Let’s talk about how blockchain technology has evolved from version 1.0 to version 4.0 since it’s fascinating to see how it’s creating more profound and crucial significance in the actual world. Blockchain began as a distributed ledger technology (DLT) for keeping cryptocurrency transaction records. Still, it has since expanded into the basic technology powering strong new-age possibilities such as decentralized economies, NFTs, Web 3.0, Metaverse, and many more.
So, Let’s understand the evolution of blockchain 1.0 to 4.0.
Cryptocurrencies (Blockchain 1.0)
It all started with Bitcoin, as we all know. The original application of the Blockchain was to record bitcoin financial transactions. By powering cryptocurrencies, blockchain has already established itself as the facilitator of the “Internet of Money.” Blockchain quickly prompted the influx of new cryptocurrencies by offering transparency, accountability, immutability, and security, and we now have over 2,000 distinct cryptocurrencies in circulation.
The rise of cryptocurrencies into the mainstream market has long been the gossip of the town, so we’re all aware of how things are progressing. There is no going back now that many consumers and companies are accepting and embracing crypto-powered digital payments. Our monetary systems will increasingly rely on digital currencies in the future as the era of cash draws to a close. Economists believe that the future will be a mix of cryptocurrencies, stablecoins, central bank digital currencies, and other digital payment systems.
Smart Contracts (Blockchain 2.0)
With the release of Blockchain 2.0, the era of smart contracts began, allowing Blockchain to expand beyond its initial role of powering cryptocurrencies. Smart contracts provided a mechanism for organizations to automate cross-organizational contracts. Because smart contracts are autonomous computer programs that exist on Blockchain, they may run automatically when pre-defined criteria are satisfied, removing the need for middlemen. Smart contracts are popular because they are tamper-proof and reduce the costs of verification, exception, arbitration, and fraud prevention while also allowing for automated permission-less execution. Smart contracts also enable transparent data recording that is easily verifiable and gives all parties involved equal control over their transactions.
Ethereum, which is quite popular, is a 2nd generation blockchain. Ethereum is the go-to Blockchain for organizations across industries, notably supply chain, logistics, and cross-border payments, for powering the functionality of smart contracts. Ethereum, like Bitcoin, uses the Proof-of-Work consensus technique, which demands the deployment of powerful mining hardware and a large investment of time and money. This necessitated the development of more environmentally friendly and resource-light blockchains, which the third-generation blockchains attempted to fill. However, for the majority of them, Ethereum remains the goal, since they try to match Ethereum’s programmability. From smart contacts to dApps, asset tokenization to DAOs, Defi to NFTs, Ethereum is setting the standard.
DApps (Blockchain 3.0)
The growth of decentralized applications (dApps) has been the focus of Blockchain 3.0. DApps allow a variety of strong blockchain use-cases, including Defi platforms, Crypto loan platforms, NFT markets, P2P lending, and others, with a frontend user interface that calls to its backend smart contracts maintained on decentralized storage. With the arrival of 3rd generation blockchains like Cardano, Solana, IOTA, Nano, XDC, and many more, what Ethereum started in dApp development and Defi found new dimensions. These newcomers aimed to improve Blockchain adoption at a broad level by addressing defects or deficiencies in second-generation blockchains. 3rd generation blockchain protocols focused on issues such as speed, security, scalability, interoperability, and the environment, and were powered by innovative consensus techniques like Proof of Stake, Proof of History, and others.
What’s inside? (Blockchain 4.0)
The third generation of Blockchains is still growing and establishing itself in the industry. Is it too early to talk about Blockchain 4.0? It’s not because Blockchain is presently advancing at a rapid pace. Blockchain technology has progressed from the stage of discovery and testing to the stage of application and extension. While Blockchain 3.0 was primarily concerned with resolving difficulties with second-generation blockchains, Blockchain 4.0 is concerned with using blockchain to innovate. As firms from many industries adopt blockchain at a quicker rate, we should expect tremendous improvements in the blockchain industry.
Blockchain 4.0 aims to make Blockchain a more business-friendly environment for developing and deploying more advanced and mainstream decentralized applications. The most important factors will be speed, user experience, and usability by a bigger and more common audience.
Conclusion
Everyone understands that Blockchain 4.0 will be required. Similar to the speed at which blockchain has proven to be admired and safe for all, The future new version will be 10x stronger and safer than the previous one.
