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Blockchain has the potential to explore and grow to be a bedrock of the all-embracing and record-keeping systems. This concept was introduced way back 10 years ago and was initiated by a group of unknown people behind the cryptocurrency Bitcoin. The technology was named under the pseudonym of Satoshi Nakamoto. Let us get a glimpse at all sorts of terms and concepts related to blockchain technology.
Blockchain Technology
Blockchain technology is a process of storing and transferring information of every transaction in a distributed ledger which is quite chronological, secure, and immutable. Initially, a cryptographer named David Chaum in his 1982 dissertation proposed a blockchain-like protocol framing the concept through "Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups."
Further, in 1991 a team of research scientists Stuart Haber and W. Scott Stornetta described Blockchain technology within a system for time-stamping digital documents that cannot be easily tampered with. The team incorporated cryptography for linking the blocks of data to turn it into a fluent chain. Later in 1992, the experts enhanced this structural system by using Merkle trees to enable multiple documents to be collected into one block. Hence, this was a great improvement in the history.
You are aware of the most famous and widely used application of blockchain technology- Bitcoin. This is a digital currency that was announced by an anonymous person/group under the name Satoshi Nakamoto. This cryptocurrency uses a peer-to-peer network for tackling and performing a publicly distributed ledger of transactions removing the necessity of a trusted authority or central server.
Bitcoin’s Role
Bitcoin as a cryptocurrency properly gave a solution to the problem of double-spending, which occurs when a user tries to use the same token/coin more than once. Bitcoin also released the concept of proof-of-work defined as a mode to validate high-end transactions and meanwhile create new blocks. Theoretically, this process happens by solving a mathematical puzzle which needs a lot of computational power.
A Glimpse History of Blockchain
1991
Stuart Haber and W. Scott Stornetta traced a cryptographically secured chain of different blocks for the first time. These scientists and experts practised some computational practical Solutions in order to apply the time-stamping using digital documents to avoid any modulation or misplacement in the database. So, they announced a system using cryptography to store the time-stamped documents in a Chain of Blocks.
1992
Later in 1992, Stuart Haber and W. Scott Stornetta used a system - Merkle Trees to form a legal corporation and introduce some variant set of features. Hence, Blockchain Technology came in handy which helped to keep several documents collection within one block. The concept of Merkle used a Secured Chain of Blocks to keep numerous data records in a sequence. However, this new tech went into vain and strict hiding after the release of the Patent in 2004.
1998
Further in 1998, Nick Szabo- a computer scientist and expert worked on a ‘bit gold’- a decentralised digital currency to bring some closure and evolution of new concepts.
2000
Later, Stefan Konst published his theory pursued based on cryptographic secured chains indulging his own ideas for implementation.
2004
In the year 2004, Hal Finney- a cryptographic activist established a system for digital cash in the name of “Reusable Proof of Work”. This era was signed as the game-changer in the history of Blockchain as well as Cryptography. This exclusive system pushed many experts and motivated everyone to solve the Double Spending Problem by securing the ownership of tokens eventually registered on a trusted server.
2008
Later, the developers effortlessly working under the pseudonym Satoshi Nakamoto introduced a white paper establishing the perfect model for a blockchain. They conceptualized the core focused concept of “Distributed Blockchain” in this released white paper naming it as” A Peer-to-Peer Electronic Cash System.” The model of Merkle Tree was modified and revolutionized to prepare a system which needs to be more secure displaying a safe history of data exchange. This new system works on a peer-to-peer network of time stamping which since then has become so useful that Blockchain is now the backbone of Cryptography.
2009
Nakamoto enforced the first blockchain as the public ledger for transactions with the primary use of Bitcoin. Since then, you will notice the steady evolution of Blockchain becoming more promising and now a need in major used domains.
2014
In 2014, blockchain technology got separated from currency stating its own use cases while its potential is explored in diverse financial, and interorganisational transactions. Blockchain 2.0 was born which defined the working of applications beyond currency. Meanwhile, the Ethereum blockchain system released some computer programs into the blocks highlighting financial instruments like bonds which is now known as smart contracts.
2016
Two years later, the concept of Blockchain is used as a single word rather than implementing it as two different concepts mentioned in the original paper of Nakamoto. In the same era, a bug in the Ethereum DAO code was drawn to light as a hard fork of the Ethereum Network. On the next level, the Bitfinex bitcoin exchange was attacked resulting in the loss of almost 120,000 bitcoins. This year was indeed a disaster for investors closely connected to this event.
2017
Japan accepted Bitcoin as a legal currency. Meanwhile, Block. One company released the EOS blockchain operating system to back up commercial decentralized applications.
2018
Bitcoin turned 10 in the year 2018 which followed the eventual drop in the bitcoin value continuously hitting the rock bottom of value worth $3,800 at the end of 2018. Some online platforms including Google, Twitter, and Facebook started restricting and banning the advertising of cryptocurrencies.
2019
In this era, Ethereum network transactions crossed a bar of 1 million in a single day. Meanwhile, Amazon released a statement on the general availability of the Amazon Managed Blockchain service right accessible on AWS.
2020
Stablecoins came in demand and trend promising more reliability and stability which is not seen in traditional cryptocurrencies. Later on the scale, the second highest cryptocurrency Ethereum launched Beacon Chain while preparing documentation of Ethereum 2.0.
2022
Ethereum got renewed from the Proof of Work (PoW) consensus mechanism to Proof of Stake (PoS). Whereas, the original Ethereum mainnet was affiliated with Beacon Chain which already had hands-on Proof-of-Stake. Hence, now you can view it as one chain while the energy consumption of Ethereum has minimized by ~99.95%.
Role of Blockchain Technology
Since history tells it all blockchain technology has already inspired and brought on board countless applications and innovations which includes Ethereum as a major contribution. This platform along with the follower ABCN blockchain is used to create improvised smart contracts and limitless decentralized applications. On the other hand, Litecoin is noted as a faster and cheaper version of the initial cryptocurrency Bitcoin.
Meanwhile, a subordinate project named Hyperledger initiated a system to develop some enterprise-grade blockchain solutions. Since the era and bandwagon new wave of new concepts and applications, blockchain technology is widely used for various purposes and use cases including supply chain management, voting systems, digital identity, healthcare records, entertainment and many more. In logical terms, you can define a blockchain posing the below-mentioned layers:
· Infrastructure (hardware)
· Networking (node discovery, information propagation and data verification)
· Consensus (proof of work and proof of stake)
· Data (blocks and transactions)
· Application (smart contracts/decentralized applications)
Final Words
Blockchain technology since history is still evolving and exploring many more challenges while acquiring countless opportunities ahead. Some naming challenges are scalability, security, privacy, reliability, interoperability, regulation, and adoption alike. Whereas, some naming opportunities are transparency, efficiency, innovation, trust, and social impact alike. Blockchain technology still holds the potential to metamorphose many industries/domains in the future.
