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Blockchain 3.0 - What is it and Why Does it Matter

Updated 2023-07-03 15:44:05

Blockchain technology has been a worldwide development since the Bitcoin was introduced in 2008. At first, technology was emphasized mainly on the creation of different cryptocurrencies. With the gradually growing technology, software developers and engineers began to discover the abilities of blockchain technology, and several innovative applications arose. Developers mostly find out for methods and procedures to flawlessly integrate blockchain technology throughout various applications and industries to maximize performance.


What is Blockchain 3.0?

Blockchain 3.0 is the generation where blockchain technology will be widely incorporated into our daily activities.

Blockchain 3.0 is the generation where blockchain technology will be widely incorporated into our daily activities. Blockchain 3.0 concentrates on developing solutions for businesses and sectors outside of economics. This final stage of the technology's advancement is devoted to expanding distributed ledger technology's application beyond its primarily financial applications and data management strategies. Of course, when more private parties begin to build specialized blockchain solutions for various industries, the adoption of this disruptive technology will occur gradually on a worldwide scale. However, we are already observing Blockchain 3.0's revolutionary potential. The introduction of cryptocurrencies was the first step on the road to widespread use; then came smart contracts and DApps, and now blockchain is replacing industry-specific improvements.


If we rewind back the Blockchain 3.0, Blockchain 1.0 first generation processed the introduction of cryptocurrencies, remarkably Bitcoin to humankind. It recognized the foundation and structure of decentralized transactions and presented the concept and procedure of a distributed ledger. Later, Ethereum led the blockchain 2.0, maximizing these abilities and resources with the help of smart contracts and decentralized applications (dApps). Now, with Blockchain 3.0, users will be able to observe new advancements and enhancements. In terms of usage, there are some industries and areas where blockchain 3.0 has already created a revolution.


Healthcare – Health is the most important sector for human beings. Blockchain 3.0 technology has the probability for the enhancement of managing and storing patient records or personal information. Moreover, this technology can maximize the communication among various healthcare facilities and enhance worldwide collaboration.


Transportation - The world with efficient transportation capability is necessary for the human nature. Transportation facilities and service providers can be greatly improved by the procedure of distributed ledger technology (DLT). Blockchain records data and information that can be efficiently applied for enhancing traceability and accountability for goods.


Voting - The voting system is one of the viral issues in every government. Blockchain technology makes voting more transparent by integrating public ledgers into the system. The voting procedure becomes more accessible and secure.


Why Blockchain 3.0 is better?

Why is Blockchain 3.0 better?

Blockchain 3.0 is the next evolution of blockchain technology, incrementing upon the previous models such as Blockchain 1.0 and Blockchain 2.0. However, there is no consistent meaning for Blockchain 3.0, it normally signifies developments and improvements over the previous versions. Here are a few statements on why Blockchain 3.0 is considered to be better than 1.0 and 2.0.



One of the major limitations and boundaries from previous versions was scalability. Blockchain 3.0 emphasizes creating solutions for this problem by implementing several scaling solutions such as sharding, side chains, and off-chain transactions. These systems allow for higher transaction processes and better network performance, permitting blockchain technology to be functional in a broader range of applications.



Blockchain 3.0 focuses on interoperability among different blockchain networks. It searches for building standards and protocols that allow seamless communication and data exchange between dissimilar blockchains. This interoperability creates chances for increased collaboration, cross-chain transactions, and the capability to leverage various blockchain ecosystems together.


Smart Contract Enhancements

Smart contracts which were introduced in Blockchain 2.0 are self-executing contracts with predefined regulations and statistics. Blockchain 3.0 will focus on better privacy and confidentiality such as scalability and security. It integrates developments like better programming languages, formal verification, and improved environments to create smart contracts more robustly and efficiently.


Privacy and Confidentiality

Meanwhile, the previous blockchain models provided pseudonymity, this new blockchain 3.0 will emphasize developing privacy and confidentiality. It presents privacy-preserving methods like zero-knowledge proofs, ring signatures, and secure multi-party computation to guard important data while keeping the integrity and transparency of blockchain technology.


Governance and Consensus Mechanisms

Blockchain 3.0 discovers other governance and consensus models to enhance decision-making processes and make sure that blockchain networks will have the ability to operate seamlessly. These models focus to make for solutions to problems like scalability, energy consumption, and decentralization while enabling for effective governance and decision-making among the network users.


