Are you looking for a Blockchain for Dummies beginner's guide? The blockchain space is arguably the space with the most innovation in the last several years. Since its debut in 2009, blockchain technology has transcended the limitations of being confined to strictly financial use cases. Projects such as Ethereum, Solana, and Cardano have enabled developers to create decentralized applications on top of blockchains without them having to create and maintain their own blockchain. With so much going on in the blockchain space, many in the blockchain space are eager to see what the future holds for blockchain technology and the space as a whole. In this article, we will take a look at some of the factors that could potentially influence the future of blockchain technology as well as some of the outcomes that are currently envisioned by community members within the space.
Disclaimer: We want to emphasize that this is not financial advice. Cryptocurrencies operate in a volatile market, where values can drastically fluctuate in a blink of an eye. It is imperative to conduct thorough research and seek guidance from a qualified financial advisor before investing.
What is a Blockchain?
To initiate our introductory guide to blockchain for beginners, let's embark on a quick refresher concerning the essence of a blockchain. In its essence, a blockchain stands as a decentralized digital ledger, remarkable in its capacity to conduct transactions directly between users within its network without necessitating an intermediary or central authority. This distinguishing feature underscores the autonomy and self-sufficiency inherent in blockchain networks. The communal fabric forms the bedrock, wherein the community shoulders the dual responsibility of validating transactions and upholding the entirety of the blockchain network. From its inaugural debut with Bitcoin in 2009, the trajectory of blockchain technology has traversed remarkable milestones, evolving into a formidable force that drives some of the most lauded innovations of recent years.
With this preliminary grasp of blockchain's fundamental concept, let's pivot towards a panoramic view of the contemporary landscape that defines the realm of blockchain technology.
Snapshot of the Current Blockchain Space
The current trends in blockchain technology are non-fungible tokens (NFTs) and the metaverse. Both of these exciting technologies gained popularity during the draconian lockdowns and offered people around the world a way to generate a small income while some of them were left unemployed and everyone across the globe was stuck at home during the lockdown.
Non-Fungible Tokens Explained
A non-fungible token, or NFT for short, is a blockchain-backed digital representation of an item or asset. Unlike cryptocurrency, non-fungible tokens are unique and cannot be traded for something similar or be replicated. When we say a cryptocurrency coin is fungible, it means that one cryptocurrency coin can be replaced with another coin of the same cryptocurrency. This is not the case for NFTs since each non-fungible token is unique.
So what can be represented as an NFT? Well, anything that can be represented digitally can become an NFT. So this could be an artwork, a musical rhythm or beat, even certificates, and title deeds.
The first time people really started becoming aware of non-fungible tokens was when they took the art world by storm and one artist sold a piece of digital artwork for several million dollars. Since then, NFTs were incorporated in play-to-earn blockchain games in the form of virtual land, animated characters, and digital clothes, also known as wearables, for players’ avatars. NFTs also form the foundation for play-to-earn games as they make it possible to turn in-game assets into tangible assets that can be monetized and sold on NFT marketplaces.
As mentioned, another exciting innovation in the blockchain space is the metaverse. Let’s take a look at what a metaverse is.
Exploring Data on Blockchains with Blockchair
Blockchair stands out as a trailblazing blockchain explorer, uniquely uniting an array of diverse blockchains under a single search engine.
At its core, Blockchair is driven by the vision to democratize and simplify the comprehension of blockchain data, catering to an extensive spectrum of individuals intrigued by the nuances of both blockchain technology and the crypto landscape. A foundational pillar of its mission lies in safeguarding user privacy, a tenet it upholds as paramount during the developmental process of its products.
In the realm of Blockchair, the capability to explore and analyze an array of prominent blockchains is rendered accessible. These encompass the likes of Bitcoin, Ethereum, Litecoin, Cardano, Ripple, Polkadot, Dogecoin, Bitcoin Cash, Solana, Stellar, Monero, EOS, Kusama, Bitcoin SV, eCash, Zcash, Dash, Mixin, and Groestlcoin. The platform empowers users to seamlessly navigate through blocks, transactions, and their intricacies, all while providing a spectrum of filtering and sorting options, amplifying the granularity of analysis. Comprehensive full-text searches across these blockchains further bolster the analytical prowess.
An ambitious aspiration fuels the Blockchair team: to metamorphose into the equivalent of Google for blockchains. Their ongoing endeavors encompass the integration of search capabilities into other decentralized projects, such as IPFS and SWARM. Moreover, Blockchair extends a valuable tool for researchers, facilitating bulk data export from various blockchains, thus catering to a diverse range of professional needs.
Blockchair emerges as a pioneering force, culminating in a comprehensive search engine poised to redefine the exploration of multiple blockchains, thereby galvanizing accessibility and insights within the intricate tapestry of the blockchain ecosystem.
