Main page » Blockchain – what’s the story behind this technology?

Governments, companies, and other organizations research and implement blockchain technology to meet a wide variety of needs – most of which have nothing to do with digital currency. Blockchain offers security, immutability, traceability and transparency in a distributed network. This makes it well suited to applications that have become difficult to handle with traditional infrastructure.

Blockchain is a type of database that is a public ledger for recording transactions without having to be checked by a third party. Blockchain is distributed on a peer-to peer (P2P) network. It consists of data blocks that are linked together to form a continuous chain of unchanging records. Every computer on the network keeps a copy of the ledger to avoid a single point of failure. Blocks are added in sequential order, and they are durable and tamper-resistant.

Initially, blockchain provided a distributed public ledger to support cryptocurrency bitcoin. Blockchain made it possible to record bitcoin transactions without the need for a central trust authority to be established in a untrusted environment. This not only streamlined transactions, but also eliminated the costs associated with third party verification. Blockchain also provided greater transparency, traceability and security compared to conventional approaches to handling distributed transactions. Although the history of blockchain is relatively short, its effects are already widely felt.

Blockchain – early years

Many of the technologies on which blockchain is based existed long before the advent of bitcoin. One of these technologies is the Merkle tree, named after computer scientist Ralph Merkle. He described an approach to the distribution of public key and digital signatures called “tree authentication” in his 1979 Ph.D. dissertation at Stanford University. Ultimately, he patented the idea as a method of delivering digital signatures. The Merkle tree provides a data structure for verifying individual records.

David Chaum, in his 1982 doctorate, described a vault system used by mutually suspect groups to set up, maintain and trust computer systems. dissertation at the University of California, Berkeley. It was a system that contained many elements that made up the blockchain. Chaum is also credited with inventing digital cash, and in 1989 he founded the DigiCash Corporation.

Interestingly, at that time the P2P network was born, a concept popularized in 1999 by the now defunct Napster. Some people argue that Napster was not a true P2P network as it used a centralized server. However, this service continued to help breathe life into the P2P network, enabling the construction of a distributed system that could use the computing power and memory capacity of thousands of computers.

The proof-of-work (PoW) concept was also introduced during this era to verify computational effort and deter cyber attacks. This gave way to hashcash, the PoW algorithm that provides countermeasures in the event of a denial of service. Adam Back introduced hashcash in 1997 to reduce email spam. Then, in 2004, Hal Finney introduced a reusable PoW, a mechanism for receiving a non-removable or non-removable hashcash token in exchange for an RSA-signed token. The PoW approach plays a vital role in bitcoin mining.

2008-2009: Bitcoin begins and the blockchain grows

In 2008, Satoshi Nakamoto published a white paper outlining the concepts of bitcoin and blockchain. Nakamoto is believed to be a nickname used by an individual – or a group of people. According to the white paper, Blockchain infrastructure would support secure peer-to-peer transactions without the need for trusted third parties such as banks or governments. Nakamoto’s true identity remains a mystery, but there are many theories.

Introduced in 2008, the bitcoin / blockchain architecture was based on technologies and concepts from the previous three decades. The Nakamoto project also introduced the concept of ‘blockchain’. This made it possible to add blocks without having to be signed by a trusted third party. In fact, Nakamoto defined an electronic coin as a “digital signature chain” in which each owner passes the coin to the next owner. According to his white paper, this is done by “digitally signing the hash of the previous transaction and the public key of the next owner and adding them to the end of the coin.”

2010-2012: Dissemination of the blockchain network

By 2012, the passion for cryptocurrencies was well established. Bitcoin’s price has hovered around $ 5 for most of the year, with many swings up and down. Earlier this year, Mihai Alisie and Vitalik Buterin launched Bitcoin magazine and published their first issue in May. The Bitcoin Foundation was also established to promote bitcoin and improve public perception.

2013-2015: Ethereum and blockchain are gaining fame

In 2015, the Ethereum Frontier network was launched, allowing developers to write smart contracts and decentralized applications that can be deployed on a live network. Ethereum was on its way to becoming one of the largest applications of blockchain technology. At the same time, it attracted an active developer community that is still active today.

2016-present: Blockchain in the mainstream

During these six years, there has been a growing interest in using blockchain for non-cyber currency applications. This trend continues until 2021 as governments and businesses are looking for blockchain technology to handle a variety of use cases. Moreover, many cloud service providers now offer blockchain as a service, and the demand for skilled blockchain developers is greater than ever.

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