In today’s blog, I will be getting you acquainted with Blockchain, its definition, inception and everything you need to know as a novice developer or user. As many of us have, lately, been getting very familiar with the term Bitcoin and have started to visualize it correctly as a digital currency. So getting into a bit more detail, the technology behind it is blockchain. And please keep in mind that Bitcoin and blockchain are not interchangeable terms. The term Bitcoin is used to denote three things. First, the underlying blockchain technology; second, the protocol that runs over the blockchain technology; and third, it denotes a digital currency. In this blog, I shall specifically be talking about blockchain technology. In the blog below, I shall briefly go over Blockchain 1.0, 2.0. and 3.0 just to convince you of its exponential potential and categorization.
Blockchain originated from an innovation of designing an architecture for a new system of decentralized trustless transactions. Later on, this key innovation became its definition. Blockchain is the next big computation paradigm after the social and mobile networking. This paradigm could well be the one for this decade by establishing the “connected world of computing” by building over the blockchain cryptography. Defining blockchain in terms a layman could understand is as simple as saying it is essentially a public ledger with the potential to be a worldwide, decentralized record that could cater to registrations, inventory, and transfer of assets of finances, property, votes, software, data, and ideas. The above definition not only explains its domain but its potential as an automated system to facilitate tracking of all digital endeavors.
Diving into a little more detail, the activities in the domain of blockchain evolution and development has been broadly categorized into Blockchain 1.0, 2.0 and 3.0. The time lines for the three are specified the diagram below :
Let us get a gist of all of them in a little more detail:
Blockchain 1.0 is CURRENCY, it is everything that relates to the deployment of crypto-currencies in domains and applications that relate to cash and money. This could include currency transfers, remittance, and digital systems for payments.
Blockchain 2.0 is all about CONTRACTS. Everything in the economic board ranging from stocks, bonds, futures, loans, mortgages, titles, smart properties, and smart contracts is involved here. The domain of its span is vast in the economic market and financial applications. It is simply everything that is beyond simple cash transactions.
Blockchain 3.0 is everything that is beyond the scope of the two older versions - that is, it expands its footprints in the areas pertaining to government, health, sciences, literacy, art, and culture, etc.
The illustration above defines the layers of the three categories and how they evolved over and encapsulated the previous one.
Now another important question that arises after Blockchains is will it or how will it affect the current state of the Internet. Technically speaking, Blockchain would be like adding a new layer of the application on top of the existing application layer, adding a new tier that will allow economic transactions that could be monetary currency payments in digital form or something in the lines of complicated financial contracts.
Does this mean that Blockchains can effectively flatten global transactions and ease business processes? Yes, Blockchains are a definite answer to flattening global fields in terms of currency, assets, ideas, and information. A Blockchain is essentially a giant spreadsheet for registering all assets held by the parties globally and acts as an accounting system for transacting over them on a global scale. Now the transaction of the assets can be as varied as registration, inventory, exchange, transfer, etc. Not only the transactions, but the assets too, can vary from finance, economics, money, physical properties (hard assets), cloud, space (soft assets) and intangible assets like reputation, scale, votes, and shares, etc.
So to summarize, what blockchain can:
- Automate the tracking of all things digital.
- Bring censorship-free models of organizations into the picture.
- Decentralized repository for identity verification.
- Cheaper, efficient services between nations.
- Realize the potential of data mining.