When tracing the development of the blockchain market, several major innovations have marked its progression. One needs to only focus on the main challenges that have been overcome in the last 10 years to see just how far the field has come.
Major issues around scalability and cross-chain compatibility are now fragments of the past, largely due to leading cryptocurrency companies that have encountered and proliferated solutions. Although this industry has come a long way, there is still lots of ground to cover.
In this article, we’ll dive into some of the companies that have changed the course of the sector, demonstrating how their advancements and innovations have paved the way for other companies in their wake. Equally, we’ll comment on the central offering of these companies to explain how each has contributed to the field and helped to create a more comprehensive blockchain ecosystem.
Let’s dive right in.
It All Starts with Infrastructure
The first two major blockades on the road to the expansion of the blockchain industry were the scalability and interoperability problems. With the adoption of layer one ecosystem with higher transaction per second potentials and the movement to proof of stake and other more modern consensus mechanisms, this first problem rapidly became a thing of the past.
However, the interoperability problem lasted longer in the overall development of blockchain. With so many leading ecosystems in the space, leading companies were still investing the majority of their capital into expanding their own offerings instead of looking for innovative and connective solutions.
While the past few years have seen a sudden spike in the number of interoperable projects, the need for interoperable infrastructure has still remained a central concern of many involved parties. After all, without the ability to connect these innovative systems, businesses cannot leverage their value offering in any other context but a highly individualistic one.
One company that has sought to change this approach completely has been Orbs. Orbs, founded back in 2017, was first launched as an open and permissionless public blockchain infrastructure. However, back in 2021, they launched their Layer 3 multi-chain, which works in parallel with all of the leading L1 and L2 chains, like Ethereum, Solaana, BSC, and Avalanche.
Utilizing a PoS consensus mechanism, the Orbs project sits on top of Layer 2 ecosystems to offer specific applications focused on DeFi integrations. This offers a highly customizable approach to blockchain infrastructure that enables DeFi projects and their underlying chains to come together.
With this invention and release, Orbs simultaneously targeted the scalability issues of Ethereum and the interoperability problems of leading chains. Their enhanced execution allows developers to create highly complex applications and platforms fully supported by smart contracts that can connect with various underlying infrastructural models.
This launch is now one of the driving factors of rapid development in the space, with Orbs cementing itself into the conscious memory of blockchain’s expansion.
The Rapid Expansion of the DeFi Sub-Sector
While the underlying infrastructure of blockchain supports the rest of the system and provides opportunities for development, it doesn’t itself have enough positive characteristics to pull new users to this sphere. The vast majority of users that enter this world do so through two core pathways.
The first of these is as an investor. Those who invest in cryptocurrency typically do so to obtain a future profit or diversify their portfolios. However, a second group of users engage with the world of blockchain through DeFi (Decentralized Finance) applications. DeFi apps could involve anything from decentralized exchanges to DeFi gaming networks.
To increase the potential of new users onboarding into the blockchain, ecosystems like Ethereum have focused on building up their development capabilities over the past five years. Ethereum now offers an extensive portfolio of developer tools that facilitate easy development for new DeFi apps and platforms.
Equally, their movement toward more scalable blockchain practices has further allowed them to reduce the average gas fee of transactions, and make it more feasible for developers to create on their platform. These developers have paid off dividends, with 100s of DeFi applications using Ethereum to grow their own internal ecosystems.
This definitive business goal and direction has enabled the rapid growth of this industry, helping to dynamically accelerate widespread blockchain adoption.
Improving Opportunities for Crypto Mining
While many blockchain systems have begun to move to a proof-of-stake consensus mechanism, the prevalence of Bitcoin as a proof-of-work system means that mining isn’t going away anytime soon. A PoW consensus mechanism uses computing resources to solve increasingly complex mathematical equations. The device or server that solves this equation and facilitates the production of the next block receives a reward.
Since the earliest days of cryptocurrency, bitcoin mining has been a popular activity. However, with the high profit potential of this activity, it quickly became industrialized, making it nearly impossible for a home miner without phenomenal computational resources to get involved in the industry.
One company set out to reverse this change, hoping to allow absolutely anyone to get involved with the mining process that allowed leading PoW systems to run. Spacemesh offered a new consensus protocol system that is fully permissionless and directly accommodated for new miners.
Spacemesh substitutes CPU work resources with spacetime – a measurement of disk storage over time, which provides a level playing field for all potential miners. Instead of a few select monopolies being able to take the majority of the rewards, this is a much fairer approach to cryptocurrency mining.
Considering just how important the process of crypto mining is for the entire ecosystem, presenting a novel and fair way of engaging in mining is a notable advance that cannot be overlooked. Spacemesh’s PoST protocol is a sustainable, energy-efficient approach that has planned its utility in crypto far into the future.
Final Thoughts
While the advances on this list are only a small fragment of the total evolution that the blockchain sector has experienced, they represent the common factor of one or two core companies providing an easier or more effective way of bringing about change. Whether it’s an innovation to the underlying infrastructure of blockchain or a new way of conducting consensus mechanisms, these moments of progress mark the history of the sector.
With all eyes on the blockchain industry, as we move closer to 2024, we have no doubt that further innovations are just on the horizon.