Hello, everyone. Welcome back to the course. Up till now we have seen how blockchain is working wonders in the market. We have also discussed how blockchain works, and saw some of the major use cases related to the blockchain. Now, let's go and see what does the future hold for blockchain market and discuss new technologies that can challenge the blockchain. as said by Bill Hybels, a famous pastor from North America, vision is a picture of future that produces passion.
We need to analyze the vision we need to achieve with blockchain and the current usage of blockchain. Only then we will be able to see and direct the growth of blockchain. The passion for the blockchain projects is continuously increasing. Now let's see some of the current researches related to blockchain and analyze how these researchers are making sure that the blockchain future is in the right direction. Let's first talk about the current research related to the blockchain 3.0. The Birth of blockchain was termed as blockchain 1.0.
This was the era when the Bitcoin introduced us to blockchain back in 2009. This was followed by smart contracts, which opened up a whole new market for the creation of separate rules and regulations between multiple parties, apart from the blockchain, this was termed as blockchain 2.0. Currently, the third generation of blockchain is rising in the form of new types of technology ecosystem, such as hash graphs, and directed a cyclic graphs. These new developments are termed as blockchain 3.0, which are here to capitalize on the limitations of blockchain by providing much more scalable, efficient and high performance based projects. blockchain currently has a trilemma between scalability security and decentralization, we can choose two out of the three for our projects. We can either provide decentralized nature and scalability, or decentralized and security, or scalability and security.
Current research is focused on the provision of all the three features for the future solutions. The current research has led to the development of many scalable solutions. It has also given us the probable implementations of the projects, which state that not all participants are required to store all the information. A group of participants or nodes can maintain their state and provide a finality over the main chain. Some of the examples of current research are Bitcoin lightning network. The Bitcoin lightning network provides another layer over the Bitcoin blockchain.
This enables users to create payment channels between two parties on that external Live, this payment channel can exist as long as required and they are set up between two people, transactions will be almost instantaneously and the finality of the transactions will be stored over the blockchain. The fees over the Bitcoin lightning network is extremely low or even non existence as we are creating a solution which is cost effective, and lightning fast. The other significant research happening is in the Ethereum network. aetherium sharding dictates that the entire state of the network can be split into a bunch of partitions, also known as shards. Each shard can contain their independent piece of state and transaction history. nodes can join these shards and the transactions can be made in such a way that they are pertaining to a certain shard.
Certain nodes would process transactions only for the specific shards This will allow a very high throughput for transactions over the Ethereum projects. Many more different kinds of synchronization capabilities are also coming in with a theorem blockchain offering full, fast and light synchronization processes. In these processes, we don't need to get all the data for the blocks, we can take up the headers of the block, and then after synchronization, continue as a full blockchain. All this research put into the blockchain technology is trying to make blockchain more secure, and scalable. This research has also led to the development of Furthermore, projects, which are not entirely blockchain. One of the projects, which are providing high performance and security is known as directed acyclic graph.
In dHg, project transactions are directly linked to other transactions without putting them into the blocks first DHT More like a mesh network which follows a horizontal scheme, as compared to the blockchains vertical scheme. Big network is also known as tangle. Big doesn't support blocks and miners. That's why we don't need to wait for the confirmation of the blocks. And this makes the process much faster. DHG does have some properties similar to the blockchain.
It's a distributed database present over a peer to peer network. unconfirmed new transactions inside the ag must confirm one or two additional transactions before that transaction can be processed and get confirmed. In a way the network is dictating that a person who wants to make a transaction first needs to confirm two or more transactions before putting his or her transaction over the network. Markov chain Monte Carlo rules ensure that the network participants do not confirm their time. sections. a basic overview of D ag can be visualized through the diagram.
As you can see, we have nodes A, B, C, D, E, F and G. These nodes are forming a mesh network, every node is putting up a transaction which is linked to the other transaction. There is no requirement of the blocks. Moreover, nodes are confirming these transactions before they start their own transactions. This process also creates a link for the complete network using which we can have traceability. A node is a startup node or as we say in the terms of the blockchain or Genesis block which is initiating everything. Another research over the blockchain technology has also led to the creation of one more distributed ledger technology known as hash graph.
This is an exciting Project which offers top notch availability, scalability, and security together for solutions. Hash graph also belongs to the category of the distributed ledger technology that brings in the concepts of events where events are hash to each other. The consensus library between 6000 banks started hash graph. The current version of the hash graph is known as Hydra platform, which aims to drive forward public adoption of hash graph platforms. The leadership console of the hash graph consists of almost 39 members. Instead of blocks in blockchain, we have events in hash graph, which consists of timestamp to different parent hashes and transactions.
Hash graph uses gossip protocol to communicate between two computers. Hash graph also utilizes gossip about gossip consensus, which means every participant shouldn't All the transaction history inside the hash graph. As you can see in the diagram, the hash graph is following a similar approach, where the circles are represented as events over the hash graph. These events have to parent hash, which means they are linked to at least two different parents events inside the network. The events also consist of transactions, timestamp, and other metadata. It forms a similar approach as blockchain, where you can follow a path to track all the events, but the events are interlinked, thus creating multiple ways to reach the results.
The hash graph is a fascinating project. The current research states that the transaction throughput on hash graphs can go up to 200,000 transactions per second, which is four times the transaction throughput for visa hash graph. is continuously being researched. And when the project stabilizes to be available for mass adoption, then this might even replace the Visa and MasterCard services. Now let's understand some of the differences between the blockchain DHG and hash graphs. blockchain and DHCP.
Copyrights are available as open source. Whereas hash graph is a patented technology by the councilmembers. blockchain started with the proof of work algorithm. DHT follows a similar approach, but uses a tangled tape consensus. This consensus mechanism states that in order to know the confirmation confidence for a particular transaction, or tip selection algorithm needs to run under the DAP network. For example, we run the algorithm hundred times to select hundred tips.
We then measure how many of the hundred chosen tips refer to the transaction in question. For example, If it is referenced by 60 tips out of hundred, we say it is 60% confirmed. The consensus followed by the hash graph is related to gossip about gossip, where everyone provides virtual voting over the events happening throughout the network. blockchains and DHT are open to all, as public Ledger's, but hash graph only supports private Ledger's research is still being carried out to form a hash graph public ledger, which can be adopted throughout the world. The applications of hash graph and dgx are relatively new. The application of blockchain is the pioneer of the distributed ledger technology, known as Bitcoin.
Iota is one of the examples using the directed acyclic graph. And swirls is using the hash graph technology. The transaction throughput offered by blockchain is about three to four transactions per second whereas directed acyclic graphs can take up the transaction throughput, up to 800 transactions per second. The hash graph is offering transaction throughput of about 250 thousand transactions per second. In this lecture we discussed about the current research, which is also providing a sneak peek into the future of blockchain and distributed technology. You can see that there are many different and exciting projects coming up and all these projects aim to solve the limitations related to the blockchain.
Moreover, the current blockchain technologies are also coming up with advanced layers, which can reduce the restrictions over the present technology. In the next lecture, we are going to discuss over the future research and technology collaborations with the blockchain. If you have any queries feel free to contact us at info at the rate p two blocks.com