Blockchain technology has emerged as an actual game changer while introducing new possibilities. The game changer was Bitcoin with his native blockchain of bitcoin, even though blockchain technology has only been around for a fraction of the time that the internet has, it is still possible to look back on its major developments and stages.
FIRST GENERATION BLOCKCHAIN
First generation blockchain is BITCOIN and with that comes the new digital revolution, it’s the trigger point of new digital era. Satoshi Nakamoto, initially described blockchain technology in the Bitcoin white paper in 2008 as a mechanism to fuel global, decentralized, and peer-to-peer transactions on the distributed ledger. Blocks (1MB per block) are connected in an immutable chain using a complicated cryptographic verification procedure.
The first generation of Blockchain invented to improve the traditional monetary system. Bitcoin and other crypto currencies were introduced in this phase, primarily written in C++ and used to employ the PoW (Proof-of-Work) consensus model. Though the Blockchain cryptocurrencies enhanced transactional experience, biggest innovation of the internet and the “internet of money” because its qualities enable peer-to-peer transmission without depending on the oversight or authority of an intermediary such as a government or financial regulator.
SECOND GENERATION BLOCKCHAIN
Ethereum is the most well-known second-generation blockchain, and it is the second-largest cryptocurrency worldwide today.
Ethereum with the implementing Smart Contracts represents the second blockchain generation. The developers started treating Ethereum as a platform to deliver a scalable experience and build decentralized applications like De-Fi and NFT called Dapps.
They also started considering the concept of Smart Contracts to make agreements more automated, secure and practical. The major development in blockchain technology was brought by Ethereum with the use of smart contracts. A smart contract is a digital contract made up of basic “If/When/Then” statements between a buyer and a seller recorded and encoded in the blockchain. The code and the agreements exist across a distributed ledger technology, decentralized blockchain network. The code controls the execution, and transactions are trackable and irreversible.
Smart contracts as trusted transactions and agreements to be carried out among anonymous parties without the need for a central authority, legal system, or external enforcement mechanism.
THIRD GENERATION BLOCKCHAIN
The third generation of Blockchain is showcasing the most efficient Blockchain-based solutions, where the impact of blockchain on the economy and market was at the forefront, the major issues that blockchain technology faced in the first two generations include scalability, sustainability, and interoperability. The Bitcoin blockchain has a slow network due to the large number of transactions attempting to be completed at a speed of just seven transactions per second. While Ethereum’s goal is to become the “world computer,” yet this objective is currently impossible to achieve because Ethereum can only execute 15 transactions per second.
Various challenges associated with blockchain solutions development like the inability to process cross-chain transactions have been resolved. The blockchain app developers have taken advantage of going with different consensus mechanisms besides PoW – Prove of Work for their projects like PoS – Prove of Stake, Prove of Space and others.
Besides, concepts like DLT (Decentralized Ledger Technology), Polkadot with it’s Rely chain(LAYER 0) and the parachains on the mainnet also have been introduced in this generation and became the answer to how blockchain will change the world.
FOURTH GENERATION BLOCKCHAIN – THE FUTURE
With businesses lining up to adopt blockchain and making it the central element of their tech solutions, 4th gen Blockchain brings approaches and solutions for industries that make it functional for business demands.
Industry focuses on automation, integration of execution frameworks, and enterprise resource planning. Blockchain helps this modern industrial revolution by providing an increasing degree of privacy and security insurance.
Some of the areas where blockchain has proved to be valuable are data collection, asset management, supply chain management, healthcare, and financial transactions among others.