Blockchain 3.0 aims to improve the global scaling limitations of previous Blockchain technologies currently present in Bitcoin and Ethereum.
It can help various industries, such as banking, insurance, healthcare, retail, telecommunications, logistics, energy, and government.
China is currently at the forefront of Blockchain 3.0 development.
Before we start discussing China and the way it entered the Blockchain 3.0 Era, let’s define what is Blockchain 3.0.
Blockchain technology has been all the rage recently as many companies have started to genuinely invest in Bitcoin technology, and led by the example of Tesla and Visa, have even started to accept cryptocurrency as a way of payment and settlement, which is quite impressive. Blockchain 3.0 is essentially an upgraded version of blockchain 2.0. However, this one is built with the intention of improving the capabilities of the technology and solve the current issues it has.
A Brief History of Blockchain
You see, this is a term that describes the attempts to fix some of the problems the blockchain industry currently has. This means that it intends to resolve issues such as scalability, interoperability, and privacy.
- Bitcoin is considered Blockchain 1.0
- Ethereum is considered Blockchain 2.0
These put cryptocurrencies on the map and have had a lot of publicity throughout history.
Ethereum specifically improved a lot on what made Bitcoin great and even has a lot of dApps that run through its blockchain.
Bitcoin, for example, has an issue with its scalability. In fact, it has poor throughput, it has seven transactions per second. Now, when you compare this to Visa, which does 1.700 transactions per second, its proof-of-work consensus mechanism has given it a bottleneck.
How Blockchain 3.0 is an Improvement
Blockchain 3.0 resolves scaling issues through its layer two fixes which are developed in order to easily be integrated within currently available blockchain protocols. These have the intention of offloading transactions from a blockchain into a peer-to-peer network that in turn increases the throughput.
Now, with thousands of distinct blockchains out there, the ability to communicate with them can be difficult, to say the least. The industry simply lacks an interoperability protocol, that has the ability to facilitate communication. Blockchain 3.0 intends to improve upon this as well.
When we move on and discuss privacy, you need to understand that many blockchains out there are public, which means that both the public wallets as well as transactions are visible to anyone. Several cryptocurrencies have tried to resolve this issue, such as Monero, Zcash, and Dash, all of which have various types of anonymity to them, however, MimbleWimble is at the forefront of leading blockchain 3.0 to the future with Grin and Beam as the first implementations.
Now, this was just a quick summary, and there’s a lot more to Blockchain 3.0 that needs to be discussed, but for the time being, let’s move on to what’s going on in China.
China and Blockchain 3.0
When we look at China’s cryptocurrency history, we can see a similar pattern. You see, in blockchain 1.0, their most prevalent companies focused on digital currency applications, and in blockchain 2.0, some of the most visionary enterprises ass well as vendors started to gain business value through advancing blockchain technologies.
After 2019, they started prioritizing enterprise customers, and the technical progress made by tech leaders. Now, the main reason as to why they have such a push to blockchain 3.0 is due to the fact that they have governmental pragmatic measures.
The vendors in China are even advancing their technology to address a lot of the enterprise needs. Keep in mind that, not just in China, but everywhere else in the world, a lot of enterprises need support for performance, scalability, privacy, and possibly most important of all, security. As such, a lot of firms have started to make strategic investments when it comes to blockchain R&D. This has led to a lot of vendors making substantial progress when it comes to the advancement of blockchain technologies.
Some of the Chinese companies involved in this that you might know include:
- Huawei
- Tencent Cloud
- WeBank
- Ant Group
Not only that, but the blockchain is actually transforming a lot of businesses through enabling a new business model within this digital ecosystem. This is the case for just about all major industries, and these include banking, insurance, healthcare, retail, telecommunications, energy, and government.
Most significantly out of all of this, financial service firms have been prioritising process transformation for effectiveness as well as trust.
We also need to take a look inside what is known as the enterprise blockchain platform or EBP market in China.
What is essentially happening in China is the fact that EBP vendors are playing vital roles in driving business applications as well as technology advancements. These vendors will typically be allocated to a total of three categories:
- Software Vendors – these are intended to provide on-premise software that can power just about any blockchain-related initiative.
- Cloud Service Providers – these are intended to offer blockchain as a service in order to assist with future innovation.
- Consulting Service Providers – these are intended to provide tailored blockchain solutions to the specific needs of certain customers.
Now, keep in mind that many of these Blockchain 3.0 efforts can be seen as being in their infancy. This is a project that’s just getting started, and only time will tell how quickly China progresses to bring DeFi technologies into real-world usage cases.
It is difficult to say how many of the projects will be successful, but one thing is for sure and this is the fact that blockchain, as well as for cryptocurrencies, are finally starting to adapt to real-world needs and have the potential of being the future way of doing, well, just about anything, both online and into the real-world.
Thank you for reading
Make sure to visit www.openware.com to find out more about Blockchain technologies, software solutions and open-source development tools for launching next-generation Crypto & Blockchain services.
California-based Openware is the software engineering leader of the open-source Blockchain ecosystem, designing and developing global Fintech platforms, cryptocurrency exchange software, NFT crypto marketplaces, crypto banking, online brokerage, liquidity solutions, and more.
Did you like the article? Follow us for more stories from open-source Blockchain software engineers at Openware!