Blockchain technology has gained popularity because it offers decentralized and transparent storage to record transactions and data. Generally Blockchain relates with the bitcoin and cryptocurrency. Since 2009, Blockchain technology has been growing and developing; it is now more than the bitcoins and cryptocurrency. The following description is demonstrating the evolution of blockchain technology, including the progression of blockchain technology from version 1.0 to version 3.0.
Blockchain Version 1.0: Cryptocurrency
Blockchain 1.0 is the first cryptocurrency, which records the bitcoin transactions on the public ledger in a secure method. The implementation of Distributed ledger technology was the reason behind its first version. It is a permission-less blockchain where any participant can perform a valid transaction of bitcoins.
It works as a simple state machine, which can be used as a platform for the bitcoin transaction. State machine manages the transition between valid states similarly Blockchain records and manages the bitcoin transactions between valid participants of the network.
Blockchain Version 2.0: Smart Contract
The new concepts in the blockchain are Smart Contracts, it is a small self-executing computer programs that exist in the blockchain. In Blockchain 2.0, Bitcoin is replaced by ethereum. The smart contract is one of the most successful blockchain applications, it helps in reducing transactions cost-effectively. Ethereum network is the best platform for creating and executing smart contracts. This is used as a replacement for the traditional contracts.
Blockchain Version 3.0: Dapps
The Dapp is a short form for Decentralized application. Decentralized applications run opposite to centralized applications running on a single computer. A Dapp is like a conventional app, it can have frontend (written in any language) that can make calls to its backend. A Dapp can host its frontend on decentralized storages, including Ethereums Swarm.
Decentralized apps do not need to run on top of a network of blockchains. There are many decentralized applications running on a P2P network, like BitMessage, BitTorrent, Tor, Popcorn, etc.
Blockchain Version 4.0: Blockchain For industry
The objective of the fourth generation blockchain is to resolve the entire issue with the previous three generations. Blockchain 4.0 explains the strategies and methods that make blockchain technology available to business demands. Various companies are trying to bring a scalable, adaptable, and affordable blockchain to the world. Businesses are willing to adopt the blockchain technology, but we need a safer and more robust blockchain.
We don’t have a clear picture of what it looks like as the fourth blockchain generation is not yet here. Some developers feel a mix of third-generation blockchain and AI is going to spawn Blockchain 4.0.