Blockchains, as we all know them right this moment, had been first constructed and launched for public use in 2008 when Satoshi Nakamoto launched the Bitcoin community to energy their revolutionary concept of a digital foreign money. Nevertheless, it shortly grew to become evident that this expertise’s potential prolonged far past finance.
The consensus is that over 1000 blockchains are in lively operation globally right this moment. These networks are tailor-made to unravel issues in nearly each vocation recognized to man—from provide chains to voting methods and even digital artwork; the tech’s functions are as various as they’re promising.
The speed at which blockchains are being created is pretty secure. To this point, in 2024, we’ve got only one fashionable new blockchain: Consensys’s Linea. There are positively many builders already ideating and constructing new blockchains for various reliable causes, however presently, we have to ask ourselves: do we actually want extra blockchains?
Untapped potential in present blockchains
Blockchain tech was totally divested from its digital foreign money software in 2014, and the arrival of what’s also known as Blockchain 2.0. This period noticed the emergence of platforms like Ethereum, which prolonged blockchain’s capabilities past easy transactions. It launched in 2015 and was the primary platform to construct on Bitcoin’s foundational success by introducing good contracts—automated packages that execute duties with out intermediaries. This innovation unlocked new alternatives, significantly in decentralized finance (DeFi) which Bitcoin launched however was restricted and unable to completely energy.
Following Ethereum’s success, different blockchains resembling Solana, Polkadot, Avalanche, and Cardano entered the scene, every addressing particular challenges like scalability, pace, or vitality effectivity. Nevertheless, even these superior platforms stay removed from realizing their full potential.
Ethereum, for example, has develop into the spine of DeFi and NFTs, but it struggles with scalability. Excessive transaction charges and community congestion proceed to plague the platform, regardless of ongoing upgrades like “The Merge” and plans for sharding.
Equally, newer blockchains designed to unravel Ethereum’s limitations—resembling Solana’s high-speed structure or Avalanche’s subnet performance—are additionally going through challenges. Adoption charges are inconsistent, and lots of dApps wrestle to realize traction outdoors area of interest markets.
Nevertheless, one would possibly argue that these blockchains will not be significantly underutilized however that the market has not totally embraced the necessity for such scalable options. Blockchain adoption continues to be in its early phases throughout many industries, and the demand for such networks might not justify their full-scale use simply but.
Even past finance, blockchain adoption in industries like provide chain administration, healthcare, and digital id has been sluggish. Whereas the expertise’s potential is evident—enhancing transparency, lowering fraud, and streamlining processes—its software stays restricted. That is largely as a result of blockchain expertise is forward of its time in lots of respects, with infrastructure improvement outpacing market demand and real-world use instances.
In essence, the problem isn’t actually a scarcity of blockchain platforms however relatively a scarcity of widespread adoption and full utilization of present ones.
The issue of fragmentation
Over 1000 blockchains, of which most of that are primarily based within the monetary sector, additionally undergo one other drawback: interoperability. Most blockchains function in silos, unable to speak seamlessly with each other. This lack of interoperability limits their utility and stifles the event of functions that would work throughout a number of chains.
Think about a world the place every nation’s web operated independently, with no solution to share information or entry world web sites. That’s primarily the state of blockchain right this moment. Builders constructing cross-chain functions should navigate technical complexities, resembling differing consensus mechanisms, programming languages, and safety protocols. This will increase prices, slows innovation, and hinders person adoption.
Efforts to unravel this situation are underway. Initiatives like Polkadot and Cosmos are main the cost with interoperability options. Polkadot’s Relay Chain permits totally different blockchains to change information, whereas Cosmos’s Inter-Blockchain Communication (IBC) protocol facilitates seamless interplay between chains. Chainlink, one other key participant, ensures safe communication between blockchains and exterior information sources, which is especially important for DeFi functions. Nevertheless, these options will not be but universally adopted, and fragmentation stays a barrier to blockchain’s widespread acceptance.
Making a case for fewer blockchains would relaxation on the argument that consolidating networks may improve effectivity and quicker innovation. Simplifying the blockchain ecosystem would scale back the complexities concerned in creating cross-chain functions, permitting builders to concentrate on creating extra modern options relatively than coping with integration points. Because the blockchain business matures, the demand for efficient interoperability options will possible drive consolidation and the adoption of common requirements.
