Blockchain Generations

Blockchain technology changed the way assets are transferred and stored. Since the beginning, improvements have been added to allow new functions and improve the performance. So far, three generations of blockchain have been created.

First generation:
The emergence of blockchain technology is linked to the creation of Bitcoin. It was created mainly to store and transfer digital currencies. This resulted in the creation of the first public ledger within a blockchain for recording and viewing digital currency transactions without compromising the user’s identity. With this technology, each block can store up to 1 megabyte of memory. Each block is attached to the chain through a cryptographic verification process to avoid data alteration. When a transaction is made, it is grouped in a temporal memory while the miners verify the information. Despite the innovation of this technology, the process requires highly sophisticated computer equipment, high energy consumption, and a lot of time to verify the information. This first blockchain generation might be the original but it isn’t the fastest one.

Second generation:
Over time, developers wanted blockchain to do more than just to keep records of digital currency transactions. With the second generation, new applications and decentralized programs were created within the blockchain. Through the programming of automated computer codes, smart contracts were created. Smart contracts allow the agreements and conditions established by the users to be automatically fulfilled by means of codes.

Although this innovation is automated, it has a limited memory space in the blockchain for data storage and requires a higher use of computer equipment to validate and record data, which limits its scalability for speeding up and optimizing the validation process for transferring digital assets.

Third generation:
The third generation of blockchain emerges to solve problems of scalability and transaction speed. A generation that is not only satisfied with the exchange of values and the exchange of smart contracts but that also seeks to provide services in a massive and fast way.