Blockchains, as we all know them right now, have 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 forex. Nevertheless, it rapidly grew to become evident that this know-how’s potential prolonged far past finance.
The consensus is that over 1000 blockchains are in energetic operation globally right now. These networks are tailor-made to unravel issues in virtually each vocation recognized to man—from provide chains to voting methods and even digital artwork; the tech’s functions are as diverse as they’re promising.
The speed at which blockchains are being created is pretty steady. Up to now, in 2024, we’ve got only one fashionable new blockchain: Consensys’s Linea. There are undoubtedly many builders already ideating and constructing new blockchains for various legit 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 forex software in 2014, and the appearance 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 applications that execute duties with out intermediaries. This innovation unlocked new alternatives, notably in decentralized finance (DeFi) which Bitcoin launched however was restricted and unable to totally energy.
Following Ethereum’s success, different blockchains equivalent to Solana, Polkadot, Avalanche, and Cardano entered the scene, every addressing particular challenges like scalability, velocity, or power effectivity. Nevertheless, even these superior platforms stay removed from realizing their full potential.
Ethereum, as an 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—equivalent to Solana’s high-speed structure or Avalanche’s subnet performance—are additionally dealing with challenges. Adoption charges are inconsistent, and lots of dApps wrestle to achieve traction exterior area of interest markets.
Nevertheless, one would possibly argue that these blockchains will not be notably 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 could 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 gradual. Whereas the know-how’s potential is obvious—bettering transparency, decreasing fraud, and streamlining processes—its software stays restricted. That is largely as a result of blockchain know-how is forward of its time in lots of respects, with infrastructure improvement outpacing market demand and real-world use instances.
In essence, the difficulty isn’t actually a scarcity of blockchain platforms however fairly 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 method to share information or entry world web sites. That’s basically the state of blockchain right now. Builders constructing cross-chain functions should navigate technical complexities, equivalent to differing consensus mechanisms, programming languages, and safety protocols. This will increase prices, slows innovation, and hinders consumer adoption.
Efforts to unravel this situation are underway. Tasks like Polkadot and Cosmos are main the cost with interoperability options. Polkadot’s Relay Chain permits completely different blockchains to alternate 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 very 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 might enhance effectivity and quicker innovation. Simplifying the blockchain ecosystem would cut back the complexities concerned in creating cross-chain functions, permitting builders to concentrate on creating extra modern options fairly than coping with integration points. Because the blockchain business matures, the demand for efficient interoperability options will probably 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 we’ve got mentioned above. For instance, Ethereum has made vital progress with Layer 2 options like Optimism, Arbitrum, and zk-rollups. These applied sciences course of transactions off-chain, decreasing 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 velocity. 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 strategy reduces the necessity for brand new blockchains, permitting builders to concentrate on constructing strong functions fairly 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 fairly than grappling with the complexities of integrating a number of blockchains. This unified strategy may also enhance consumer experiences, making blockchain know-how 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 usually drives the event of recent networks, notably 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 liable to errors and inefficiencies, however Fr8’s blockchain-based strategy ensures all events have real-time entry to correct data, decreasing disputes and bettering effectivity.
Equally, World (previously Worldcoin) is tackling the problem of digital id. By leveraging blockchain, the challenge goals to create a sovereign digital id system that’s safe, verifiable, and accessible to all. This addresses a crucial want in right now’s digital panorama, the place id fraud and information breaches are rampant.
READ MORE: Classes in Privateness from the Controversial Worldcoin Undertaking
In some instances, innovation requires rethinking elementary blockchain rules. Solana and Cardano, as an example, launched new consensus mechanisms and architectural designs to handle Ethereum’s scalability points. These blockchains didn’t merely replicate Ethereum—they reimagined it.
Whereas new blockchains can carry groundbreaking options, they need to serve a transparent goal, addressing unmet wants or advancing the know-how in methods present networks can not.
Putting 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 gives a path to effectivity. By decreasing 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 potentialities. 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 guaranteeing interoperability and collaboration.
One promising strategy is the event of common protocols and requirements. Simply because the web depends on customary protocols like HTTP and TCP/IP, blockchain may benefit from shared frameworks that allow seamless interplay between networks. These requirements would cut 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 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 means of consolidation or continued experimentation, the final 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 of 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 danger of economic loss. At all times conduct due diligence.
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