To say technology is evolving quicker than a decade ago when Satoshi Nakamoto published his bitcoin white paper is an understatement.
Just compare your smartphone to the BlackBerry or iPhone 3G that you probably sported in 2008. The mobile Internet has come a long way.
The same holds true for distributed ledger technology. Although Wall Street may be mere months away from seeing the first DLT-based service go into production, many technologists already are discussions DLT 3.0.
The next-next-generation of the technology will bring new business models to market that never could never be supported by today's technology.
One possible example suggested by Igor Telyatnikov, president and COO of AlphaPoint, at the Synchronize 2018 conference in Manhattan involved a community-owned autonomous car, which would be a shared service. When no one in the community is using the vehicle, it would generate income as an Uber or Lyft driver and refuel itself using its earnings from the ride services.
But to get to 3.0, the industry first needs to adopt DLT version 2.0.
What separates version 2.0 from what most firms are experimenting with today? The answer is simple: Revenue.
For the past two to three years DLT's sales pitch has been reducing operational friction and improving process efficiency, which is well and good. But as fellow panelist Chris Church, chief business development officer at Digital Asset and fellow panelist noted, "No one succeeds at business just by cutting costs."
The next-generation of DLT will enable new primary and secondary markets via the tokenization of assets.
The UK's Royal Mint and the CME Group have been working on developing the RMG, a digital token that certifies the ownership of one gram of gold held by the Royal Mint and is physically deliverable to the token holder.
However, physically backed commodities are just the proverbial tip of the iceberg. The tokenization of financial instruments, or even tranches of financial instruments, will lead to brand new secondary markets.
How long will it take? No one knows.
One hurdle that the technology still needs to overcome is the issue of interoperability. Until investors and businesses can move their digital assets from one blockchain to another one, each blockchain will remain a walled garden with limited potential for growth.