One may point to major events in the evolution of the internet that can be used to split the process into phases. Among these significant milestones are the establishment of the first wide-area computer networks in the 1960s, the development of an electronic mail system in the 1970s, the establishment of ethernet later that decade, the establishment of the world wide web in the 1990s, and the establishment of the first browsers and search engines later that decade. The internet altered dramatically as a result of each of these landmark advancements. Each stage was critical in the development of the internet we know and depend on today.
Similarly, it is feasible to look back on the evolution of blockchain and split it into phases denoted by significant advancements and innovations. Blockchain technology has just been around for a fraction of the time that the internet has, so significant advancements are still expected. Even today, academics have started to split blockchain history into at least three major periods.
Stage 1: Bitcoin and Digital Currencies
While concepts for the blockchain were circulating in computer science circles, it was Bitcoin’s pseudonymous creator, Satoshi Nakamoto, who defined the blockchain as we know it in the white paper for BTC. Thus, blockchain technology started with the Bitcoin network. While blockchain has subsequently been used in a wide range of other fields, it was intended specifically for this digital currency and promoting the purposes of digital currencies more widely.
In its early phases, blockchain established the fundamental idea of a shared public ledger that enables a cryptocurrency network. Satoshi’s blockchain concept makes use of 1 megabyte (MB) chunks of data on bitcoin transactions. A complicated cryptographic verification mechanism connects blocks to build an immutable chain. Many of the essential aspects of these systems that exist now were established by blockchain technology in its early forms. Indeed, the blockchain of bitcoin has remained virtually untouched since its inception.
Stage 2: Smart Contracts
With the passage of time, developers started to assume that a blockchain could do more than just record transactions. The creators of ethereum, for example, believed that assets and trust agreements may benefit from blockchain administration as well. In this sense, ethereum is the second generation of blockchain technology.
The introduction of smart contracts was the most significant breakthrough brought forth by ethereum. Contracts in the mainstream corporate sector are often administered by two independent organizations, with additional businesses aiding in the supervision process. On a blockchain, smart contracts are self-managing contracts. They are triggered by an event, like as the expiry of a contract or the fulfillment of a certain pricing objective; in reaction, the smart contract manages itself, making modifications as required and without the involvement of third parties.
We may still be in the process of realizing the untapped potential of smart contracts at this stage. As a result, whether we have genuinely progressed to the next level of blockchain development is questionable.
Stage 3: The Future
Scalability is a critical challenge for blockchain. Transaction processing delays and bottlenecking continue to plague Bitcoin. Many new digital currencies have sought, with varied degrees of success, to alter their blockchains in order to address these challenges. Scalability is expected to be one of the most crucial advances paving the way for blockchain technology in the future.
Aside from that, new blockchain applications are constantly being found and deployed. It’s tough to predict where these advancements will take technology and the bitcoin sector as a whole. Blockchain supporters are likely to find this quite exciting; from their viewpoint, we are living in an epochal time with an epochal technology that is still growing and unfolding.
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