The Current Development Drive in The Blockchain Space
The race to create a blockchain solution that addresses the 3 main problems of blockchain technology simultaneously is currently the main focus of blockchain projects in the space. These 3 problems are the interoperability of blockchain technology, its throughput, and its scalability.
Blockchain interoperability refers to the ability for blockchains to seamlessly share information and data with each other. With all of the blockchain projects currently in the space, it would be beneficial to the whole community if members were able to leverage the functionality of all these blockchains. This is why there is a large number of projects that are looking to create protocols that make blockchain interoperability possible.
A blockchain’s throughput refers to how many transactions a blockchain can process per second. If a blockchain has a high throughput, it will be able to process more transactions before a backlog occurs. This will also decrease the transaction times on the blockchain.
Before blockchain technology can be adopted by the masses, it must be able to scale to the necessary degree to cope with mainstream adoption. The key here is for a blockchain to be able to process the increased volume of transactions. It is for this reason that blockchain scalability is linked to blockchain throughput as the two go hand in hand.
To date, these problems have not been solved simultaneously in the same blockchain project. Solving all 3 of these problems would unlock the technology’s potential and open up a multitude of new use cases.
Another key focus in the blockchain space is the multichain debate. Let’s take a look at what this debate is in more detail.
The Multichain Debate
The landscape of the blockchain domain is adorned with a multitude of distinct blockchain projects, each meticulously tailored to serve a unique use case. While these projects might occasionally converge upon similar use cases, their individuality remains pronounced. In this bustling milieu, a sentiment emerges within the blockchain community—a notion that the amalgamation of features across diverse blockchains could potentially yield collective benefits for the entire ecosystem. This sentiment catalyzes the multichain movement—a compelling concept that envisions an expansive, interconnected blockchain ecosystem.
This movement is rooted in the aspiration to harmonize the strengths and attributes of various blockchain projects, nurturing a comprehensive and cohesive environment. Proponents of this approach envision a unified network that optimally harnesses the diverse functionalities of distinct blockchains, thereby fostering efficiency, scalability, and broader utility.
However, divergent perspectives prevail within the blockchain realm. Contrasting with the multichain proponents, another school of thought advocates for the coexistence of multiple blockchains, each retaining its autonomy and niche within the broader landscape. This viewpoint underscores the vitality of diversity, arguing that the distinct attributes and specializations of individual blockchains contribute to a resilient ecosystem. This philosophy contends that a network marked by diverse blockchains can accommodate a broader range of use cases, accommodating the unique requirements of various industries and applications.
The Future of Blockchain Technology
Multiple factors influence the future of blockchain technology. Factors such as:
- Whether or not the sustainability of blockchains is addressed.
- If the blockchain trilemma is solved.
- The blockchain community’s decision regarding the multichain movement.
These are some of the main factors that influence how the future of blockchain technology will look. Only time will tell what the future holds for technology. If the blockchain trilemma is solved, then blockchains will have the required functionality and capabilities for mainstream adoption and usage. This is one of the biggest concerns around blockchain technology as it will remove the majority of arguments that are not in favor of blockchain adoption, giving blockchains the required throughput and scalability for global mainstream adoption.
The sustainability of blockchains refers to whether or not blockchains will have the necessary capabilities to play a bigger role in the future, and the environmental impact of blockchain technology. If the blockchain trilemma is solved, then blockchains have better throughput and are then also more scalable which will allow them to be used in a plethora of new use cases; forming the backbone of a lot of the technological systems in the future. Furthermore, with the majority of blockchains shifting to a more environmentally-friendly consensus protocol, the environmental impact of blockchain technology will not be a topic of discussion in the blockchain space for much longer.
Lastly, the decision around the multichain movement could also change how the future of blockchain technology looks as it will either lead to a future where we have one large, interconnected blockchain ecosystem, or a future where individual blockchain projects compete with each other in the race to own the largest market share. Of course, by promoting the multichain movement, addressing the blockchain trilemma will be a lot easier because the functionality of each blockchain could be leveraged to overcome all of blockchain technology’s current limitations and restrictions. It really depends on whether or not the members of the blockchain community can mutually agree on one outcome for the movement.
Blockchain for Dummies: Recap
The future of blockchain technology depends on a number of factors, mainly the sustainability of blockchains, whether or not the blockchain trilemma is solved, and the blockchain community’s decision around the multichain movement. Only time can really tell what the future holds for blockchains. However, the future is looking bright for the technology as more and more use cases are unlocked for blockchain technology on almost a daily basis. Furthermore, the current adoption rate of blockchain-based digital currencies is also a promising sign that blockchains will play a substantial role in the future.