Decentralized consensus technology has changed dramatically in the decade since Bitcoin’s debut. The proof of work methods currently employed by many decentralized consensus networks have benefits such as a field-tested security record, and downsides such as high energy use and financial barriers for mining. However, various mechanisms such as ASIC-resistant proof of work, proof of stake, proof of spacetime, and even hybrid methods are currently in development and operation.

Early decentralized consensus networks distributed a public ledger that all participants could read, with no privacy protections for users. Newer projects have implemented a variety of security approaches and features, ranging from encryption of sensitive data to novel applications of zero-knowledge poofs. These protocols utilize clever cryptographic methods to allow all parties to establish decentralized consensus on the shared ledger, without posting all data in plaintext that the public can interpret and analyze.

The blockchain data structure is simply the first iteration of technical methods that enable humanity to achieve decentralized consensus, and fundamental new breakthroughs are arriving at an incredible pace. The global community is continuously improving the performance and expanding the functions of initial blockchain implementations through innovations such as second-layer scaling solutions, and sharding. Furthermore, decentralized consensus tools are being developed using alternatives to traditional blockchains, such as complex directed acyclic graphs (DAGs) and even constant-size recursive blockchains.

It is not surprising that the foundational tools of modern decentralized consensus methods were introduced in the context of a currency use case. Global economic turmoil exacerbated pain points related to general lack of financial sovereignty, and maintaining a digital ledger is an intuitive application of the new ability to create consensus on a shared document.

The blockchain data structure is simply the first iteration of technical methods that enable humanity to achieve decentralized consensus.

In the last decade, decentralized consensus technology has advanced to enable a range of uses beyond storage and transfer of value. We now have the ability to create smart contracts that interweave value with code, allowing multiple parties to craft autonomous self-enforcing agreements that are executed by open-source, public, blockchain-based distributed computing platforms, such as Ethereum. Smart contracts provide the infrastructure backbone to build decentralized application platforms (DApps) that have the potential to replace many of our third-party legacy institutions with decentralized peer-to-peer networks.

Decentralized consensus systems are being used to revolutionize supply chain management, run global computations, create digital assets, share resources, create digital IDs, enable data sovereignty, build financial infrastructure for the Internet of Things, manage property titles, vote securely, and interchange assets through a decentralized exchanges and atomic swaps.