Evolution of Blockchain: From Blockchain 1.0 to Blockchain 4.0

The evolution of blockchain has seen the technology emerge from one amazing phase to another. With loads of upgraded and more advanced features, blockchain technology has grown from blockchain 1.0 to blockchain 4.0.

Although blockchain has become a buzzword and is undoubtedly among the most trending techs in this generation, a number of people are still yet to get a better understanding of what blockchain means. As such, it is better we understand what blockchain is and what it entails before delving further into its growth stages over the years.

Blockchain can simply be described as a digital system in which cryptocurrency transactions are recorded and maintained across several computers in a peer-to-peer network. It is basically a digitally distributed, decentralized, public ledger that exists across a network of computer systems.

Blockchain 1.0

The era of blockchain 1.0 saw the iteration of the whole concept of decentralization and it was all centered on the evolution of cryptocurrencies. The initial emergence of the blockchain began at the initiation and development of the first cryptocurrency, Bitcoin (BTC).

This happened when a team of experts called Cypherpunks raised concerns about the future of the internet and the financial system. The team believed that the future of the internet would be monitored and censored. As such, they made attempts to develop an electronic cash system that would ensure privacy and preserve the open internet from an economic perspective.

The system had built upon the obscure prior work of proposed ECash (electronic cash) schemes in the 1980s and 1990s. This phase saw blockchains being centered on highly secure, anonymized, peer-to-peer transactions of a digital currency that is completely decentralized.

The Blockchain 1.0 technology comprises certain components which include a Blockchain Core for the respective cryptocurrency, wallet software, mining rigs, and mining software. The Blockchain Core for each cryptocurrency is used to enable any computer to boot up a node.

Apparently, blockchain 1.0 can be defined as the first generation of blockchain technology that basically focused on decentralization and cryptocurrency.

Blockchain 2.0

Being the next generation of blockchain technology after Blockchain 1.0, Blockchain 2.0 is apparently an upgraded version of Blockchain 1.0 which is represented by Ethereum (ETH).

Blockchain 2.0 is basically focused on the rise of Ethereum and the integration of smart contracts.

Ethereum has been built as a means of establishment for decentralized applications. Hence, Blockchain 2.0 centers around it as it has provided a larger avenue for developers to deploy smart contracts to the Ethereum blockchain in an open-sourced and permissionless method.

This technology has triggered the innovation of decentralized finance (DeFi), decentralized autonomous organizations (DAOs),  initial coin offerings (ICOs), and non-fungible tokens (NFTs).

In general, Blockchain 2.0 can be defined as the second generation of blockchain technology that is focused on smart contracts.

Blockchain 3.0

This is the stage of blockchain evolution that seeks to improve the feature of scalability while allowing blockchains to interact with each other. Blockchain 3.0 seeks to introduce Cardano (ADA) to the scene. Although there are no clear definitions nor a certain view of what it promises the internet, it is believed that the blockchain adopts a Proof-of-Stake (PoS) mechanism.

However, its potential is centered on the creation of solutions for services and industries outside of economics. Blockchain 3.0 is regarded as an enterprise and institutional blockchain. It seeks to reduce the high gas fees that come with the preceding version, while also enhancing the security features of the blockchain.

As blockchain technology continues to grow, there are tendencies that it can be integrated into supply chains, cybersecurity, voting, healthcare, Web services, the Internet of Things, and lots more. Thus, allowing them to enjoy the benefits of a scalable and centric ledger that would enhance traceability, increase efficiency while reducing disruptions, and improve security and transaction speed.

As said earlier, Blockchain 3.0 is an upgraded version of blockchain 2.0, built to improve the capabilities of the technology while using decentralized applications. It focuses on solving the existing problems of blockchain technology. It also aims to facilitate speedier, cost-effective, and efficient transactions.

Blockchain 1.0 vs 2.0 vs 3.0

Blockchain 1.0, 2.0, and 3.0 represent the gradual growth stage of blockchain technology. Each succeeding version aims to improve on the lapses of the preceding stage.

Blockchain 1.0 began with the iteration of the world’s first and leading cryptocurrency, Bitcoin. Blockchain 2.0 was centered around Ethereum, while blockchain 3.0 welcomed Cardano into the scene.

Blockchain 2.0 was built on the concept of blockchain 1.0 and produced an upgraded and more enhanced version.

The combination of these versions has provided the industry with efficient use of cryptocurrencies, execution of smart contracts, and use of dApps.

Blockchain 4.0: New Generation Technology

Apparently, Blockchain 4.0 is a new generation of blockchain technology that succeeds Blockchain 3.0. It seeks to make blockchain ultimately useful in business environments for creating and running applications, hence bringing the technology fully mainstream.

The previous stages of the evolution of blockchain obviously have potential advantages for businesses which include security, automated record-keeping, and immutability, plus the potential to pay invoices, bills, and wages inside a totally secure framework.

However, there is still room for better enhancement in cases of speed and the limited ability to easily make innovations on the blockchain. Blockchain 4.0 seeks to enhance the user experience within the industry.

What’s Next?

Considering the exclusive potentials of Blockchain 4.0 and the impacts of its preceding generations, it is correct to say that the future of blockchain technology is promising with the hope of businesses and firms operating with better efficiencies.

It seeks to enable businesses to move some or all of their current operations onto secure, self-recording applications based on decentralized, trustless, and encrypted ledgers. Businesses and institutions can easily enjoy the basic benefits of the blockchain.

Conclusion

The evolution of blockchain has reached success so far and it is apparently close to reaching the mainstream. From Blockchain 1.0 being built to solely support a cryptocurrency, its downsides were low speed and a complex user interface. Blockchain 2.0 emerged to outstand Blockchain 1.0,  thus it was developed to be able to do more than cryptocurrency. This saw the emergence of a blockchain like Ethereum, built deliberately to facilitate a range of activities and applications. While pressing toward well-developed blockchain technology, Blockchain 3.0 emerged and the space is now looking forward to the new generation of blockchain technology, Blockchain 4.0.