How Long Has Blockchain Technology Been Around?
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Blockchain technology is a revolutionary development in the field of digital transactions and record-keeping.
This innovative technology has been around since 2008, and since then, it has been widely adopted across various industries.
In this article, we will delve into the history of blockchain technology and explore how it has evolved over the years.
What is Blockchain Technology?
When you type ‘what is blockchain technology’ into the Google search bar, a list of incomprehensible articles with difficult terminologies will likely pop up. For an average person, understanding these terms and jargon might seem to be a daunting task. So, let us make this very simple for you.
Blockchain technology is a data-storing system that makes use of multiple computers. The data is stored in blocks and these blocks are linked together in a chain.
Think of it as a beaded necklace. It can be used to store data related to financial transactions, digital assets, contracts, and records of ownership. Each new block created during the record-keeping process contains a hash from the previous block. Moreover, each transaction has a digital signature and a timestamp. These three things together ensure that the record stored is 100% authentic and unchangeable.
The stored data can also be shared between two different parties without the slightest hint of sharp practice. By permitting transparent sharing of data, blockchain technology not only culls the need for brokers and intermediaries but also helps conduct transactions at a speed of knots. Moreover, it also enhances efficiency and helps maintain the anonymity of the parties involved.
This phenomenal technology holds great potential to transfigure leading sectors of the world.
Let us take the healthcare sector as an example. Here, all the necessary data related to patients, ranging from their medical histories to the care that they are currently undergoing, can be stored in blocks. If deemed necessary, the record can be shared between different hospitals for follow-up of the patient.
Other industries that may make use of blockchain technology for better outcomes include:
- Legal sector
- Transport and logistics
- Government institutions
- Supply-chain management
1979-2007: The Early Days of Blockchain Development
Many people believe that blockchain technology did not exist before the 21st century. Little do they know that this innovation has been in development since 1979. We will now have a closer look at how blockchain technology evolved over the years.
In 1997, a proficient computer scientist, Ralph Merkle, in his Ph.D. thesis for Stanford University, presented the ‘Merkle tree’ as a unique hash-based data structure on which the entire blockchain technology is based today. Merkle trees are utilized by leading blockchains like Bitcoin and Ethereum.
You might be wondering what Merkle trees exactly are! It can simply be defined as structures that make sharing and verification of data simple and straightforward. This is achieved by compressing data into a format that is readily shareable.
Digital Cash and Blind Signatures
In 1982, David Chaum, an adept American computer scientist, helped further blockchain technology through the invention of blind signatures and digital cash. Both these innovations were included in David’s Ph.D. dissertation that he presented before the University of California, Berkeley.
A blind signature or digital signature helps maintain the anonymity of the sender and secures the contents of the message being sent. The content of the message is obscured or it becomes hazy after the recipient signs it. Blind signatures can be even better understood if we take a closer look at the electronic voting system.
In electronic voting, there are two parties involved; the voter and the voting authority. Before the voting authority receives a vote, a digital signature blinds the contents of the vote and the identity of the voter. In this way, the choice of the voter and his identity are preserved while at the same time, the vote is considered 100% authentic.
As opposed to the traditional currency that takes the form of paper, digital cash is a form of electronic currency that exists as a digital code. Through the invention of digital cash, David Chaum helped maintain the privacy of clients and mitigated the need for intermediaries. This in turn helped improve the transparency and efficiency of transactions.
In 1991, the concept of timestamping was introduced by Stuart Haber and W. Scott Stornetta. The following year they managed to integrate timestamping with Merkle trees, thereby, allowing countless timestamping certificates to be stored on one block.
Time stamps are a set of codes assigned to each transaction based on the time that the transaction was performed. They are sometimes accurate down to the last microsecond. These stamps serve as an unquestionable proof of authenticity, thereby, putting a stop to the tampering of digital documents.
The use of timestamps prevents scammers from back-dating or forward-dating electronic documents.
P2P Network and Proof-of-Work (PoW)
The concept of a peer-to-peer network was first introduced by Napster, a renowned music platform that allows the seamless sharing of digital audio files. Although Napster was a centralized system which made its inclusion in the P2P network questionable, it is still attributed to the birth of the idea of decentralized P2P trading platforms.
The term Proof-of-Work was first coined by Moni Naor and Cynthia Dwork, two highly adept computer scientists who presented the idea in a 1993 journal article. But it was not until 1999, that this mechanism was made official. Markus Jakobsson and Ari Juels were the first ones to present this breakthrough idea in front of the world.
Proof-of-Work (PoW) is the older and more commonly used of the two existing consensus mechanisms today, i.e., PoW and PoS (Proof-of-Stake). It is a type of cryptographic proof that allows the donor party to prove to the beneficiary that a certain degree of computation work has been completed on their part. This consensus system helps to cull Denial-of-Service attacks.
2008-2009: The Golden Age of Blockchain and Bitcoin
It wouldn’t be wrong to say that blockchain technology gathered momentum since 2008. In this year, Satoshi Nakamoto put forward a whitepaper that explained in depth the concept of Bitcoin and blockchains. Satoshi Nakamoto is a pen name adopted by a person or a group of people who laid the foundations of this technology.
Blockchain technology was created to curb the need for brokers, third parties, and intermediaries. All the concepts and innovations from the past 30 years were brought together and the official structure of Bitcoin was finally presented in 2008. Satoshi also introduced the concept of a chain of blocks which allowed each block to be linked to the one before it.
This allowed proper sequencing and storage of data and slashed the need for a third party while performing financial transactions.
Although nearly all of the paperwork had been successfully completed in 2008, no actual functioning of blockchain technology had begun so far. It was not until 2009, thus, that blockchain officially started operating.
January 3, 2009
The first ever Bitcoin block was mined by Satoshi and was successful. This gave vigor to the idea of blockchain technology being used in different sectors of the world. The mined block was named the Genesis Block.
January 12, 2009
10 Bitcoins were transacted for the first time between Satoshi and Hal Finney.
October 10, 2009
A channel was introduced on Internet Relay Chat by the name of Bitcoin-dev. This channel was dedicated to Bitcoin developers who helped maintain its open-source network.
October 31, 2009
The first-ever decentralized exchange was founded where people were able to convert traditional paper currency into Bitcoin.
November 22, 2009
A platform that went by the name ‘Bitcoin Forum’ was launched by Satoshi, where important updates regarding the digital currency were shared.
2010 till Present
In 2010, Jed McCaleb created a Tokyo-based Bitcoin exchange that went by the name of Mt. Gox. The launch of this exchange caused a cascade of reactions that resulted in exponential growth in the popularity of blockchain technology.
In August 2010, the growth of blockchain was hindered by a security breach, where a hacker added 184 billion Bitcoins to one of the blocks. Satoshi Nakamoto, the creator of the technology, then reappeared to address the issue and improve security.
Ever mercurial, Satoshi disappeared soon after, but blockchain and Bitcoin have continued to gain popularity and acceptance.
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