In the development of the Internet, one can point to landmark events that can be used to break the process down into phases. These major milestones include the creation of the first large area computer networks in the 1960s, the development of an email system in the 1970s, the creation of Ethernet later this decade, the advent of the World Wide Web in the 1990s, and the Creation of the first browsers and search engines later this decade, among others. After each of these striking developments, the Internet has changed dramatically. Every step was critical in creating the internet we know and rely on today.
It is also possible to look back at the development of the blockchain and to divide it into phases, which are characterized by important developments and inventions. Blockchain technology has only existed for a fraction of the time the internet has, so important developments are likely to come. Experts have already started to divide the history of the blockchain into at least three important phases.
While the ideas that would flow into the blockchain were swirling around in computer science, it was Bitcoin’s pseudonymous developer Satoshi Nakamoto who outlined the blockchain as we know it in the whitepaper for BTC. This is how blockchain technology began with the Bitcoin network. While blockchain has since been used in a variety of other areas, in a sense it was designed specifically for this digital currency and to advance the goals of digital currencies more generally.
In its earliest stages, blockchain established the basic premise of a shared public ledger that supports a cryptocurrency network. Satoshi’s idea of the blockchain uses 1 megabyte (MB) blocks of information on Bitcoin transactions. Blocks are linked together through a complex cryptographic verification process and form an immutable chain. Blockchain technology in its earliest form created many of the central features of these systems that remain to this day. In fact, Bitcoin’s blockchain remains largely unchanged from these earliest efforts.
Over time, developers began to believe that a blockchain can do more than just document transactions. For example, the founders of Ethereum came up with the idea that assets and trust agreements could also benefit from blockchain management. In this way, Ethereum represents the second generation of blockchain technology.
The main innovation brought about by Ethereum was the emergence of smart contracts. Typically in the mainstream business world, contracts are managed between two separate entities, sometimes with other entities to aid in the monitoring process. Smart contracts are those that manage themselves in a blockchain. They are triggered by an event such as the expiration date or the achievement of a certain price target. In response, the smart contract manages itself and makes adjustments as needed without the need to enter external units.
At this point, we may still be realizing the untapped potential of smart contracts. So whether we really moved on to the later stage of blockchain development is controversial.
One of the main problems with blockchain is scaling. Bitcoin continues to suffer from transaction processing times and bottlenecks. Many new digital currencies have tried to rework their blockchains to address these issues, but with varying degrees of success. Going forward, one of the most important developments paving the way for future blockchain technology will likely have to do with scalability.
In addition, new applications of blockchain technology are constantly being discovered and implemented. It is difficult to say exactly where these developments will lead the technology and the cryptocurrency industry as a whole. Blockchain fans are likely to find this incredibly exciting; From their point of view, we are living in a moment with an epoch-making technology that continues to grow and develop.