What is Shift Three in the crypto space and who are the main players.
Blockchain technology and cryptocurrency are all in vogue these days. What was once discussed only among the inhabitants of the dark web and financial anarchists has now become a hot topic of discussion for billions of conglomerates.
Blockchain technology and cryptocurrency are all in vogue these days. What was once discussed only among the inhabitants of the dark web and financial anarchists has now become a hot topic of discussion for billions of conglomerates.
Over the past five years, cryptocurrencies have undergone a serious evolution, which is characterized by three specific paradigm changes. Let's go through these shifts one by one and see how they change the cryptographic space for better or for worse.
Fiat to Bitcoin.
The first shift was definitely the birth of Bitcoin. People still do not understand how important this event was. For years, people tried to create a digital currency that did not belong to any central organization. However, in order to achieve decentralization, the developers are forever trapped in the “double costs”. In fact, it was difficult for them to make each transaction unique.
An unknown programmer came under the pseudonym Satoshi Nakamoto. He published the information document “Bitcoin: electronic cash system. “Finally, we have a digital currency, which was really decentralized and solved the problem of double costs! Nakamoto achieved this using Blockchain technology. Blockchain technology has two truly amazing features (among many others):
- immutability
- transparency
Unchanged means that all data inside the blockchain is protected from hacking. Therefore, putting some data in the chain, you can not change them. You can imagine how desirable this property is for the payment system, as this will prevent any type of financial fraud.
Transparency basically means that anyone who is part of the Bitcoin network can look at Blockchain and see all past transactions. This property makes everyone responsible for their actions.
Bitcoin gave people a currency that they fully own. They can send it to anyone, without attracting the attention of the bank. Every person has their own bank. At the time of this writing, Bitcoin’s market capitalization was $ 111 billion.
Blockchain technology, which is the basis of Bitcoin, has become a subject of interest for many people. Soon they realized that the Blockchain technology has many more use cases than just a means of supplying a payment system. That was when the 19-year-old Canadian-Russian prodigy helped cryptospace evolve from Shift 1 to Shit 2.
Blockchain infrastructure cryptocurrency.
In 2013, Vitalik Buterin (the aforementioned child prodigy) published an official Ethereum document, in which the world passed from the Blockchain technology of the first generation (that is, Bitcoin) to the second generation. Although Ethereum can be used as a cryptocurrency, its greatest use is as a platform for intellectual contracts.
Smart contracts are self-expressing agreements between two parties. This gives users much more control and flexibility in their transactions than Bitcoin allows. Ethereum allowed developers to use its environment to execute smart contracts. Think of it as a global supercomputer that can hand over its computing power to developers around the world to create their own decentralized applications, such as dApps.
This property is directly responsible for the sudden growth of the ICO industry, which has attracted billions of dollars. The fact that the developers had an environment in which they could do their projects and collect millions of dollars in a crowdsale with relative ease led to the adoption passing through the roof.
Nevertheless, despite all their good qualities, the second generation blockchains have their own problems. Over time, cryptospace suffers from scalability and common interoperability problems.
To make it as concise and concise as possible, the lack of scalability means that as the number of users in the network increases, network performance deteriorates. For a blockchain-based platform to become truly mainstream, it is imperative that it solves this problem.
On the other hand, interoperability is the ability of a network to interact and interact with other networks. In the future, several dApp applications may be launched on multiple block chains. How can we be sure that they can freely communicate with each other without any weakness?
To solve these problems, we are developing a whole new generation of blockchains. These third-generation blockchains include projects such as Cardano and EOS, which use specialized consensus mechanisms to achieve higher transaction speeds and, consequently, higher scalability. They also worked a lot on improving compatibility. Although they promise quite a lot, we need to wait and see how their implementation will be successful in the future.
From machine blockchain to a layer of people
Marti "Sirius" Malmi is known in the crypto community as the only active developer who worked with the founder of bitcoins Satoshi Nakamoto. Along with some other projects, his “Identification” project is headed by “Shift 3.”. The idea behind this shift is to move from a purely blockchain-machine infrastructure to a social one.
So why do we need this shift?
One of the most fundamental components of a successful cryptocurrency is a strong community. Ethereum is a great example of this. However, most new cryptocurrencies simply do not support a good community. They mainly use messaging applications, such as Telegram, where participants are not interested in contributing anything of their own.
For this reason, participants do not invest much in projects, and they do not remain loyal and have a high propensity to talk about the value of the token instead of actually learning about the project and having a more realistic expectation.
That is why every time the market fluctuates and the token loses its value, users immediately leave the project. This is the main reason why some really incredible Blockchain projects have lost steam due to the loss of users. In fact, this is so bad that, according to a report by Deloitte Insights, published in November 2017, the failure rate of Blockchain projects reaches 92 percent, mainly due to "the lack of real application scenarios and the rapid loss of community members."
The idea behind this shift is to create a strong user growth scheme that is integrated into the blockchain itself. These projects use a reputation system in which every member of the community is interested in acting in the best interests of the project.
Think about how Uber works. Star ratings of drivers and passengers stimulate both participants to their best behavior.
Along with Malmi's Identifi, other projects that lead this shift are DREP from the creators of Google X and the U ° Community.
Last thoughts.
There you have three shifts that have determined and are going to determine the evolution of the crypto space.
So, are these all the phase shifts that we will have? In the end, cryptospace is constantly evolving, and we will invariably see more shifts. However, for the moment, let's focus on the data we have, rather than speculate. We hope you have gained tremendous value from this article.
