When we think back to the time that the internet first arrived, we can note its progress through several distinct stages. These included the launch of the first wide-area computer networks back in the 1960s, the first emails in the 1970s, the invention of the Ethernet cable a bit later on, and then the rollout of the world wide web in the 1990s. As we intrepidly followed each of these developments, the internet as we knew it changed dramatically. Each and every step was crucial to creating the pieces that would be fused together to create the internet that we use today.
Whilst blockchain technology is only a decade or so old, we can look back at its recent past and divide it into some distinct and pivotal stages. Of course, we are still in the infancy of the blockchain world and it is likely that as the years go by, it will evolve into something completely unrecognisable in terms of capacity, from what we know now. That said, we are still able to pinpoint three so-called “generations” of blockchain and they are as follows:
Bitcoin and Virtual Currencies
Whilst several individuals had come up with some of the ideas that would later develop into the blockchain, it was Satoshi Nakamoto that wrote them all down in the whitepaper for Bitcoin. Because of this, we can safely say that the true concept of blockchain began with BTC.
In the beginning, the blockchain laid the foundations for a shared public ledger that would support a digital currency network. Satoshi’s blockchain comprised of 1MB blocks of information attached to each BTC transaction and these blocks would all be linked together through a cryptographic verification process, creating a totally immutable chain. Even in its early stages, blockchain technologies basic premises are still in place today and Bitcoins blockchain is pretty much unchanged from when it was launched almost 10 years ago.
Over time, developers working on blockchains began to realise that this technology had so much more potential than just carrying out basic transactions. The founder of Ethereum, Vitalik Buterin had the novel idea that things such as assets and trust agreements could be transferred onto the blockchain and managed automatically.
In “normal life” a contract is managed between two independent entities, often with the input or supervision of other entities as a part of the process. Smart contracts, on the other hand, are self-managing and self-executing which means they require no third party supervision at any time. Each step of the smart contract process is triggered by an event such as an expiration date or the achievement of a particular goal with no need for any human interference whatsoever.
Many analysts believe that we have not even begun to scratch the surface when it comes to the potential of smart contracts, but one thing is for sure; they are an important evolution in the blockchain world.
One of the big obstacles standing in the way of blockchain domination is scalability. Bitcoin is struggling big time with issues around transaction processing times and bottlenecking. Whilst many newer cryptocurrencies have tried to revise their own blockchains to avoid or anticipate these issues, there has not been a huge amount of success thus far. Going forward, one of the most important developments that we need to see is going to centre around scalability.
Asides from this crucial improvement, new applications and uses for blockchain are being discovered on a daily basis. It is hard to know exactly where these developments will take us but supporters of the tech are on the edge of their seats, anticipating the next move of the sector.
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