Scaling present blockchains
That is one other facet of the dialogue. There are such a lot of options out centered on enhancing the blockchains we have already got and fixing the issues we’ve got mentioned above. For instance, Ethereum has made important progress with Layer 2 options like Optimism, Arbitrum, and zk-rollups. These applied sciences course of transactions off-chain, lowering congestion and reducing charges whereas sustaining the safety of the Ethereum mainnet.
Different blockchains are additionally innovating. Avalanche launched subnets, permitting builders to create customized blockchain networks inside its ecosystem. These subnets can function independently whereas nonetheless benefiting from Avalanche’s safety and pace. Solana, recognized for its excessive throughput, continues to refine its proof-of-history consensus mechanism to enhance scalability.
Interoperability-focused tasks like Polkadot and Cosmos additional improve the utility of present blockchains by enabling them to share sources and information seamlessly. This interconnected method reduces the necessity for brand spanking new blockchains, permitting builders to concentrate on constructing sturdy functions relatively than reinventing the wheel.
Scaling options not solely optimize blockchain efficiency but additionally create a extra cohesive ecosystem. Builders can concentrate on constructing modern functions relatively than grappling with the complexities of integrating a number of blockchains. This unified method can even enhance person experiences, making blockchain expertise extra accessible and sensible.
So, when is a brand new blockchain justified?
Regardless of some great benefits of enhancing present blockchains, there are conditions the place creating a brand new blockchain is justified. Innovation usually drives the event of recent networks, significantly when present infrastructure fails to fulfill particular wants.
Take the logistics sector for instance. Fr8, a blockchain-powered freight firm, has revolutionized provide chain administration through the use of good contracts to extend transparency and accountability. Conventional logistics methods are vulnerable to errors and inefficiencies, however Fr8’s blockchain-based method ensures all events have real-time entry to correct data, lowering disputes and enhancing effectivity.
Equally, World (previously Worldcoin) is tackling the problem of digital id. By leveraging blockchain, the undertaking goals to create a sovereign digital id system that’s safe, verifiable, and accessible to all. This addresses a vital want in right this moment’s digital panorama, the place id fraud and information breaches are rampant.
READ MORE: Classes in Privateness from the Controversial Worldcoin Challenge
In some instances, innovation requires rethinking elementary blockchain ideas. Solana and Cardano, for example, launched new consensus mechanisms and architectural designs to deal with Ethereum’s scalability points. These blockchains didn’t merely replicate Ethereum—they reimagined it.
Whereas new blockchains can deliver groundbreaking options, they need to serve a transparent goal, addressing unmet wants or advancing the expertise in methods present networks can’t.
Placing a stability between innovation and effectivity
The blockchain ecosystem is at a crossroads the place the pursuit of innovation should be balanced with the necessity for effectivity. On one hand, experimentation has pushed the business’s speedy evolution, giving rise to transformative improvements like DeFi, NFTs, and Layer 2 scaling options. Alternatively, the rising variety of blockchains has created inefficiencies and complexities that hinder widespread adoption.
Consolidation affords a path to effectivity. By lowering fragmentation and selling interoperability, the blockchain ecosystem may ship extra constant and user-friendly experiences.
On the similar time, continued experimentation stays important for uncovering new prospects. With out it, the business dangers stagnation, lacking alternatives to redefine sectors like finance, governance, and healthcare. The problem lies in hanging a stability: fostering creativity whereas making certain interoperability and collaboration.
One promising method is the event of common protocols and requirements. Simply because the web depends on normal protocols like HTTP and TCP/IP, blockchain may gain advantage from shared frameworks that allow seamless interplay between networks. These requirements would scale back fragmentation, enhance scalability, and create a extra cohesive ecosystem.
Closing ideas
Do we want extra blockchains? The reply lies within the goal they serve. Whereas new blockchains can drive innovation and tackle distinctive challenges, the present focus needs to be on scaling present networks and enhancing interoperability.
The blockchain business should prioritize collaboration, constructing an ecosystem the place applied sciences work collectively to maximise their collective potential. Whether or not by consolidation or continued experimentation, the last word purpose is evident: to unlock blockchain’s transformative capabilities and make them accessible to all.
Disclaimer: This text is meant solely for informational functions and shouldn’t be thought of buying and selling or funding recommendation. Nothing herein needs to be construed as monetary, authorized, or tax recommendation. Buying and selling or investing in cryptocurrencies carries a substantial danger of economic loss. All the time conduct due diligence.
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