Blockchain technology is one of the great innovations of the 21st century given the impact it has given on various sectors, from financial to manufacturing as well as healthcare. Unknown to many, is that blockchain history dates back to the early 1990s.
1991-2008: Early Years of Blockchain Technology
How did blockchain emerge? Stuart Haber and W. Scott Stornetta’s paper published in 1991, How to Time-Stamp a Digital Document, is what many consider to be the invention of blockchain technology. Their first work involved working on a cryptographically secured chain of blocks whereby no one could tamper with timestamps of documents.
In 1992, they upgraded their system to incorporate Merkle trees that enhanced efficiency by enabling the collection of more documents on a single block. While in 2008, blockchain started to gain attention, thanks to Satoshi Nakamoto for the advent of cryptocurrency, known as Bitcoin.
Nakamoto conceptualized the first blockchain in 2008 from where the technology has evolved and found its way into many applications beyond cryptocurrencies. Satoshi Nakamoto released the first whitepaper about the technology in 2009. In the whitepaper, he provided details of how the technology was well equipped to enhance digital trust given to the decentralization aspect that meant nobody would ever be in control of anything.
Ever since the development of Bitcoin as the first application of the digital ledger technology has evolved resulting in new applications that make up the blockchain history.
Blockchain is a platform that allows people to carry out transactions of all sorts without the need for a central or trusted party. In simple terms, blockchain is a peer-to-peer distributed ledger that is secure and used to record transactions across many computers. The ledger’s contents can only be updated by adding another block linked to the previous block. It can also be envisioned as a peer-to-peer network running on top of the internet.
The blocks that form a blockchain contain batches of transactions verified by participants in a network, where the database is shared in a transparent manner. Everyone can access it. Each block comes with a cryptographic hash of a previous block in the chain. Read more on What is Blockchain.
Evolution of Blockchain: Phase 1 – Transactions
2008-2013: Blockchain 1.0: Bitcoin Emergence
Most people are confused that Bitcoin and Blockchain are the same things. However, it is not the case, as one is the underlying technology that powers most applications, and one of them is cryptocurrencies.
Bitcoin came into existence in 2009, as the first-ever application of the blockchain technology. Over the past few years, the cryptocurrency hit the airwaves, a number of applications have cropped all of which seek to harness the principles and capabilities of the digital currency.
Evolution of Blockchain: Phase 2 – Contracts
2013-2015: Blockchain 2.0: Ethereum Development
In a world where innovation merges with the desire and hope to create a better world, Vitalik Buterin is among developers who felt Bitcoin has not leveraged the full capabilities of blockchain technology.
Concerning Bitcoin’s limitations, Buterin started working on what he thought would be a blockchain that can perform various functions apart from being a peer-to-peer network. Hence, Ethereum was born in 2013 as a new public blockchain with added functionalities compared to Bitcoin.
Ethereum is the true revolutionary system that has spawned from Bitcoin. What differentiates those two are their blockchain networks; where Ethereum blockchain allows people to record other assets like contracts. The new feature upholds Ethereum functionalities from being a cryptocurrency to a platform for developing decentralized applications as well.
Officially went live in 2015, Ethereum blockchain has evolved to become one of the major applications of the technology given its ability to support smart contracts to perform various functions. The platform also processes a higher number of daily transactions, making its market cap increase significantly in the cryptocurrency space.
Evolution of Blockchain: Phase 3 – Applications
2018 – Present: Blockchain 3.0: The Future
Welcome to the new world of blockchains.
Blockchain development does not stop with Bitcoin and Ethereum. In recent years, a number of projects have encountered the capabilities of the technology. Meanwhile, developers also took the opportunity to issue some of the deficiencies of Bitcoin and Ethereum in addition to coming up with new features levering blockchain capabilities.
These days, the blockchain future seems promising as the governments and enterprises are seeking to spur innovations and applications. Clearly, one day there will be a public blockchain that anyone can utilize.
Experts expect the technology to help in the automation of most tasks handled by professionals in all sectors. Notably, the technology is already finding great use in supply management as well as in the cloud computing business.
As the technology evolves, Gartner Trend Insights expects at least one business built on blockchain to come into being valued at more than $10 billion by 2022. The research firm expects the business value of the digital ledger technology to grow to over $176 billion by 2025 and exceed $3.1 trillion by 2030.
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A keen researcher who believes in enriching her knowledge. For Shuhada, the crypto world intrigues her sense and offers plenty of high delicious 'crypto cuisines'.