In this section, various layers of blockchain technology are presented.
It is thought that due to the rapid development and progress being made in blockchain technology, many applications will evolve.
Infrastructure, Platform & Application
Some of these advancements have already been realized, while others are anticipated in the near future based on the current rate of advancement in blockchain technology.
The three levels discussed here were initially described in the book Blockchain: Blueprint for a New Economy by Melanie Swan, O’Reilly Media, 2015 as blockchain tiers categorized by applications in each category.
This is how blockchain is evolving, and this versioning shows different tiers of evolution and usage of blockchain technology.
In fact, all blockchain platforms, with limited exceptions, support these functionalities and applications.
This versioning is just a logical segregation of various blockchain categories based on the way that they are currently being used, are evolving, or predicted to evolve.
Also note that this versioning is being presented here for completeness and for historic reasons, as these definitions are somewhat blurred now, and with the exception of Bitcoin (Blockchain 1.0), all newer blockchain platforms that support smart contract development can be programmed to provide the functionalities and applications mentioned in all blockchain tiers: 1.0, 2.0, 3.0, and beyond.
Why This Matters for Blockchain Technology
In addition to Tier 1, Tier 2 and Tier 3, or Tier X in the future, the following represents my own vision of what blockchain technology eventually could become as this technology advances: Blockchain 1.0: This tier was introduced with the invention of Bitcoin, and it is primarily used for cryptocurrencies.
Also, as Bitcoin was the first implementation of cryptocurrencies, it makes sense to categorize this first generation of blockchain technology to include only cryptographic currencies.
All alternative cryptocurrencies as well as Bitcoin fall into this category.
It includes core applications such as payments and applications.
Key Points to Remember
- Tiers of blockchain technology In this section, various layers of blockchain technology are presented.
- It is thought that due to the rapid development and progress being made in blockchain technology, many applications will evolve.
- Some of these advancements have already been realized, while others are anticipated in the near future based on the current rate of advancement in blockchain technology.
- The three levels discussed here were initially described in the book Blockchain: Blueprint for a New Economy by Melanie Swan, O’Reilly Media, 2015 as blockchain tiers categorized by applications in each category.
Going Deeper: Advanced Concepts
This generation started in 2009 when Bitcoin was released and ended in early 2010.
Blockchain 2.0: This second blockchain generation is used by financial services and smart contracts.
This tier includes various financial assets, such as derivatives, options, swaps, and bonds.
Applications that go beyond currency, finance, and markets are incorporated at this tier.
Conclusion
Tiers of blockchain technology represents one of the many innovative layers that make blockchain technology so powerful and transformative. As distributed systems continue to evolve, a solid understanding of these core concepts becomes increasingly valuable — not just for developers, but for anyone building, investing in, or working alongside blockchain-powered systems.
Whether you are just starting your blockchain journey or deepening existing expertise, mastering these fundamentals gives you the tools to think clearly about decentralized systems and make smarter decisions in this rapidly evolving space.