The blockchain industry may be young, but it has already lived through three generations of platforms. The first and second generations have certainly been impressive in their own ways, especially in innovation. However, time has shown that they aren’t without flaws.
Some of the perceived flaws we’ve discussed previously here, such as the lack of interoperability and the limited transaction throughput of the Bitcoin and Ethereum networks. As with any groundbreaking technology, there’s always going to issues that come to light once they receive significant adoption.
Whilst these limitations are being addressed by their respective communities, 3rd generation platforms have emerged. Some of these complement existing blockchain platforms, others offer entirely new platforms. They have designed these platforms to be capable of resolving scaling problems instantly as they arise, as well as featuring built-in functions that allow for smooth and easy interoperability with other blockchains.
There are several noteworthy third-generation blockchain platforms, and we’re going to take a closer look at how they work and what they offer.
Launched in 2017, Cardano is an open-source proof-of-stake blockchain platform that aims to achieve the interoperability, scalability, and sustainability needed for real-world applications. This, in turn, will (and already has) open new markets and solve a broad range of problems across multiple industries, such as education, retail, agriculture, government, finance, healthcare, and others.
Cardano uses the Ouroboros protocol, which provides sustainable scalability for global systems without compromising performance and security against bad actors and Sybil attacks. It achieves this balance through a combination of multi-ledger, side chains, and parallel transaction processing through multi-party state channels.
A blockchain network that operates as a sort of a “relay chain”, Polkadot’s main purpose is to provide interoperability. It achieves this by connecting other blockchains to itself and allowing them to run independently within it, supporting transfers of all kinds of assets or data between them.
In addition to interoperability, Polkadot also provides economic scalability as it enables a common set of validators to secure multiple blockchains. Additionally, it features transactional scalability which is accomplished by spreading transitions across multiple parallel blockchains.
As an additional advantage, this blockchain doesn’t require hard forks to upgrade, introduce new features, or fix bugs.
Run by a Public Benefit Corporation (PBC) dedicated to scaling Ethereum, Optimism is an implementation of the Ethereum Layer 2 Optimistic rollup. Rollups are layer 2 scaling platforms that keep funds on the blockchain but delegate most of the work to side chains to alleviate the workload from the main chain.
Optimism supports all of Ethereum’s DApps and helps the blockchain run computations off-chain, while only publishing transaction data on-chain.
This way, it’s increasing its transactions per second and reducing its gas fees by a hundred times or more, addressing Ethereum’s scaling issues without sacrificing decentralization or security.
Formerly known as Matic Network, Polygon is a protocol and framework that provides tools for building and connecting Ethereum-compatible blockchain networks. As a layer 2 scaling platform, it aggregates scalable solutions on Ethereum and supports a multi-chain Ethereum ecosystem.
To assist in solving Ethereum’s scaling problems that hinder its mass adoption, Polygon deploys its own proof-of-stake Commit Chain and More Viable Plasma L2 scaling solution, prioritizing performance, security, and user experience.
The Commit chains aggregate transaction batches, mass-confirm them and then return the data to the main chain. Polygon plans to eventually add other layer 2 scaling mechanisms into the mix, such as Optimistic Rollups, and extend its scalability-focused product to other blockchains, which will enable cross-chain interoperability.
Avalanche is a proof-of-stake, eco-friendly, and low-cost programmable smart contracts platform that enables building and launching highly scalable Solidity-compatible Ethereum DApps.
Thanks to its innovative technology, it can support the seamless and secure operation of a global network of millions of inter-connected validators with minimal hardware.
This platform was designed from the ground up to connect existing blockchains to itself, import balances, support various scripting languages and virtual machines, as well as to support multiple deployment scenarios, without tradeoffs in terms of speed and security.
A high-performance blockchain designed to support the creation of DApps, Solana is the open-source platform that uses proof of history and other innovations to allow the network to scale at the rate of Moore’s Law, without integrating with multiple shards or layer 2 solutions.
One of its other important features is ensuring composability between ecosystem projects by maintaining a single global state as the network scales - all while maintaining a high level of security and blazing speeds.
With Solana, a centralized database can process 710,000 transactions (up to 176 bytes) per second on a standard gigabit network. Thanks to the use of Optimistic Concurrency Control, it allows a centralized database to replicate itself and retain high availability without dramatically affecting this transaction rate.
An open-source project initially built by the Tendermint team, Cosmos is an ecosystem of blockchains that can scale and interoperate with each other. It accomplishes this with the use of the Inter-Blockchain Communication (IBC) protocol, which allows users to engage in the free exchange of assets and data across these blockchains.
The platform also uses other open-source tools, including Tendermint and the Cosmos SDK, as well as allowing everyone else to enrich the ecosystem by building additional tools. All these tools work together to allow developers to create scalable, interoperable, and secure DApps.
They also let participating blockchains keep their sovereignty, process transactions more swiftly, and communicate seamlessly with other chains in the network. The ultimate goal? To create an Internet of Blockchains.
These third-generation platforms were created to solve the existing pains of the blockchain industry growth that are hindering its widespread mainstream adoption. How good on this promise will they make in the long run and will there be a need for more innovation? Time can only tell.
Whatever happens, one thing’s for sure - change is the only thing that’s constant in this brave new world.
Have any questions or comments, or have you noticed other important third-generation blockchain platforms that we missed? Feel free to drop us a comment, we’d love to hear from you!
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