Types of Blockchain and Evolution 1.0 to 4.0
The two most important concepts which were combined to create blockchain technology were asymmetrical cryptography and distributed IT architecture.
Asymmetrical cryptography is a system of public and private keys which allows users to confidently exchange encrypted information with unknown third parties.
A distributed IT system is a series of independent computers, known as nodes, which can communicate with each other over a network with no central node, much like the Internet.
Before I am starting to explain types of it , behind the strategy of blockchain in more detailed tech side.
You will check below link for look related with to have a idea what is it, how is it useful for introduction to blockchain.
Introduction of blockchain
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The world is continually changing, driven by technological innovations that affect the way we live and do business. The history of the world economy is intimately linked to technological progress.
Wealth is generated in market economies by the flow of goods and services over business networks.
For any business implement blockchain to their processes and would like to be successful, participants need to agree on the approach for sharing transactions and smart contracts.
Smart contracts fuel business process innovation with automation, speed, and compliance without hefty costs and risks.*1
*1 Blockchain for business IBM edition.
In the same way that HTTP(S) is an agreed approach for sharing information over the internet, there needs to be a common standard for blockchains (at least within each business network) for the network to grow and thrive.
One of the most important decisions is the choice of blockchain technology: the software that provides the implementation of the shared ledger and smart contract execution framework.
This decisions related with which type of blochain will more useful for their businesses public, private, permissioned, permissionless etc.
Public and Private Blockchains
A public blockchain network is a blockchain network where anyone can join whenever they want. Basically, there are no restrictions when it comes to participation.
More so, anyone can see the ledger and take part in the consensus process.
Some technical terms explanation related with blockchain by Consensys
Proof of work consensus mechanism: Miners use their computer power to solve a mathematical puzzle in order to participate in the block validation process.
Proof-of-stake consensus mechanism: Miners are granted the right to validate blocks by providing some of their currency already they already hold into escrow.
Hash function is any function that can be used to map data of arbitrary size onto data of a fixed size.
A hash is the output which is a predetermined length and format, regardless of the length and format of the source text.
An Oracle is an agent that finds and verifies real-world occurrences and submits this information to a blockchain to be used by smart contracts.
Proof-of-authority uses a set of “authorities” — nodes that are explicitly allowed to create new blocks and secure the blockchain.
The chain has to be signed off by the majority of authorities, in which case it becomes a part of the permanent record.
A consensus algorithm is a process used to achieve agreement on a single piece of information among distributed processes or systems.
Blockchain Evolution from version 1.0 to 4.0
Version 1.0: Cryptocurrency
The implementation of distributed ledger technology led to its first-ever application, and that was the introduction of cryptocurrency, Bitcoin. After Bitcoin, various other cryptocurrencies were introduced to allow financial transactions based on Blockchain.
Version 2.0: Smart Contracts
After Bitcoin, version 2.0 extends the concept of Bitcoin beyond cryptocurrency.
There were several challenges that came with Bitcoin, and those were wasteful mining and lack of network scalability. To deal with such issues, version 2.0 introduced smart contracts.
Smart Contracts are autonomous computer programs that execute automatically when the desired conditions are satisfied.
The aim of the smart contract is to provide security while processing transactions and reduce excess transaction costs and time.
Version 3.0: Introduction to dApps
dApps are Blockchain-based apps, or we can say that dApps are a part of the software that communicates with the Blockchain, which manages and controls the state of all network actors.
Unlike centralized apps that run on a single computer, blockchain-based apps run on a P2P network.
A few of the top-ranked dApps are ForkDelta, CryptoKitties, Bancor, Ether Shrimp Farm.
Version 4.0: Blockchain for Industry
Various organizations, industries, enterprises, and businesses are willing to adopt Blockchain technology for their efficient operations. Due to their decentralized nature, distributed ledger technologies like blockchain can easily resist malicious attacks and frauds.
In the my next article explaining for blockchain applications , value propositions for the industries.
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