Over the last few years, blockchain technology has progressed and penetrated the arena of technology, evolving at a pace faster than most other parallel domains. While the world is occupied with bigger players like Facebook getting involved in cryptocurrency, companies are making some revolutionary advancements for efficient use cases of the blockchain phenomenon. A lot of advancements are happening under the radar at a very quick pace. In fact, the pace of progress is so fast that within about a decade of the Satoshi white paper coming to light, the world is witnessing the emergence of blockchain 5.0.
So what is the meaning of blockchain 5.0? It’s important that we understand the impact of the progress because I believe there is a strong possibility that blockchain will become the platform for a major industrial upheaval in the next few years. The application of blockchain goes beyond just currency and finance. I have noticed five generations of blockchain that have been marked by serious upgrades in transaction speeds and throughput rate.
The Blockchain Generation Journey So Far
Blockchain generations have progressed with improvements in transaction speed and levels of security. The applications have grown beyond cryptocurrencies to industries including the diamond trade, healthcare and so on. However, more importantly, mainstream acceptance seems to be growing due to the progression of emerging generations of blockchain technology.
The journey started with bitcoin (I own some coins) when blockchain technology laid the foundation of decentralized ledgers and a cryptocurrency that gave us a peer-to-peer network for sending and receiving money. Bitcoin utilized the proof of work algorithm. But there were scalability issues.
Then came ethereum, which allowed the creation of secure smart contracts and helped open up the field for decentralized applications. Ethereum unraveled the true potential of blockchain as use cases beyond cryptocurrencies became visible. The transaction speed reportedly went up to 15 transactions per second.
The advent of Cardano and EOS as blockchain platforms marked the third generation of blockchain where the transaction speed claims go over 3,000 transactions per second. The consensus mechanism used for both EOS and Cardano is delegated proof of stake, which reportedly lowers energy costs.
Projects such as Metahash claim to be running on the fourth generation of blockchain technology. By using a multiple proof of stake (M-POS) algorithm, Metahash promises over 50,000 transactions per section.
The latest version of the blockchain is blockchain 5.0, and is one of the pioneers taking the technology forward. According to its white paper, it features a smaller block size (8,000 times smaller than bitcoin) and allows for a throughput rate of 1 million transactions per second. A smart contract on Relictum Pro can be signed with 10 counterparties, which is a unique property not yet available on any other blockchain network I’ve seen.
It’s important to understand blockchain technology’s progression and generations because of how quickly blockchain is presenting itself as an important option to solve real-world problems. Needless to say, whichever technology governs finance is likely to later govern other industries as well. As the cost for operating transactions goes down on the blockchain, I believe there will definitely be larger-scale acceptance and implementation. We could see it used in existing industries such as banking, insurance, healthcare, logistics and governance. Managers, entrepreneurs and institutions of the world should take serious notice and equip themselves to test, implement and take advantage of blockchain technology and the considerable advancements the aforementioned projects have made. This is especially true if your business deals with any of these services:
• Payments and money transfers.
• Online contracts.
• Proof of provenance (property, antiques and mortgages).
• Distributed cloud storage.
• Digital identity.
• Supply chain communications.
• Gift cards and loyalty programs.
• Networking and IoT.
There are already some noteworthy examples of blockchain adoption in various industries. For example, IBM is using blockchain for supply chain verification. According to its website, Accenture offers blockchain consulting and solutions for the insurance industry. De Beers is using a blockchain platform to trace diamonds from mine to customer. And Medicalchain uses blockchain technology to store health records.
In order to make the right decision about implementing blockchain, there are several questions you should ask. What is the current cost of collecting and processing generated business data? How trustworthy is the current data capture and filing mechanism? Will improving speed and security provide a distinct advantage over your competitors?
Businesses can either set up their own blockchain research and development team or get professional blockchain consulting services. These can be intelligent small investments that allow you to take advantage of the potential return on blockchain implementation.
Since the technology is newer and the blockchain environment is dynamic, you should make a sincere effort to understand the relevant legal and regulatory frameworks before implementing blockchain in your business processes. Also, carefully select partners or workforce members to integrate blockchain solutions for improving business processes, as there is a limited supply of experienced professionals in the domain.
There is still a long way to go, and blockchain will keep astonishing us with not just price fluctuations, but also some unprecedented features that put power in the hands of the people. I believe public ledger systems that provide transparency, security and anonymity at the same time can benefit practically every sphere of human life.