The Problems of Blockchain 1.0

Understanding the main problems of blockchain 1.0

If we look back into Blockchain 1.0, Blockchain 1.0 is introduced by Bitcoin, created the basic structure for decentralized transactions, and presented the general concept of a distributed ledger. However, there are some problems and limitations of Blockchain 1.0. They are



One of the critical problems with Blockchain 1.0 is scalability. In the original Bitcoin blockchain, transaction processing capacity is limited. This can make the outcomes of slow transaction periods and high fees during periods of high network demand. General scalability challenges are the block size limitation and the consensus mechanism based on proof-of-work (PoW).


Energy Consumption

Blockchain 1.0 networks based on PoW consensus will consume a substantial amount of energy. The mining process in Bitcoin will need some computational power and electricity which will result in negative effects on the environment and high operating fees.


Lack of Flexibility

Blockchain 1.0 networks normally have limited work and functionality beyond the core transactional layer. During the period of Bitcoin serving as a digital currency, it does not contribute the flexibility to assist complex smart contracts and decentralized applications (dApps) which can be seen in future blockchain models.



  Blockchain 1.0 networks carry out the process in isolation which does not have efficient interoperability with another blockchain system. The lack of being able to communicate and share data easily will decrease the potential for transactions and collaborations.


Privacy Concerns

  Blockchain 1.0 provides pseudonymity however it cannot really provide comprehensive privacy and confidentiality. Bitcoin transactions are usually transparent and trackable, making it difficult to protect important information.



Blockchain 1.0 does not consist of effective governance mechanisms and systems. Decision-making procedures, protocol upgrades, and consensus alterations need broad consensus between network participants which might be a slow process. This governance problem can point out the capability to improve and enhance the blockchain to satisfy the needs.


User Experience

For non-technical users, Blockchain 1.0 is complex and difficult to apply. The procedure of creating wallets, managing private keys, and acknowledging transaction details can cause quite a challenge to users.


The Problems of Blockchain 2.0

Understanding the main problems of blockchain 2.0

Blockchain 2.0 announced several improvements over Blockchain 1.0 with smart contracts and decentralized applications (dApps) and it can be represented by Ethereum. However, it still has some challenges. They are



Same to Blockchain 1.0, the updated one, Blockchain 2.0 still has major concerns in scalability. Due to the fact that there are more decentralized applications and transactions on the Ethereum network, it can result in congestion and increased fees. The limitations and boundaries in the efficiency of transaction procedure and scalability delay the smooth process of dApps.


Security Concerns

Smart contracts which are one of the main features of Blockchain 2.0, produced a new attack surface. Programming carelessness in smart contracts can result in costly security attacks and exploits. The infamous case of the DAO (Decentralized Autonomous Organization) cyber attack in 2016 pointed out the risks due to smart contract vulnerabilities.



Blockchain 2.0 networks have some challenges in the upgrade and modification of protocols. Carrying out protocols to the underlying blockchain needs coordination and consensus among network participants. This procedure can become a slow process and can result in chain splits (hard forks) if disagreements between shareholders have occurred.


Environmental Factor 

Like the original 1.0, many blockchains 2.0 still depend on energy-intensive consensus mechanisms, such as proof-of-work (PoW). This usage can lead to impacts in the environment due to the increasing usage of blockchains.



Blockchain 2.0 has more developments in interoperability than Blockchain 1.0 however accomplishing complete interoperability among various blockchain networks is still a problem. Integrating and sharing information among different blockchains requires standardized procedures and an efficient communication system.



Governance in Blockchain 2.0 networks is still a complex case and decentralized decision-making procedures can occur challenges. Protocols for protocol improvements or alterations need consensus between users and obtaining widespread agreement can take several times.


User Experience

Blockchain 2.0 networks usually need users to have good technical knowledge in interacting with dApps and in management with cryptocurrency wallets.


Blockchain 3.0 Scalability


The main goal of Blockchain 3.0 is to solve the scalability issues that are encountered in earlier blockchain iterations. Sharding, side chains, and off-chain transactions are just a few of the scaling options that are included in Blockchain 3.0.


Sharding: Sharding is the division of the blockchain into smaller pieces known as shards. A subset of transactions is processed by each shard, enabling parallel processing and higher performance.


Side Chains: Side chains are distinct blockchains linked to the primary blockchain. They are able to independently process transactions, which eases congestion on the main chain and enhances scalability.


