Are you a beginner in the Blockchain space? Want to get started with this futuristic technology? This article talks about various versions of Blockchain, providing a clear understanding of exactly what this technology is all about.
Table of Contents
- What Exactly is Blockchain Technology?
- Types of Blockchain Versions
* Version 1.0: Cryptocurrency
* Version 2.0: Smart Contracts
* Version 3.0: Introduction to dApps
* Version 4.0: Blockchain for Industry
- Wrapping Up
What Exactly is Blockchain Technology?
A Blockchain is a peer-to-peer (P2P), decentralized, distributed ledger technology with a continually growing public ledger that keeps a permanent record of all the transactions securely and immutably. A blockchain is a network of information-containing blocks where each block tracks all recent transactions and, once done; it is stored permanently on a Blockchain network.
It is different from the traditional database because Blockchain is decentralized because there is no intermediary or mediator, and it is fully confidential.
The technology has gained a lot of public attention since 2009, and since then, it is continually growing and developing, and now it is more than bitcoins and cryptocurrency. Its demand is because of its ability to offer decentralization, immutability, transparency, and privacy.
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Types of Blockchain Versions
As we have understood what exactly Blockchain is, let’s delve deep into the evolution of this technology, including blockchain progression from version 1.0 to version 4.0.
- Version 1.0: Cryptocurrency
The implementation of distributed ledger technology led to its first-ever application, and that was the introduction of cryptocurrency, Bitcoin. After Bitcoin, various other cryptocurrencies were introduced to allow financial transactions based on Blockchain.
Satoshi Nakamoto, a pseudonym for a different person or persons who invented Bitcoin, wanted to create a “trust-less” cash system by removing third-party intermediaries, unlike in traditional systems that require mediators to perform digital monetary transfers.
- Version 2.0: Smart Contracts
After Bitcoin, version 2.0 extends the concept of Bitcoin beyond cryptocurrency.
There were several challenges that came with Bitcoin, and those were wasteful mining and lack of network scalability. To deal with such issues, version 2.0 introduced smart contracts. Smart Contracts are autonomous computer programs that execute automatically when the desired conditions are satisfied. Such contracts run on the blockchain network without any plausibility of downtime, fraud, or error.
The aim of the smart contract is to provide security while processing transactions and reduce excess transaction costs and time. Unlike traditional contracts, smart contracts maintain complete transactional transparency, offer security and confidentiality by making use of cryptographic algorithms.
Smart contracts can be applied to trade finance, supply chain, property ownership, and many other domains.
- Version 3.0: Introduction to dApps
dApps are Blockchain-based apps, or we can say that dApps are a part of the software that communicates with the Blockchain, which manages and controls the state of all network actors. Unlike centralized apps that run on a single computer, blockchain-based apps run on a P2P network.
Such applications use decentralized storage and communication, and most have their backend code running on a decentralized network, unlike centralized applications that run on centralized servers.
A few of the top-ranked dApps are ForkDelta, CryptoKitties, Bancor, Ether Shrimp Farm, PoWH 3D, Moon, Inc., among others.
- Version 4.0: Blockchain for Industry
Although the value of Blockchain in industries is yet to be defined, there are still some areas such as finance, supply chain, manufacturing, healthcare, logistics, including others in which this technology provides prospective benefits. Technology 4.0 demonstrates the strategies that make Blockchain available to business requirements.
Various organizations, industries, enterprises, and businesses are willing to adopt Blockchain technology for their efficient operations. Due to their decentralized nature, distributed ledger technologies like Blockchain can easily resist malicious attacks and frauds. With continuous efforts, Blockchain developers and technocrats are trying to build a scalable, adaptable, and affordable Blockchain for the world.
Undoubtedly, Blockchain has made a lot of progress since its invention. Those who have understood its potential are ready to go beyond the paradigm of a central system for anything and everything. Due to its decentralized nature, technology can easily resist malicious attacks and can execute transactions instantly. The latest upgraded version that is version 4.0 is leading us towards faster processing and sustainable technology in terms of immutability, anonymity, privacy, secure transactions, and cost-efficiency. But still, there is a call for a safer and more robust Blockchain.
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Blockchain Versions Explained: A Guide for Beginners