Module 1.0.0. The Three Generations of Blockchains
Since its creation in 2008, blockchain technology has been making innovative changes. The first generation of blockchains was the POW algorithm that was birthed in 2008 by Satoshi.
In 2012, Sunny King and Scott Nadal established a second generation of blockchains that uses the POS algorithm.
However, like POW blockchains, POS blockchains still struggle with scalability. That is, with increased number of transactions, the speed of the POW and POS blockchains decreases. A true currency must be able to overcome such scalability problems.
Hence, in 2017 Gavin Wood, co-founder of Ethereum, devised an idea for a new type of blockchain, the third generation, that utilizes the Proof of Authority (POA) consensus algorithm.
See Table 2 for the Three Generations of Blockchain.
| Table 2: The Three Generations of Blockchains | |||
| Item | POW | POS | POA |
| Blockchain type | First Generation | Second Generation | Third Generation |
| Invention Date | 2008 | 2012 | 2017 |
| Inventor | Satoshi Nakamoto | Sunny King and Scott Nadal | Gavin Wood |
| Algorithm | Computational Energy | Coin Staking | Identity Staking |
| Speed | Fast | Faster | Fastest |
| Scalability | Very Slow | Slow | Fast |
| Examples | Bitcoin, Litecoin | Cardano, Algorand | VeChain, UMI |