Off-Chain Transactions: Off-chain transactions use state channels or payment channels to take place apart from the main blockchain. With the use of these channels, parties can carry out a variety of transactions privately and settle them on the primary chain afterward, which speeds up transactions and eases congestion.


Blockchain 3.0 Privacy


Blockchain 3.0 seeks to increase privacy and confidentiality while maintaining the blockchain's transparency and integrity.

Proofs of Zero Knowledge: Users can demonstrate the veracity of information using zero-knowledge proofs without disclosing the underlying data. By guaranteeing that private information is hidden while validating transactions or carrying out smart contracts, this method promotes privacy.

Ring Signatures: By hiding the sender's identity, ring signatures allow for anonymous transactions. They enable a user to sign a transaction with a variety of potential signers, making it difficult to pinpoint the original signer.


Blockchain 3.0 Interoperability

Blockchain 3.0 places a strong emphasis on interoperability, allowing for easy data sharing and communication between various blockchain networks. Its objectives include the creation of standards, protocols, and cross-chain communication systems. Through this interoperability, assets and data may be moved between various blockchains, creating new opportunities for collaboration and integration.

Atomic Swaps: Without the use of middlemen, atomic swaps allow for direct peer-to-peer asset trades between various blockchains. It guarantees secure and trustless transactions between various cryptocurrencies or tokens.

Cross-Chain Smart Contracts: Smart contracts that span multiple blockchains can now be carried out in Blockchain 3.0. Complex interactions and cooperation between decentralized applications (dApps) running on several blockchains can be possible through this functionality of Blockchain 3.0.


Blockchain 3.0 Governance

Blockchain 3.0 investigates alternative consensus and governance models to enhance network performance and decision-making to be better than previous models.

Proof-of-Stake (PoS): This consensus method selects validators to add new blocks based on their ownership or stake in the cryptocurrency. It improves scalability and uses less energy than conventional proof-of-work (PoW).

Delegated Proof-of-Stake (DPoS): This is a variation of Proof-of-Stake (PoS) in which participants choose a small number of delegates to approve transactions and build new blocks. Faster block confirmation and greater scalability become possible by DPoS.


Examples of blockchain 3.0 projects

5 Examples of blockchain 3.0 projects

Blockchain 3.0 projects can be a representative of the future of blockchain technology. We have already witnessed the developments and enhancements over previous models. There are several projects to be shown as good examples of Blockchain 3.0 projects.



Cosmos is a blockchain 3.0 interoperability-focused project. The Cosmos Hub, a network of interconnected blockchains, allows for data transfer and communication between various chains. IBC (Inter-Blockchain Communication) is a protocol that enables cross-chain transactions and interoperability across different decentralized apps. Cosmos is a project that uses IBC.



A blockchain platform called Cardano seeks to offer a safe and scalable framework for the creation of decentralized applications and smart contracts. It uses the proof-of-stake (PoS) consensus algorithm known as "Ouroboros," which improves scalability and energy effectiveness. To secure the security and dependability of its blockchain, Cardano also prioritizes academic rigor and formal verification.



A decentralized oracle network known as Chainlink connects smart contracts to real assets. Oracles act as reliable information providers by giving on-chain smart contracts access from off-chain sources. By deploying a decentralized network of nodes to gather and validate data before sending it to smart contracts, Chainlink protects the security and dependability of these oracles, increasing the usefulness and adaptability of blockchain-based utilizations.



The blockchain platform TRON is dedicated to building a decentralized environment for digital entertainment and content. It promises to make it possible for digital content creators to directly monetize their work while enabling the seamless sharing and distribution of things like music, films, and games. TRON's consensus mechanism, delegated proof-of-stake (DPoS), enables high transaction throughput and scalability.



Polkadot is a multi-chain platform made to make it possible for various blockchains to communicate with one another. In order to enable the transmission of assets, data, and information between chains, it aims to build a decentralized and scalable network of interconnected blockchains. To promote interoperability and enable secure transactions, Polkadot employs a distinctive relay chain and para chain architecture.


Final words


In conclusion, Blockchain 3.0 solves the problems of past generations by introducing improvements in scalability, interoperability, privacy, and governance. By utilizing innovative strategies and consensus methods, it seeks to improve the scalability, effectiveness, and adaptability of blockchain technology to a wider range of utilization, creating new opportunities for different sectors and applications.