Table of Contents
The brief description of the evolution of blockchain technology and its versioning from 1.0 to 3.0 are explained below.
1. Blockchain 1.0: Currency
The idea of creating money through solving computational puzzles was first introduced in 2005 by Hal Finney, who created the first concept for cryptocurrencies (The implementation of distributed ledger technology). This ledger allows financial transactions based on blockchain technology or DLT to be executed with Bitcoin. Bitcoin is the most prominent example in this segment. It is being used as cash for the Internet and seen as the enabler of an Internet of Money.
2. Blockchain 2.0: Smart Contracts
The main issues that came with Bitcoin are wasteful mining and lack of network scalability. To overcome these issues, this version extends the concept of Bitcoin beyond currency. The new key concepts are Smart Contracts. It is small computer programs that “live” in the blockchain. They are free computer programs which executed automatically and checked conditions which are defined earlier like facilitation, verification or enforcement. The big advantage of this technology that blockchain offers, making it impossible to tamper or hack Smart Contracts. A most prominent example is the Ethereum Blockchain, which provides a platform where the developer community can build distributed applications for the Blockchain network.
Quickly, the blockchain 2.0 version is successfully processing a high number of daily transactions on a public network, where millions were raised through ICO (Initial Coin Offerings), and the market cap increased rapidly.
3. Blockchain 3.0: DApps
DApps is also known as a decentralized application. It uses decentralized storage and communication. Its backend code is running on a decentralized peer-to-peer network. A DApp can have frontend code hosted on decentralized storages such as Ethereum Swarm and user interfaces written in any language that can make a call to its backend like a traditional Apps.