What next?

The conversation around blockchain is changing. We’re only now starting to understand this technology’s full potential. As we approach 2019, it seems like it will contrast heavily with this ending year, with blockchain facing increased scrutiny by regulators and post-bubble market dynamics. Nevertheless, these conditions should give blockchain greater clarity and a more solid market footing.

Blockchain 1.0

The potential use cases have already exploded and every day we see articles describing these. We started with a simple ledger that records transactions in sequence and the entire chain is distributed with verification happening across multiple nodes to confirm a transaction. Bitcoin gave us the original blockchain, call it Blockchain 1.0. We then saw this evolve to something which could include logic to perform all kinds of tasks.

Blockchain 2.0

The first Blockchain 2.0 implementation was the Ethereum Network, and the added code was called Smart Contracts.

Scalability Trilemma

Both of these became massive global networks, with nodes popping up everywhere to perform verification and miners earning rewards for their verification efforts. Further alternative blockchains were developed, with improvements in security, transaction speed and other areas, but the core pattern was a massive distributed public network on which new types of solutions could be built. It really was the start of something entirely new in the tech world.

As the use of blockchain becomes more and more prevalent, the issue of scalability also grows. The idea of the Scalability Trilemma is that from security, decentralization and scalability all blockchains can only have two out of these three properties.

Blockchain 3.0

Instead of attempting to solve scalability while keeping both security and decentralization, some blockchains sacrifice the decentralized property in order to allow for scalability. In blockchains such as enterprise blockchains, they have less need for decentralization as their use cases are usually limited to very specific users. Platforms such as EEA, Hyperledger, Corda, Chain, Ripple, Quorum, Cosmos ... exist precisely to enable businesses to implement their own blockchain use case ideas without starting from scratch. Let’s call enterprise or private blockchains Blockchain 3.0.

The evolution of public and private blockchains will continue though. What do you think will be the next step - Blockchain 4.0?