In the development of any technology (like the internet or computer), one can point to landmark events that can be used to divide the process into stages. This is what we are going to do in this article with Blockchain technology. A decade-old technology has four different generations starting from blockchain 1.0 to blockchain 4.0. Every generation has its own developments and inventions. Let's have a look at each of them.
First Generation (Blockchain 1.0)
Currencies included: Bitcoin, Litecoin, Dogecoin, Reddcoin, DASH.
The original purpose of blockchain technology was to process the transactions of Bitcoin and keep the records. This is what pioneer cryptocurrency Bitcoin and his successors like Litecoin, Dogecoin did. It was later revealed that this innovation can move further and become such a sensation apart from hosting only cryptocurrencies.
First generation of blockchain was dominated by Bitcoin an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party like banks.
All cryptocurrencies falling in first generation of blockchain uses Bitcoin source code as a basis and are written in C++. They used proof of work consensus algorithm, which is slow and requires lots of power but is robust enough to keep the network secure from cyber attacks ( like 51% attack).
Bitcoin proved its stability, reliability, efficiency, simplicity and security to keep ownership records and transfer ownership from one user to another directly yet it is prone to problems like low scalability and slow transaction speed.
Second Generation (Blockchain 2.0)
Currencies included: Ethereum, NEO, QTUM
It seems that Satoshi Nakamoto didn't seriously think of possible wider utilization of the blockchain. Vitalik Buterin a Russian programmer in 2015 gave the revolutionary idea that blockchain can be used to handle Distributed Applications (DAPPs) by using Smart Contracts. contracts in the mainstream business world are managed between two separate entities, sometimes with other entities assisting in the oversight process. Smart contracts are those that are self-managing on a blockchain. Blockchain 2.0 was dominated by Ethereum project.
The idea of ICOs can never be a reality if ethereum hasn't opened its blockchain for hosting DAPPs. Ethereum also introduces Proof of Stack (PoS) consensus algorithm which is low cost and more efficient as compared to PoW consensus algorithm.
Second generation of blockchain removed many shortcomings of Blockchain 1.0 yet they still are not up to the mark in handling issues of scalability and transaction speed.
Third Generation (Blockchain 3.0)
Currencies Included: EOS, Cardano, IOTA
Third generation can handle massive amount of users and are self governed. Blockchain 3.0 focuses in solving issues high scalability, interoperability, sustainability, privacy and governance. They are fast, Zilliqa can process 100s and 1000s of transactions per second.
Cardano a popular Blockchain 3.0 project is "decentralized public blockchain and cryptocurrency project and is fully open source. Cardano is developing a smart contract platform which seeks to deliver more advanced features than any protocol previously developed. It is the first blockchain platform to evolve out of a scientific philosophy and a research-first driven approach. The development team consists of a large global collective of expert engineers and researchers"
Prices of cryptocurrencies in third generation of blockchain are low as compared to Bitcoin and Ethereum. But they have the potential to explode at any time.
Forth Generation (Blockchain 4.0)
There is no crystal clear picture of blockchain 4.0. When the third generation meets AI, IoT and Bigdata we will have the Blockchain 4.0. DeepBrain Chain and SingularityNet are working to combine the AI with Blockchain. MetaHash is another project claiming to be the 4th generation. Some key concepts introduced in MetaHash are
New York times in 1936 wrote that "A rocket will never be able to leave Earth's atmosphere" and today we are celebrating 50 years of man landing on moon. Same statements were heard about BTC in its early days. Standing at the verge of Blockchain 4.0 it be said with complete certainty that there is much more yet to come in Blockchain space.