As more eyes turn to blockchain technology, I have come to ponder the question: what will the future landscape of such systems be like?
To date there are numerous blockchain platforms, many of which have launched in the past year. We can see the most highly valued of those, Bitcoin and Ethereum, have recently been the subject of enormous surges in value and so have a myriad of markets beneath them in a veritable tide that seems to be rising almost all boats. And while this growth occurs, many in the development space are working on new systems to tackle the problems that blockchains like Ethereum and Bitcoin currently struggle with, namely those of efficiency, transaction throughput, and governance.
Let’s imagine what could happen over the next three to five years with differing possible scenarios that are likely to play out as the race to overcome the obstacles of scalability, efficiency and governance are approached by developers of every blockchain system. I think the future structure of the blockchain ecosystem could be categorized into one or more different models that we can call:
- The Empire
- The UN
- The Federation
In ‘The Empire,’ each chain is working on their own technology and eco-system; they do not communicate to each other but rather try to handle everything on the one-chain structure. From such an environment a dominant chain may rise up, one that absorbs the value of all other blockchains. Perhaps you’ve heard about what I will offer as the contemporary colloquial example of this: the oft referenced to “flippening” where one currency, such as Ether, swallows Bitcoin’s market cap. I think it could also go another way; a completely new chain might rise up and become the “omni-chain.” It remains to be seen how such a scenario might play out, but were a one-chain-fits-all solution to arise that blockchain platform would need to overcome significant challenges to obtain the heights of such a throne.
If such an outcome results, I’m curious to find out how the omni-chain can handle different tasks efficiently and effectively. Many Blockchains are working on this frontier.
It may be true that one chain may rise up to rule them all, but it’s also likely that a mesh of protocols may come to interlink disparate blockchains, establishing a means of communication amongst independent platforms. Such protocols would enable the sharing of assets between the separate chains. Consensus among these separate chains would be akin to political diplomacy among nation-states, each with their own goals. In such an environment let us suppose the creation of an entity not dissimilar from the United Nations might be necessary as a means of consensus governance. Although, not unlike the United Nations, it may be difficult to achieve consensus in any particular direction when there are a multitude of conflicting political goals. We know from reality, politics exist in this case and maybe hard to push for one direction amongst all players. Polkadot is working on this frontier.
Why rely on a single chain at all? There is an entire world full of unique problems we can solve with blockchain systems, and a novel approach to applying blockchain technology to those issues is to allow for customization parameters to be set in side chains. In this scenario, an internet of homogenous blockchains are connected and interact with each other. Assets can be exchanged and smart contracts can be executed coordinately. So one chain might focus on transaction speed, and another security or permissions. Each side chain can has its own characteristics and authority to make decisions on its on-chain matters; while a second authority will determine matters that impact the whole eco-system. All of the side chains might have differing characteristics, but all of them would follow the same federated set of rules.
Our team at Aelf (formerly Grid) is currently working on a blockchain platform based on a Federated Model, which we believe can provide the ecosystem the benefits of increased transaction throughput, maximized efficiency, and a governance solution. In this effort we’ve made quite a bit of headway testing solutions with deployments of native smart contracts isolated to singular dedicated chains and that meet specific business requirements which allow for completely customizable blockchains suited for varying needs.
What the future will hold?
It is difficult to say what the future holds for the blockchain ecosystem. What stands before us is a technology propelled by a global community effort. Given that sentiment, I think it makes sense to allow the many minds collaborating on blockchain systems the room to develop while establishing a framework of protocols to follow pursuant to interoperability. On the tenets of democracy, innovation and liberty, the I believe Federated Model Aelf is developing ascribes to that line of thought while permitting parallel processing and allowing for differing technological solutions to coexist together.
Time will tell how the efforts of those currently exploring blockchain technology play out and ultimately separate the winners from the losers in the blockchain ecosystem. The solutions that best stand out to us and merit development are likely to be those that pave the way forward.
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