Version 1.0, Version 2.0 and Version 3.0

The Blockchain protocol is responsible for the Bitcoin system. The Bitcoin network created by Satoshi Nakamoto was a shared, autonomous log of all Bitcoin exchanges.

Since then, blockchain technology has developed steadily over the past decades, radically changing the digital documentation of commercial activities. The financial sector, supply chain management, medicine, as well as the digital entertainment industry are just some of the new fields where blockchain plays a significant role.

In this piece, we will walk you through the three phases of blockchain technology to give you an understanding of how far this revolutionary concept has come. Knowing and appreciating blockchain’s many industrial applications requires knowledge of its historical development.

Blockchain: Three Different Layers

The development of Blockchain 1.0

As we have already discussed, Nakamoto’s first implementation of the blockchain was known as Blockchain 1.0. This implementation is just the bones of a distributed ledger, which is a system for logging and storing records across multiple systems. The original blockchains precisely recorded the monetary value of an object as it passed between hands. Usually the ‘thing’ in question was some kind of electronic cash.

This implementation of Bitcoin is an automated mechanism for transferring currency electronically, one that does not rely on a central authority to verify individual transactions. Users can make currency exchange without using a financial institution while using this technology. Users were able to make private, anonymous transactions using wallets, and all participants in the blockchain could see the full record of all transactions. It was transparent in every meaningful way.

The Proof of Work methods in these first versions also allowed miners to earn incentives.

Cryptos and Ethereum provide an opportunity to handle fiat money like US dollars on platforms like crypto-bankapp.com since they were not previously subject to federal restrictions and a large level of financial inspection.

Smart contracts on the second generation blockchain

The latest blockchain upgrade increased the functionality of the underlying blockchain technologies. Almost 4 years after Bitcoin’s meteoric rise, Vitalik Buterin proposed the idea of ​​Ethereum, a blockchain-based platform with several significant improvements over the previous version.

The smart contract functionality of a blockchain was developed by Ethereum. Smart contracts are, in their most basic form, a collection of instructions about what to do when a predetermined event occurs. By using smart contracts, two parties can do more with cryptocurrencies than just buy and sell.

Smart contracts can be used to automate complicated processes between parties and facilitate the transfer of virtual cash. Given the limitations of the first blockchain systems, Blockchain 2.0 made possible several possibilities that had previously been unavailable.

Due to the introduction of smart contracts, the entire DeFi network is now practically feasible. It opened the door for developers worldwide to create decentralized apps and software for use with blockchain networks that already exist.

There were still issues with the latest versions of blockchains. For example, it is possible that there are security flaws and errors in the code for smart contracts. The latter is dangerous because it makes the blockchain vulnerable to abuse by cybercriminals. In addition, the ecosystem experienced delays in payments and higher gas prices due to the increasing demand for the Ethereum blockchain.

Enterprise-level apps on third-generation blockchain

It is more difficult to define what comes next with blockchain technology. However, most analysts agree that Blockchain 3.0 can encompass a wider range of sectors and businesses.

Today’s blockchains are focused on long-term viability, extensibility, low costs, increased decentralization and stronger security.

Smart contracts for healthcare services and electronic record keeping are just two examples of where this technology is being used. Other industries that can benefit from this technology include manufacturing, supply chain management, cyber security and supply chain management.

In summary

Blockchain 3.0 is widely regarded as the penultimate iteration of the blockchain system. At the same time, we are seeing never-before-seen developments in artificial intelligence (AI) and the fabrication of computer chips.

In particular, AI is an important part in the development of new computing strategies that amaze even the most experienced academics and engineers. No one believes what the long-term prospects for blockchain technology are, especially given the slow but steady diffusion of innovations into commercial and general consumer use.