Blockchain first entered the world as the Distributed Ledger Technology (DLT) supporting the earliest Bitcoin transactions; done by Satoshi Nakamoto themselves.
Almost sixteen years have passed since then and blockchain development has come leaps and bounds, becoming the cornerstones of multiple markets and its own industry in its own right. The rise of blockchain developer companies, seemingly popping up out of every corner, shows the potential of blockchain technology.
The crypto-sphere is too often focused on hype coins like Shiba Inu or speculative price analysis. However, the real value is being driven into blockchain development by some of the smartest individuals on the planet with trustless, permissionless, and decentralized values at the cornerstone of their coding.
In this article, we will discuss Layer 1 vs Layer 2 blockchains, the major blockchain development companies, and what we can expect from blockchain in the near future.
Blockchain Development Leaders
Although there are dedicated Blockchain development companies making waves in the industry, more traditional technology companies, such as Microsoft, are also active in the space. In September of 2021, it was declared that Microsoft is shutting its Azure blockchain down due to declining interest in the product and Blockchain-as-a-Service (BaaS).
Microsoft gave their existing clients a converting solution through ConSensys.
One of the leading blockchain companies is Chainalysis, a company focused on building trust in blockchains through data. Their clients are not exclusive to Barclays, Commonwealth Bank, and Bitpay; their services monitor over $400bn worth of crypto assets every month.
Other blockchain development leaders are quickly finding out the unique problems blockchain technology solves, the efficiencies they create, and the services they care for which we once thought were riddled where middlemen.
For example, short-term decentralized car rental systems have been created on the blockchain, which promotes peer-to-peer rental systems without a middleman.
Lastly, one of if not the biggest companies embroidering blockchain technology is IBM, aiming to bring hyperledger to their client’s businesses. IBM has invested over $200m in blockchain development and is constantly hiring talented blockchain developers to join their company.
Looking forward
As blockchain development continues to be the spearhead of the crypto community, many wonder what’s next? Many blockchain development companies will focus on two main aspects:● Blockchain as a service (BaaS)
BaaS is the bread and butter for blockchain developer companies, providing blockchain solutions for others wishing to build or use their own apps or smart contracts. BaaS often consists of basic services which the clients then build on top of; granting them a strong foundation on which they build their concept on.
For example, companies will utilize BaaS companies to help keep their data safe, immutable, and private by using blockchain technology. It is a win-win solution, as customers are more willing to trust a service, knowing it is built on top of open-source smart contracts, instead of a centralized authority. ● Layer 1s Vs Layer 2 Blockchains (L1 VS L2)
With greater adoption already here and more projected in the future, Layer 1 blockchains, such as Ethereum, are all struggling with the biggest problem: Scalability.
Step in Layer 2 blockchains. Layer 2 protocols or frameworks are built on top of the existing chain to solve scalability and speed issues. A great example is Polygon, built on top of the Ethereum chain.
Once Layer 2 is adopted, much of the grunt-work can be loaded off Layer 1 whilst keeping the security that comes from the chosen consensus mechanism. Adding a second layer is often called an off-chain solution to the problems faced by major L1s.
These Layer 2 can now focus on speed and scalability whilst they benefit from the security of the L1. A great example is the Polygon Network aimed at helping the Ethereum blockchain scale. One of the greatest benefits of Polygon is the extremely cheap transaction fees compared to Ethereum, whilst utilizing the safety of Ethereum validations. Polygon transactions are often less than $0.01 compared to Ethereum’s $15 average.
On top of this, Ethereum can manage around 14 transactions per second, compared to Polygon’s ability to handle 65,000 transactions per second.
Further, in the future, we are likely to see even greater development and adoption of L2 solutions to combat the life-long issues that L1 blockchains have suffered.
Conclusion
Blockchain development is still in its infancy, with some of the biggest blockchains and blockchain development companies yet to even exist. It is an extremely exciting space; one that we hope continues to flourish.
Only time will tell whether the promises made by large Blockchain developer companies will come true and mass adoption will occur.