What’s the Potential for 3 rd Generation Blockchains?By SIRIN LABS Sep 28, 2018
How blockchain technology is evolving for the future
Over the last year, cryptocurrency and blockchain have established themselves on the global stage but have fallen short of achieving mass adoption. What’s worse is that due to the complex nature of crypto, when the interest from the general public is piqued, they can’t act on it due to lack of resources.
In order to address these issues, we must first understand a brief history of blockchain technology. In short (and incredibly abbreviated), Bitcoin, the 1st generation of blockchain, gave way to Ethereum, the 2nd generation of blockchain, which in turn has paved the way for a variety of 3rd generation blockchains who are all attempting to make cryptocurrency viable on a global scale.
In order to assess the 3rd generation blockchain’s ability to compete on a global stage, it’s also essential that we understand how cryptocurrency blockchains have evolved and evaluate whether or not the current payment processing leaders are evolving in turn.
In order to assess the ability for 3rd generation blockchains to overtake the current transactions status-quo, we need to establish a standard benchmark. For this, we will compare crypto to a credit card company, focusing on security.
Cryptocurrency, being a digital currency that is individually controlled, necessarily requires more security than credit cards. From the customer’s perspective, it is fairly simple. If the customer reports fraud, the credit card company will investigate, and generally will refund the amount as a credit to the account.
But is it that simple? Keep in mind that most of those charges result in losses for the company. In 2018, the loss to the credit card industry is projected to be nearly 10 billion dollars. Those are costs that are eventually passed onto the customer in one way or another.
So while cryptocurrency might involve a greater risk, in theory, in practice there are lots of different and simple ways to secure crypto safely for extended periods of time. Because of the inherent desire to secure cryptocurrency, the crypto community is constantly evolving and learning new ways to keep their currencies safer and safer.
The credit card industry has a vested interest in improving their security, but the data reflects their inability to have any substantive impact on the fraud in their own backyard.
What’s the Future?
There’s no way to tell the future, but all indications are that cryptocurrency and blockchain technologies are quickly evolving to meet the needs of consumers better than their counterparts in the credit card industry.
While credit cards may never go away entirely, their potential loss from crypto is substantial. If the majority of transactions move into the cryptosphere, it will force the credit card companies to evolve or die.
The forced evolution of credit cards and cryptocurrencies are a win/win for customers and consumers, because both scenarios have the ability to bring down costs for merchants, and by extension, for us.
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