The Brief History of Blockchain — 5 Key Takeaways
Revolutionary technologies are more often than not taken for a way of life once in mainstream adoption. Take for example the internet world we live in today and the smartphones further simplifying communication and connectivity challenges. A couple of decades ago, these technologies were most sought after and even today, the progressive studies enable merging of new advanced technologies with the conventional ones.
Blockchain Technology is a distributed database that maintains a continuously growing list of ordered records, called “blocks.”
The zealous headlines in media have intrigued many to understand this technology but the cluttered information available online has instead confused the masses.
Hence, the progressive efforts by Blockchain researchers to embed blockchain courses in reputed institutes have garnered considerable response and is poised to grow further north in the coming times.
Blockchain Lab India, is commencing several notable courses in collaboration with top Institutes all around the nation.
Here are the important notes on the history of Blockchain Technology.
1. Blockchain — is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta.They wanted to implement a system where documents’ timestamps could not be tampered with or backdated. In 1992, Bayer, Haber and Stornetta incorporated Merkle trees to the design, which improved its efficiency by allowing several documents to be collected into one block.
2. Bitcoin — The first Blockchain Application that hit the world was in the form of a peer-to-peer network named, Bitcoin.The first blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008. It was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network. Proof of work was maybe one of the biggest idea behind the Nakamoto’s Bitcoin whitepaper because it allows trustless and distributed consensus.
In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20 gigabytes(GB). In January 2015, the size had grown to almost 30 GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50 GB to 100 GB in size.
Bitcoin, the way of decentralized payment transfer gave way for the creation of decentralized value transfer.
3. Smart Contracts introduced by the second generation of Blockchain, Ethereum. Ethereum was initially described in a white paper by Vitalik Buterin, with a goal of building decentralized applications. D-apps could be deployed to create either a private or a public blockchain network.
A “smart contract” is a set of programmed instructions for an exchange. Smart Contracts enables creation of decentralized applications (D-Apps).
Ethereum is (as of 2018) the leading blockchain platform for initial coin offering projects, with over 50% market share.
As of January 2018, there are more than 250 live DApps, with hundreds more under development. Some application examples include: digital signature algorithms, securitized tokens, digital rights management, crowdfunding, prediction markets, remittance, online gambling, social media platforms, financial exchanges and identity systems.
4. Introduction of ‘Proof of Stake’
Proof of Work concept is currently used to validate transactions and achieve consensus in the chain. The proof of work problem is solved by ‘miners’. The first miner to solve the problem gets a reward and then the verified transaction is stored on the blockchain. But as the blockchain network grows, so does the difficulty of proof of work problem and hence the verification process becomes more time consuming. Ethereum developers are interested in changing to a new consensus system called proof of stake.
Proof of Stake has the same goal as proof of work. With proof of stake, the creator of a new block “is chosen in a deterministic way, depending on its wealth, also defined as a stake.” All the miners, now known to be forgers are rewarded with transaction fees on consensus achievement.
5. Blockchain Technology in Mainstream Enterprise Adoption.
Increased potential application use cases has enabled several pilot runs by large organizations. This in a way has led to innovative measures to enhance blockchain technology.
One notable startup is Auxledger, a product by Auxesis Group Pvt. Ltd. which enables cross-chain communication (interoperability) aiming to form the decentralized internet of tomorrow.
Predicting the future of Blockchain is hard but the integrated view on this revolutionary technology changing the future, makes the future outlook optimistic. Looking at the progressive developments in blockchain, the future indeed can arrive earlier than any of us may think.
