Call me old-school but I often have a hard time wrapping my head around the “thank u, next” trend. While the overnight success of this pop culture sensation may point to our continuous collective quest for something new, the only space where I can relate to this millennial anthem is the world of tech. Given that the incredibly promising and steadfastly efficient blockchain technology has officially been around for over a decade now, what’s more exciting than exploring the possibilities it has in store?
Ariana Grande can keep her hits and likes, while I keep wondering if it’s already time to swipe left on the three blockchain generations that have made an appearance over these ten years. The fourth generation of blockchain is coming our way, and while the details are still somewhat vague, I can’t help but be excited.
What will blockchain 4.0 look like and will it be worth moving on from the other three that came before? The questions are endless but I am determined to find an answer.
Before delving into the details of what lies ahead, it is imperative to have a look at what came before. Not doing so would be great disservice to the ongoing legacy of the blockchain. While necessity might be the mother of invention, innovation is rooted in the labour of those who came up with the earlier versions of any technology.
Blockchain 1.0: Where it All Began
Photo by Dmitry Moraine on Unsplash
Roughly a decade ago, the first practically applicable blockchain made a subtle, almost unnoticed entry into our world. Developed to be the technology underlying Bitcoin, the first ever cryptocurrency, blockchain was far more niche than it is today. Back then, if you interrupted a business executive at a meeting and asked him what blockchain was, he’d likely be clueless about it. Today, even if every person walking up and down the street might not know about it, a large section of business executives, entrepreneurs and governments definitely do.
The idea of the first generation of blockchain, developed by Bitcoin’s anonymous founder Satoshi Nakamoto, was that of a distributed ledger of information, simultaneously validated by a large number of nodes spread out all over the world. Promising transparency, immutability, accountability and security, this blockchain began to gather speed as more and more cryptocurrencies (mostly forks of Bitcoin) like Litecoin.Com and Bitcoin Cash started coming to the fore with blockchain at their respective cores.
The first generation of blockchain was characterized by the Proof of Work consensus mechanism, which necessitated the use of heavy mining hardware and expenditure of significant resources. It was a good start but soon problems started emerging in terms of scalability, interoperability, sustainability and speed. Till date, Bitcoin is one of the slowest cryptocurrencies out there, taking about 10 minutes to confirm a transaction.
Blockchain 2.0: Finding New Functionality
Image by Miloslav Hamřík from Pixabay
Nakamoto’s blockchain was mostly limited to facilitation of payments, at slow speeds and high costs. The promised security and immutability were often suspect as well, collapsing in the face of possible 51% attacks. The second generation of blockchain led by ethereum in 2013, sought to overcome a few of these limitations.
The new blockchain offered a world of expanding functionalities: from hosting blockchain smart contracts to decentralized applications, from tokenizing assets to supporting DAOs (decentralized autonomous organizations). These still used the Proof of Work algorithm and continued to have high network fees and less-than-optimal speeds but fueled by the availability of new functionalities, Ethereum quickly became the darling of businesses, the go-to blockchain for enterprise use. NEO, Waves, BAT quickly followed suit.
Blockchain 3.0: Fixing the Flaws
Image by Immersion Imagery from Shutterstock
The third generation of blockchain is still the new kid on the block, trying to fix the failings of the versions that have come before. Focusing on scaling up, the third generation blockchain networks are also trying to introduce greater interoperability and boost network speeds. Promoting cross chain transactions, using techniques such as sharding (particularly in the case of Ziliqa) and establishment of parallel chains are only some of the approaches being taken by these 3rd generation blockchain solutions.
Using mostly Proof of Stake and other new consensus protocols, the third generation blockchain networks include notable examples like Cardano, IOTA, Nano and so on.
So, what does the fourth generation of blockchain seek to achieve?
Considering the fact that the third generation of blockchain is still finding its footing, trying to attain popularity and higher adoption, it can sound a little unnecessary to consider a fourth generation of the technology right away. However, in the world of tech, change is the only thing that is constant and some visionary firms have already gotten moving, before the space gets too crowded.
