very different, much wider functionality than the Bitcoin-based currencies. The Ethereum platform is not just a cryptocurrency, but a digital ecosystem that can be used as a basis for other decentralized projects. Today there are numerous projects and applications (dApps) that are based on the Ethereum blockchain

Probably the most important innovation brought with Ethereum were smart contracts.

A smart contract is a coded project that gets uploaded on the network. After executing all the contracts, it gets automatically updated on the ledger. Smart contracts provide security to transactions automatically controlling the execution of all conditions by all actors and processing the transaction as the result of this execution. Smart contracts expanded the horizons of possible utilization of the blockchain because now this technology became capable of handling such complex deals as voting, verification of documents/identity, maintaining the healthcare history, real estate deals, and so on - anything you can imagine, all kinds of trust agreements can be processed on the blockchains of the second generation, safely, fairly, quickly, and automatically, without authority of any third party.
The second generation Blockchain technology explained adds up a new feature to the whole digital currency situation. So, now it can also be utilized other than just a currency tool.
Ethereum provides its own Turing-complete programming language, Solidity. Developers wishing to create a decentralized application on top of the Ethereum blockchain have to use Solidity for that purpose.

Ethereum has the same serious problem as Bitcoin - scalability. The necessity to solve this problem is realized by the creators and developers of both networks, so there is ongoing work on solutions (sharding for Ehtereum. It should make the network fast and scalable infinitely and the Lightning Network for Bitcoin which should let increase the number of processed transactions per second to the Visa level or so).

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3rd Generation Blockchain Technology

Currencies: (Cardano, Qtum, Ripple, Nano, IOTA, and others)

Every decentralized application build on Ethereum only runs on their EVM (Ethereum Virtual Machine). So, if you want it to move to another platform, say Lisk, you'll have to alter the coding.

The third generation allows the flexibility to interchange platforms and uses blockchain application on any network

It's fair to say that in many cases the third generation blockchains are the result of working on more efficient blockchain-like solutions. Yes, some projects are using the technology other than blockchain in order to get rid of flaws and limitations of the blockchain (there are Holochain, Sidechain, Hashgraph, etc). Although these technologies are different we can refer them to the third generation of blockchain because they develop some of the blockchain's characteristics and can be used similarly. Of course, many of the third-gen projects are blockchain-based.

The main features are wider functionality and better design that allows avoiding such problems as poor scalability. Another feature common for the third generation of blockchains is the ability to process crosschain transactions. The rest notable features are inbuilt compliance and governance and improved mechanism of smart contracts (inbuilt formal software verification). The Proof-of-Work is usually replaced by other consensus mechanisms (e.g. Proof-of-Stake)

The Fourth Generation

Does it even exist? Probably no. But people say that most likely when the third generation meets AI we will have the fourth generation. The intriguing projects are DeepBrain Chain and SingularityNet, but it's too early to say anything particular about them. The time will show if these projects are really significant.

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Evolution Of Blockchain for CEO`s

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