Blockchain 3.0 is the third generation of blockchain, the distributed ledger technology (DLT) that was introduced in 2008. In this third iteration, the expectation is that it will provide greater customization and spawn new generations of applications targeted at use-cases outside the financial realm, including healthcare, transportation and government services.
What are Blockchains 1.0 & 2.0?
The initial blockchain was designed to provide an immutable, trustworthy framework to mine and trade cybercurrencies. The intent was to distribute copies of the chain across numerous hardened data centers around the world so that no one had control over the ledger, and alterations could not be made to data held within a block once it was added to the chain (known as immutable data).
In this way, all members of the chain could examine past transactions but not change them, enabling a trusted environment to manage their digital currency portfolios.
This pushed the technology from a simple ledger to an active platform capable of monitoring legal agreements between members and initiating transactions autonomously.
This has led to a wide range of distributed apps (dApps), which are also housed across the chain’s infrastructure and are therefore considered to be trustworthy and immutable as well.
With dApps, users are able to extend blockchain functionality to a wider range of digitized assets.
What is Blockchain 3.0?
Blockchain 3.0 takes the idea of dApps and adds immense scale, interoperability, and flexibility to virtually any digital process.
This should allow it to track and verify not just human activity but the functions of an increasingly automated and autonomous economy.
As artificial intelligence (AI) and the Internet of Things (IoT) coalesce into Web3 and the metaverse, blockchain 3.0 will provide a level of trust that will enhance the security of all digital interactions and provide the means to accurately determine ownership and rewards, as well as liability and responsibility.
Blockchain 3.0 also greatly increases the speed of digital transactions. While blockchain 1.0 began without about seven transactions per second and blockchain 2.0 doubled that to 15 tps, blockchain 3.0 is expected to top 10,000 tps. This, in part, is what gives it the enormous scalability that will take the technology from a niche solution to near-universal ubiquity.
What New Technologies does it Incorporate?
The key technology enabling the advanced functionality found in blockchain 3.0 is the directed acyclic graph (DAG), a processing technique designed to prevent closed-loop data cycles. When added to blockchains, DAGs facilitate the immediate processing of transactions, virtually eliminating all block times. This, in turn, ramps up the number of transactions per second, opening blockchain technology to massive scale.
Blockchain 3.0 also fosters greater interoperability between chains. Cross-chain functionality is considered a crucial development because it supports the wider spread of distributed apps and allows for greater interaction between financial entities, businesses, government agencies and other participants.
This also brings added security through greater decentralizion on both the operational and governance levels.
And while blockchain has always valued privacy and anonymity for its members, 3.0 adds a number of new technologies to further that goal. Zero-knowledge proofs, for example, allow personal information to be validated without revealing the information itself. Other new tools like ring signatures and stealth addresses enhance the ability of participants to conduct business on the blockchain without giving up their anonymity.
Are There any Examples of Blockchain 3.0 Today?
Numerous blockchain 3.0 projects are already in use today. Block.one’s EOS.IO is said to be quickly migrating to 3.0 status with its Delegated Proof-of-Stake (DPoS) consensus algorithm, which is faster and more functional than earlier Proof-of-Stake (PoS) and Proof-of-Stake (PoS) solutions.
What Are Some of the Key Use Cases?
Virtually any form of physical or virtual transaction can be recorded in a blockchain 3.0 ledger.
In supply chains, it can process the order and payment of raw materials, track their acquisition and shipment, record the steps to turn them first into source products, then to finished goods, and then confirm every step through the distribution channel right into the customer’s hands.
Healthcare can be made more efficient and less costly by automating the numerous steps needed for drug discovery, regulatory approval, safety and efficacy testing, as well as patient diagnosis, treatment and after-care, including insurance verification and payment.
Across all industries, blockchain 3.0 can improve virtually any process, from financial transactions to software and service development to sales, marketing and customer relations management. Internally, it can bring order to the often chaotic workflows within HR, records management and investor relations. All of this promises to reduce costs, increase the pace of business and enhance the competitive edge.
For individuals, blockchain 3.0 can be used to manage a wide range of tasks that, despite the advent of the personal computer more than 40 years ago, still require a lot of time and effort.
Bill paying, for one, can be automated with smart contracts. Balancing the checkbook can be done without having to trust that the bank is providing the correct information. Even future applications like autonomous driving and continuous device monitoring can be streamlined with immutable ledger technology.
In all likelihood, blockchain 3.0 will provide the underpinning for the emerging field of artificial intelligence as well. While we may be amazed at the way AI can talk and reason and perform all kinds of tasks, blockchain will be working quietly behind the scenes making sure everything is happening as it should.