What is Blockchain 2.0?

What is Blockchain 2.0

The term blockchain 2.0 serves to distinguish between Bitcoin as an asset and the “blockchain as a programmable distributed trust infrastructure”  More generally, with additions of new scalable features of on-chain utility and extensibility. Instead of viewing the blockchain as part of the decentralisation of money and payments, blockchain 2.0 expands the scope of the technology to enable the decentralisation of markets more generally, and the transaction will involve other types of assets by providing registers for certificates and rights and obligations in real estate, IPR, cars, art works and so on.

As blockchain 2.0 is code the new application is said to be running on a new set of protocols (“blockchain 2.0 protocol”). A comparison with the protocols of the Internet and its layer of stacks illustrates the relation between blockchain 1.0 and blockchain 2.0. The former can be viewed as the TCP/IP transport layer whereas the latter can viewed as HTTP, SMTP and FTP. In this context blockchain 2.0 applications would be akin to browsers, social networks and file sharing service.

Smart Contract

Smart Contract is a computer code running on top of a blockchain containing a set of rules under which the parties to that smart contract agree to interact with each other. If and when the pre-defined rules are met, the agreement is automatically enforced. The smart contract code facilitates, verifies, and enforces the negotiation or performance of an agreement or transaction. It is the simplest form of decentralized automation.

It is a mechanism involving digital assets and two or more parties, where some or all of the parties deposit assets into the smart contract and the assets automatically get redistributed among those parties according to a formula based on certain data, which is not known at the time of contract initiation

Smart contracts are scripts executed in blockchain environment; their codes are accessible to all and anyone can verify the correctness of code execution. The verification is carried out by miners in the blockchain environment. This ensures honest execution of the “contract.”