Blockchains, as we all know them in the present day, have been first constructed and launched for public use in 2008 when Satoshi Nakamoto launched the Bitcoin community to energy their revolutionary thought of a digital foreign money. Nonetheless, 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 in the present day. These networks are tailor-made to resolve issues in virtually each vocation identified to man—from provide chains to voting programs and even digital artwork; the tech’s functions are as assorted as they’re promising.
The speed at which blockchains are being created is pretty secure. To date, in 2024, now we have only one common new blockchain: Consensys’s Linea. There are positively many builders already ideating and constructing new blockchains for various official causes, however at the moment, 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 utility in 2014, and the appearance of what’s sometimes called 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 sensible 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 totally energy.
Following Ethereum’s success, different blockchains comparable to Solana, Polkadot, Avalanche, and Cardano entered the scene, every addressing particular challenges like scalability, pace, or vitality effectivity. Nonetheless, even these superior platforms stay removed from realizing their full potential.
Ethereum, as an illustration, has turn out to be 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 resolve Ethereum’s limitations—comparable to 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 achieve traction outdoors area of interest markets.
Nonetheless, one may 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 levels throughout many industries, and the demand for such networks could not justify their full-scale use simply but.
Even past finance, blockchain adoption in industries like provide chain administration, healthcare, and digital identification has been gradual. Whereas the expertise’s potential is obvious—bettering transparency, lowering fraud, and streamlining processes—its utility stays restricted. That is largely as a result of blockchain expertise is forward of its time in lots of respects, with infrastructure growth outpacing market demand and real-world use circumstances.
In essence, the difficulty isn’t actually an absence of blockchain platforms however quite an absence 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 might work throughout a number of chains.
Think about a world the place every nation’s web operated independently, with no solution to share knowledge or entry world web sites. That’s primarily the state of blockchain in the present day. Builders constructing cross-chain functions should navigate technical complexities, comparable to differing consensus mechanisms, programming languages, and safety protocols. This will increase prices, slows innovation, and hinders person adoption.
Efforts to resolve this problem are underway. Initiatives like Polkadot and Cosmos are main the cost with interoperability options. Polkadot’s Relay Chain permits totally different blockchains to trade knowledge, 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 knowledge sources, which is especially very important for DeFi functions. Nonetheless, 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 might enhance effectivity and quicker innovation. Simplifying the blockchain ecosystem would scale back the complexities concerned in creating cross-chain functions, permitting builders to deal with creating extra modern options quite 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 bettering the blockchains we have already got and fixing the issues now we have 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, identified for its excessive throughput, continues to refine its proof-of-history consensus mechanism to enhance scalability.
Interoperability-focused initiatives like Polkadot and Cosmos additional improve the utility of present blockchains by enabling them to share assets and knowledge seamlessly. This interconnected strategy reduces the necessity for brand new blockchains, permitting builders to deal with constructing sturdy functions quite than reinventing the wheel.
Scaling options not solely optimize blockchain efficiency but additionally create a extra cohesive ecosystem. Builders can deal with constructing modern functions quite than grappling with the complexities of integrating a number of blockchains. This unified strategy may enhance person experiences, making blockchain expertise extra accessible and sensible.
So, when is a brand new blockchain justified?
Regardless of some great benefits of bettering present blockchains, there are conditions the place creating a brand new blockchain is justified. Innovation typically drives the event of recent networks, significantly when present infrastructure fails to satisfy particular wants.
Take the logistics sector for example. Fr8, a blockchain-powered freight firm, has revolutionized provide chain administration by utilizing sensible contracts to extend transparency and accountability. Conventional logistics programs are susceptible to errors and inefficiencies, however Fr8’s blockchain-based strategy ensures all events have real-time entry to correct data, lowering disputes and bettering effectivity.
Equally, World (previously Worldcoin) is tackling the problem of digital identification. By leveraging blockchain, the undertaking goals to create a sovereign digital identification system that’s safe, verifiable, and accessible to all. This addresses a important want in in the present day’s digital panorama, the place identification fraud and knowledge breaches are rampant.
READ MORE: Classes in Privateness from the Controversial Worldcoin Venture
In some circumstances, innovation requires rethinking elementary blockchain ideas. Solana and Cardano, as an illustration, 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 convey groundbreaking options, they need to serve a transparent objective, addressing unmet wants or advancing the expertise in methods present networks can not.
Hanging a steadiness 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 provides a path to effectivity. By lowering fragmentation and selling interoperability, the blockchain ecosystem might ship extra constant and user-friendly experiences.
On the identical 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 putting a steadiness: fostering creativity whereas making certain interoperability and collaboration.
One promising strategy 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.
Last ideas
Do we’d like extra blockchains? The reply lies within the objective they serve. Whereas new blockchains can drive innovation and handle distinctive challenges, the present focus must be on scaling present networks and bettering 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 way of consolidation or continued experimentation, the last word objective is obvious: 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-about buying and selling or funding recommendation. Nothing herein must be construed as monetary, authorized, or tax recommendation. Buying and selling or investing in cryptocurrencies carries a substantial threat of economic loss. All the time conduct due diligence.
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