What is Blockchain 3.0? Crypto Beginner’s Guide
Within the previous years, the Blockchain technology has been subject to many innovative attempts at trying to make this technology universally adopted and accepted. So far, the limitations standing in the way of this common aspiration shared by most Blockchain technology users around the world have been mostly of technological nature.
The limitations behind the Blockchain 1.0 which were not sorted out by Bitcoin were somewhat evened out by the Blockchain 2.0 brought about by Ethereum, but now the brand new step in the evolution of the Blockchain technology is on the march.
Blockchain 3.0: Blockchain Technology’s Third Wave
Despite the bold attempts behind their creation, Blockchain 1.0 and Blockchain 2.0 haven’t managed to solve the problems that restrained the Blockchain technology from living up to the fullest of its potential and becoming a universally accepted pillar of a significant share of digital financial transactions taking place routinely around the world.
As a brand new step in the evolution of the Blockchain technology, Blockchain 3.0 is expected by the universal community of cryptocurrency users to first and foremost clear out the two biggest issues that are restraining the universal implementation potential of the Blockchain technology as such. And these issues are the ones of scalability and security.
How Does Blockchain 3.0 Work?
One particularly interesting attempt at trying to implement the Blockchain 3.0 stage of the Blockchain technology development has been taken by the COTI company that has designed a DAG (Directed Acyclic Graph) protocol to serve as a basis for the new blockchain.
Essentially, the DAG protocol uses graphs that are acyclic in nature and flow only in a designated direction. This basically implies that financial transactions implemented through the DAG protocol can not be subject to duplication and their confirmation takes place automatically based on previous financial transactions.
What are the Benefits of Using Blockchain 3.0?
The implementation of the new DAG protocol as the basis for Blockchain 3.0 can basically lead to Blockchain 3.0 becoming rid of miners or blocks as such. One big expectation behind Blockchain 1.0 was that the Blockchain technology would make digital financial transactions faster and easier.
Yet, what really happened was the fact that Bitcoin was only able to conduct financial transactions at the rate no higher than 3 to 5 transactions-per-second. Ethereum has made a bold attempt at fixing this issue, but hasn’t gotten the Blockchain technology to increase its transactions-per-second rate capacity anywhere beyond 15 transactions-per-second.
The new DAG protocol has the technological capacity to move Blockchain technology as far as Blockchain 3.0 being able to conduct financial transactions at the rate of up to 10,000 transactions-per-second.
Not only such a technological breakthrough in the implementation of Blockchain technology worldwide could essentially make the Blockchain technology of being capable of conducting financial transactions at the same rate instant payments happen in the fiat world. It could also radically solve the Blockchain technology’s issue of scalability nicely – allowing for virtually unlimitted real-time and cost-effective financial transactions.
Another benefit that the implementation of the DAG protocol as the basis of Blockchain 3.0 can bring about is the one of the increased levels of security of financial transactions. The technological incapacity of this protocol to allow for duplication, as well as its ability to ensure automatic confirmation based on previous transactions, have the potential to make the Blockchain technology as such to be seen as much more secure and reliable way to conduct financial transactions digitally.
As such, Blockchain 3.0 can potentially solve the security impediment that has been stopping Blockchain 1.0 and Blockchain 2.0 from becoming universally adopted and accepted.
What are the Drawbacks of Using Blockchain 3.0?
The DAG protocol technological capacity to make the mining process redundant within the framework of Blockchain 3.0 may be a blessing for some and a curse for others. The essentially block-less blockchains that the DAG protocol produces eliminate the need to code to confirm transactions which can potentially make financial transactions across Blockchain 3.0 platforms almost instant and very cost-effective.
The very same feature of the DAG protocol, however, can make the enormous investments of some Blockchain 1.0 and Blockchain 2.0 users into the costly and energy demanding hardware capacities required to mine cryptocurrencies – obsolete, and at the same time deprive them of the capacity to charge other Blockchain users fees for mining – stripping them off this viable source of income based on the use of the Blockchain technology.
Final Thoughts on Blockchain 3.0
Evolution is a never ending and often violent process. Based on the DAG protocol, Blockchain 3.0 has all the technological capacity needed to change the perception of the Blockchain technology worldwide forever. What used to be seen among the public as a shadowy form of conducting financial transactions online and on the dark web within Blockchain 1.0 and Blockchain 2.0 cryptocurrency frameworks, now has the potential to be perceived as a viable and practically useful alternative to conduct virtually any kind of financial transactions digitally.
From sizy money wires for business purposes to financial transaction dilemmas as simple as shopping. All of this may eventually sway more and more people and businesses away from the world of fiat currencies and into the world of cryptocurrencies, since blockchains will be becoming at least just as practical and secure as financial transactions in the fiat financial world today.
Just as important as the attraction of more mainstream users into using the Blockchain technology in their everyday financial lives, is the issue of usability of the Blockchain technology as such. The technological implementations within the Blockchain 3.0 framework essentially allow to drive the technological development of Blockchain technology.
It can drive it toward the situation when Blockchain users will no longer need to study all the technological ins and outs of using the Blockchain technology to be able to apply it for their financial purposes digitally. Within the framework brought about by Blockchain 3.0, interaction with blockchains will be virtually the same when it comes to the front-end, yet will be constantly evolving when it comes to the backend of the Blockchain technology.