The blockchain’s evolution is quite similar to the evolution of the Internet. There was no comprehension of the global network’s capabilities in the early and mid-1990s. Static webpages and the most basic search engines were available. But we all know what happened to the Internet in the end: social media, instant messengers, and mobile applications have made it into every aspect of life. With the blockchain, it’s effectively the same.
It all began 40 years ago with cryptography research. The Bitcoin network was introduced in October 2008 as the first blockchain technology and, in reality, the first use of cryptocurrency. The launch of the Ethereum network in July 2015 marked the next step in the blockchain industry’s progress. The crucial smart contract functionality has now been added. The second generation of blockchain platforms has arrived, allowing users to embed business logic into smart contracts: at first, the most basic, but as the ecosystem grows and becomes more complicated, smart contracts become more complex. As a result of all of this, blockchain technologies are now widely used in a variety of businesses, including bitcoin gambling. We are witnessing the beginning of two technology revolutions at the same time in 2021. Decentralized financial services (DeFi) are a type of decentralized financial service. DeFi refers to infrastructure and apps that use distributed protocols to avoid traditional financial institutions such as banks and insurance firms. Decentralized exchanges, crypto-asset lending, prediction markets, synthetic asset, and derivative issuance protocols are all included in DeFi. In the area of securing property rights and transferring them using cryptographic non-fungible tokens (NFT). These tokens are arranged on the blockchain as a form of digital certificate that proves the copyright holder’s exclusive ownership of a specific property (painting, photograph, rare wine) or even an event and action. Such a token not only protects the author’s (or issuer’s) intellectual rights, but also makes the movement of this ‘digital certificate’ completely transparent, allowing a musician, for example, to profit from the circulation of his or her music, to which the NFT token is linked.
The speed problem is becoming a very big stage in the evolution of the blockchain, as it competes with traditional centralized IT structures. Decentralization, i.e., the lack of a single control center or storage site; reliability and impossibility of data substitution; transaction transparency; and the ability for anybody to access this information are all advantages that the blockchain has over them. Yet, as compared to centralized IT systems, blockchain has historically struggled to achieve appropriate scalability for a large number of users due to its performance and speed. Consumers are accustomed to fast data transfer rates. Nevertheless, since 2021, protocols such as Cardano and Polkadot, as well as wholly new Solana, NEAR, and TON / Free TON, have appeared, drastically reducing the blockchain’s lag in performance and speed. When decentralized applications use these protocols, consumers in most cases will not perceive the difference compared to applications based on centralized solutions and will not even know that they are using these protocols. As a result, they gain access to all of the blockchain’s advantages. It’s already obvious that decentralized solutions are eroding market share from their centralized counterparts. Of course, this is happening slowly, but it has the potential for exponential expansion. Many IT businesses, such as IBM, Amazon, Samsung, and Apple, have recognized this and have begun to actively incorporate this technology into their regular goods and solutions.
Another factor to examine is the role of change agents. Generations X and Y grew raised in a financial and banking system that was based on tradition. Yet, there is a new generation of millennials that are actively joining the market, have a digital mindset, and are concerned about digital hygiene at the same time. The monetization of personal data irritates these folks. The majority of them prefer decentralized systems and peer-to-peer solutions, and they are already early adopters of goods that eliminate intermediaries and allow them to accomplish things as simply as possible without the need for a central or regulating authority. They will accelerate the adoption of decentralized solutions around the world. This is why anyone who wishes to stay on top of the rapidly changing technological landscape must keep this in mind. As a result, crypto-economics based on blockchain technology has established a new framework for economic agent interaction. The contribution of crypto protocols to the decentralized business model is currently inaccessible to the great majority of traditional economists.