What is the fourth generation of blockchain? Ask an expert, you will probably find an answer. Ask another, and you will end up with two. The reason is that the fourth generation of blockchain is not here yet and we do not have a crystal clear picture of what it looks like. Some writers feel that a combination of third generation blockchain and AI will spawn Blockchain 4.0 but honestly, I believe that it can be so much more than that.
Photo by Craig Cooper on Unsplash
A few projects have already come out with their whitepapers, suggesting the wide variety of changes the new blockchain can incorporate. The defining characteristic of Blockchain 4.0 seems to be that it does not just seem to improve, like the third generation does. Instead, it seeks to innovate.
In all these years of its existence, blockchain has accomplished much but has hit a major roadblock when it comes to mass adoption. While big businesses, a few governments and some individual entrepreneurs may be riding on the blockchain hype, the technology is yet to permeate to local institutions, the common people, schools, colleges, small businesses and the likes.
The fourth generation of blockchain should seek to break that very divide, by making the technology accessible to institutions and industries, governments and common folks. While there are a few projects trying to take the proverbial leap into the future, a couple of them happened to catch my eye with their innovative propositions.
One of them is Multiversum, a new blockchain platform being created, with the aim of mass adoption in mind. While existing blockchains would perform poorly with complexly organized data, this fourth generation blockchain solution offers to adapt to the hierarchical and multifaceted nature of real life organizations. Establishing relational databases, that can make connections between the various pieces of information stored on the ledger, the new offering hopes to meet the needs of organizations and governments more effectively.
Interestingly, this project also attempts a spin on the oft-lauded trait of immutability in blockchain. It suggests an operational rollback feature to make edits and changes, without affecting the transparency and dependability of the blockchain network in question. The incorporation of biometric information to hashes and cryptographic keys also presents an intriguing solution to the issue of security, and might be used for this particular blockchain project.
Even as the project aims to focus on novel features to facilitate widespread usage, it also tries to improve upon what has been an enduring failing of blockchain technology: low scalability. Perhaps a little too ambitiously, it claims to be working on “unlimited scalability”. Including validation, the speed is supposed to be 0.2s, with throughput being capable of reaching 1000 Tps per core. This means that a 64-core server is automatically able to reach up to 64,000 Tps. A unique Proof of Integrity consensus mechanism is expected to bind this all together.
Another fourth generation blockchain project, quite simply named the SOOM 4th Blockchain, is trying to take simpler route to achieving higher efficiency and adoption. According to its whitepaper, it is trying to incorporate the element of space into the usual configuration involving blockchain and time. A new grouping algorithm is meant to divide the nodes into groups for maximised efficiency, while another algorithm takes care of mobile-mining opportunities.
Basically, the 4th Blockchain is being developed as a blockchain-as-a-service (BaaS) platform to cater to a plethora of industrial needs. Each peer-to-peer transaction is made by cells, each cell having 512 nodes grouped together based on space and time factors by the unique grouping algorithm. It is an interesting way to approach the efficiency and scalability problem, introducing brand new innovation to tackle existing issues and cater to mass requirements.
Some other projects like Aergo and Insolar are also in the making, as far as fourth generation blockchain is concerned. Insolar is designed as a BaaS platform offering compliant, governance-friendly hybrid blockchain networks. It also promises to execute smart contracts using data from cloud-based domains. Aergo, for its part, offers to have around 1 million Tps and sidechain solutions to solve existing scalability issues.
Clearly, for the fourth generation blockchain projects, the possibilities seem to be enormous. Even as previously unseen solutions to the scalability issues keep emerging, some new projects promise to transform the very terrain of blockchain by coming up with mass-friendly, more pragmatic features.
The fourth generation of blockchain, whatever it may look like, will not be monotonous. It will be variegated, radical, exciting and unique. As new doors open up and whitepapers give us more food for thought.
I, for one, cannot wait.