Blockchain Evolution and Cosmos Ecosystem.
What is Blockchain?
Blockchain at its foundation is a chain of blocks. Its context goes beyond the traditional meaning of these words. Words “block” and “chain” are actually digital information (the “block”) stored in a public database (the “chain”). In a nuanced manner, the blockchain becomes an incorruptible digital ledger. Whereby, it not only can be programmed to record transactions but virtually everything of value in a decentralized fashion.
(Abstract representation of chain of blocks comprising of transactions)
Decentralization
Decentralization broadly refers to the dissemination of powers by top management to the middle or low-level management. In computing terms, a decentralized network architecture distributes workloads among several machines, instead of relying on a single central server.
Benefits of Decentralization:
- There is less likely to be a single point of failure.
- Users will not have to put much trust in a central authority.
- There is less censorship, hence fosters an open culture and security.
- Decentralized networks are more likely to be open to development platforms.
- There is a powerful potential for network ownership alignment.
- Decentralized networks have a huge potential to be more meritocratic.
BLOCKCHAIN 1.0
- Bitcoin: Peer-to-Peer digital Currency.
- Uses Proof-of-Work (POW).
- First decentralized application on a blockchain.
Limitations:
- The CodeBase was Monolithic, all three layers — networking, consensus, and application were mixed together.
- Bitcoin scripting language was limited and not user-friendly.
BLOCKCHAIN 2.0 (the Ethereum story)
- Ethereum: a global, decentralized platform for money and new kinds of applications
- Single blockchain where people will be able to deploy any kind of program.
- Ethereum achieved this by turning the Application layer into a virtual machine called the Ethereum Virtual Machine (EVM).
- This virtual machine was able to process programs called smart contracts that any developer could deploy to the Ethereum blockchain in a permissionless fashion that allowed thousands of developers to start building decentralized applications (dApps).
Limitations:
- Scalability
- Shared rate of 15 transactions per second (compared to Visa’s ~24,000 TPS) due to the fact that Ethereum still uses Proof-of-Work.
- dApps compete for the limited resources of a single Blockchain.
2. Usability
- Relatively low flexibility granted to developers.
- Developers have to make compromises on the design and efficiency of their application.
- Limited to a few programming languages and cannot implement automatic execution of code.
3. Sovereignty
- Each application is limited in sovereignty because they all share the same underlying environment.
- Creates two layers of governance: that of the application, and the underlying environment. While the former is limited by the latter.
However, these limitations are not specific to Ethereum but to all blockchains that attempt to create a single platform fitting all use cases.
BLOCKCHAIN 3.0
Cosmos: Ecosystem of connected blockchains.
The vision of Cosmos is to make it easy for developers to build blockchains and to break the barriers between blockchains by allowing them to transact with each other. The end goal is to create an Internet of Blockchains, a network of blockchains that are able to communicate with each other in a decentralized fashion.
With Cosmos, blockchains can maintain sovereignty, process transactions quickly and communicate with other blockchains in an ecosystem, thereby making it optimal for a variety of use cases.
( Architecture of Cosmos )
This vision is achieved through a set of open-source tools like Tendermint, the Cosmos SDK and IBC. These are designed to let people build secure, scalable and interoperable blockchain applications.
Tendermint BFT
Tendermint BFT is a solution that packages the networking and consensus layers of a blockchain into a generic engine, allowing developers to focus on application development as opposed to the complex underlying protocol. The Tendermint BFT engine is connected to the application by a socket protocol called the Application Blockchain Interface (ABCI).
Tendermint BFT reduces the development time of a blockchain from years to weeks, but building a secure ABCI-app from scratch remains a difficult task. This is why the Cosmos SDK exists and holds special importance in such a context.
Cosmos SDK
The Cosmos SDK is a generalized framework that simplifies the process of building secure blockchain applications on top of Tendermint BFT.
Connecting Blockchains Together — IBC
Connecting blockchains is at the heart of interoperability. The connection between blockchains is achieved through the Inter-Blockchain Communication protocol (IBC).
THE FUTURE
There are endless prognostications that can be made with regard to the scope of Blockchain development. Blockchain remains famous and noteworthy for its role in facilitating the rise of digital currencies over the past several years. However, there are many other non-cryptocurrency uses for this technology. Some of the remarkable and popular use cases are likely to bring blockchain further into the world of mainstream business and finance. Where it offers future of perfectibility with regards to:
- Cross-Border Payments
- Smart Contracts
- Identity Management
- World Trade on a Blockchain
