DLTs Bring Socio-Financial Revolution — it is not all about Blockchain
Beyond technology, wealth development, and mainstream influencers, blockchain technology is laying the first stone of a financial revolution with the potential of positive global impact. Today most of us have heard about Blockchain and what media portrays as “the solution” to most of our world financial issues.
Nevertheless, the truth is that it is just one of many possible approaches. Letting go of the binary idea of “solution vs. problem” and, encountering Blockchain with an open minded perspective that acknowledges its limitations, allows us to think about innovative, and potentially more effective ways to problem-solve. In this article, I will go over 3 alternatives to regular blockchain technology, that not just share the same capabilities but each one has outperformed Blockchain in some way.
What is a DLT?
Blockchain technology is a Distributed Ledger Technology (DLT). The term “DLT” does not usually ring a bell as much as “blockchain technology” or “cryptocurrencies” do. However, understanding this term, is way more important than buying Bitcoin at the dip. A DLT is a distributed database that requires a peer-to-peer decentralized network and different algorithms in order to achieve consensus between all nodes, with the aim of broadcasting the correct data and adding information to the database. As a result, there is no need for a central authority mediating the process, which makes room for people to organize and create trustless ecosystems.
3 Alternatives to Regular Blockchain Technology.
1. Hashgraph
Hashgraph implements timestamps to transactions, allowing to arrange transactions seamlessly as they happen. Using the Gossip Protocol to share the transactions information, it can achieve up to 100,000 transactions per second — compared to Ethereum, which currently does 19.79 TPS. Swirlds patented Hasgraph’s technology and focused on the private corporate sector. If you are interested in learning more about Hashgraph, check out the Whitepaper.
2. IOTA
IOTA calls itself the blockchain for IoT. The DLT they use is called “Tangle” . It is considered a Directed Acyclic Graph (DAG). This architecture allows transactions to be added in parallel, which is impossible in standard blockchain technology. It stores all transactions in topological order, and connects them in sequence. It allows fee-less nano transactions, which make the ledger scalability improve as the network grows. Check out Whitepaper, if you want to learn more.
3. Radix
Radix categorizes transactions in events, instead of using timestamps. It implements a new consensus mechanism called Cerberus. Using sharding algorithms, it makes all data accessible and the ledger itself incredibly scalable. It is one of the most developer-friendly DLTs allowing to build dapps almost in drag and drop. Find more information in the Whitepaper.
Conclusion
This article just grasps the surface of the full extent of these 3 technologies. Nonetheless, for those who may enjoy more detailed readings, the Whitepaper is available for each of those.
There is no question of Blockchain’s ability to contribute to social and financial impact. While understanding its limitations regarding accessibility for many communities, we could still agree that blockchain technology has created a path toward a more transparent and equitable financial system. An example of this is the work carried out by Celo in the Philippines, where they provided access to international markets to a small community of weavers. In addition, another relevant case of demonstrated success are the multiple donations for Ukraine that have been made possible thanks to the decentralized system cryptocurrencies offer.
For me, the most important aspect is creating awareness around the actual social and world problems we are trying to solve. Technology is the means, but positive impact is the goal.
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