Blockchain Technology Continues To Evolve And Become More Useful

By Smoljanović | Smoljanovic | 15 May 2023

Cryptocurrency evolution

Blockchains are digital ledgers that record and store data in a secure and decentralized manner. Since the creation of the first Bitcoin blockchain almost two decades ago, this technology has evolved significantly. Originally used to support cryptocurrencies, blockchains are now being used for a wide range of applications in various industries. Here are some of the ways in which blockchains are evolving.

Interoperability

One of the biggest challenges facing blockchains is interoperability. Different blockchains often use different protocols and have different standards for storing and transmitting data. This makes it difficult for them to communicate and work together effectively. To address this challenge, many blockchain developers are working on creating interoperability solutions. These solutions aim to create a common standard for blockchain data and transactions, enabling different blockchains to work together seamlessly.

Sharding

Sharding is a technique used to improve the scalability of a blockchain network. It involves breaking the blockchain network into smaller, more manageable pieces called shards. Each shard can process transactions independently, which reduces the load on the network and increases its capacity. Sharding has been successfully implemented in several blockchain networks, including Ethereum.

Zero-Knowledge Proofs (ZKPs)

Zero-Knowledge Proofs are a cryptographic technique that allows a user to prove the validity of a statement without revealing any additional information. In a blockchain network, ZKPs can be used to verify transactions without revealing the details of the transaction, such as the sender, recipient, or the amount. This technique adds an additional layer of privacy to the blockchain network, making it more secure.

Scalability

Another challenge facing blockchains is scalability. As more users join a blockchain network and more transactions are added to the ledger, the system can become slow and inefficient. To address this issue, blockchain developers are exploring various solutions such as sharding, off-chain transactions, and layer two solutions. These approaches can help to increase the transaction speed and throughput of a blockchain network.

Privacy

Privacy is another area where blockchains are evolving. While blockchains are often associated with transparency, some applications require a higher level of privacy. For example, in healthcare or finance, certain data needs to be kept confidential. To address this challenge, blockchain developers are exploring various approaches such as zero-knowledge proofs, homomorphic encryption, and secure multi-party computation. These approaches can enable private and secure transactions and data sharing on a blockchain network.

Sustainability

The environmental impact of blockchain is a growing concern, particularly for proof-of-work blockchains such as Bitcoin. These blockchains require a vast amount of computational power and energy consumption to validate transactions and maintain the network. I do not know precisely how much power is necessary for PoW, as there are many conflicting reports available using a quick Presearch search. To address this issue, many blockchain developers are exploring more sustainable alternatives such as proof-of-stake, where validators are selected based on their stake in the network rather than their computational power.

Basically, Proof of Stake is a blockchain consensus mechanism that was introduced as an alternative to the more commonly used Proof of Work (PoW) mechanism. PoS works by allowing users to validate transactions and create new blocks based on the number of coins they own. In other words, the more coins a user holds, the more validation power they have. PoS is less energy intensive than PoW, making it an eco-friendlier solution.

Real-world applications

Finally, blockchains are evolving by finding more real-world applications beyond cryptocurrency. Industries such as supply chain management, voting systems, and real estate are using blockchain technology to improve efficiency, security, and transparency. As the technology continues to mature, we can expect to see even more applications of blockchain in a wide range of industries.

Conclusion

Blockchains are evolving rapidly, addressing many of the challenges that have limited their adoption in the past. Blockchain technology has come a long way since its inception, and it continues to evolve. As these developments continue, I expect to see many more real-world applications of blockchain technology, and more businesses and individuals using this technology to improve security, efficiency, and transparency in various industries. Remember to not confuse PoS with PoW. PoW is the one that can be regarded as piece-of-shit, and yeah, PoS is certainly a real piece of work.