Ten years ago, Bitcoin appeared as a solution for peer-to-peer money transfers. Finally, it was possible to pay someone on the other side of the world without any intermediaries. Since then, the philosophy, as well as the technology behind Bitcoin, has been aimed at empowering the users and increasing decentralization.
The appearance of Ethereum marked the start of a new era, where smart contracts brought innovative ways of building crypto projects.
But even more than a year after the peak of Initial Coin Offerings (ICOs), we still do not have anything blockchain-based that is even remotely adopted. Bitcoin remains the most popular blockchain project, and it has a bad name associated with criminal activities.
So, what is preventing Blockchain from hitting the mainstream? What is the stumbling point on the road to mass adoption of this amazing technology?
The Problem of Decentralization
When Cambridge Analytica scandal erupted, blockchain was one of the possible solutions. But, moving all the data from Facebook to blockchain would require massive infrastructure. In fact, the decentralization of all the Facebook data would require thousands of times more resources than a centralized solution which is currently in place. This means that blockchain is often a bit unpractical when it comes to infrastructure and consumption of resources.
The other problem lies in the processing capacity. Visa and Mastercard are able to process over 5,000 transactions each second, while Bitcoin still stands at 7 transactions per second.
Bitcoin was based on the first generation of the blockchain. Ethereum was the second generation with smart contracts, higher transactions-per-second count and scalability. But what should the third generation of blockchain do? The main guess is it should improve the existing frameworks by improving resource consumption, interoperability, scalability, privacy and governance.
New techniques are also being used to get there, such as Directed Acyclic Graph (DAG). DAG makes each block interconnected with other nodes, allowing it to process several transaction chains in parallel. Naturally, DAG is not without flaws. For example, security can be a potential issue. Due to its structure, DAG breaks under 33% attack, instead of a 51% attack that can break Blockchain.
So, while some projects focus on Blockchain, others explore the use of DAG. We have also seen a shift from Proof of Wor (PoW) originally used in Bitcoin to Proof of Stake (PoS) in Ethereum (not completely shifted from PoW, but plans to do so). The PoS is much more eco-friendly, as it uses way less energy than the PoW algorithm. There are even newer models such as Proof of Activity (PoA), Proof of Burn (PoB), Proof of Capacity (PoC) and many others.
Many great ideas are being developed to solve problems that exist in the blockchain ecosystem. The thing is — we will have to wait and see what the future will bring. We at Quras are working hard to implement many innovations to our blockchain, aiming to solve problems and provide a stable, secure and private platform for all of our users.
What is certain is that in order to go mainstream the technology needs to be easy to use and comprehend, as we still haven’t reached the level of “tech-savviness” that would allow everyone to understand and use cryptocurrencies easily.