A blockchain is a digital, decentralized, public ledger of all cryptocurrency transactions. Perpetually growing as ‘completed’ blocks (latest transactions) are recorded and further added to it in chronological order, it permits market participants to keep track of digital currency transactions without central record keeping. Every node (a computer connected to the network) gets a duplicate of the blockchain, that is downloaded mechanically.
Primarily evolved as the accounting approach for the virtual currency Bitcoin, blockchain – which is referred to as distributed ledger technology – are acting in a ramification of commercial programs today. At present, the blockchain technology is mainly used to verify transactions, within digital currencies although it’s possible to digitize, code and insert almost any document or file into the blockchain. Doing so creates an indelible document that cannot be modified; furthermore, the data’s authenticity can be demonstrated through the whole community by the use of the blockchain in preference to a solely centralized authority.
A Brief History of Blockchain Technology
The cryptography secured chain of blocks was first originated in 1991 by Stuart Haber and W. Scott Stornetta. In 1992, Haber and Stornetta incorporated its Merkle Trees, which improved its efficiency by allowing several documents to be collected into one block.
The first blockchain was formulated by Satoshi Nakamoto, whose true identity is still unknown, released the whitepaper Bitcoin: A Peer to Peer Electronic Cash System in 2008 that described a “purely peer-to-peer version of electronic cash” known as Bitcoin. The words block and chain were used separately in Satoshi Nakamoto’s original paper but were eventually popularized as a single word, blockchain, by 2016. It was practically implemented the following year in 2009 by Satoshi Nakamoto when it was made public and was offered to open source community. Blockchain serves as the public ledger for all transactions of Bitcoin on the network. Blockchain has developed over the last decade into one of today’s biggest ground-breaking technologies with the potential to impact every industry from financial to manufacturing to educational institutions. Let’s go through a brief history of blockchain technology.
We can’t discuss the history of blockchain technology without first starting with a discussion about Bitcoin. Blockchain provided the answer to digital trust because it records important information in a public space and doesn’t allow anyone to remove it. It’s transparent, time-stamped and decentralized. Through the use of a blockchain, bitcoin became the first digital currency to solve the double spending problem without requiring a trusted authority and has been the inspiration for many additional applications.
“Blockchain is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one,” Sally Davies, FT Technology reporter.
In August 2014, the bitcoin blockchain document size, containing facts of all transactions which have befallen on the network, reached 20 GB. In January 2015, the scale had grown to nearly 30 GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50 GB to a hundred GB in size.
The term blockchain 2.0 refers to new applications of the distributed ledger technology blockchain database, first emerging in 2014. But what is Blockchain 2.0 anyway? Blockchain 2.0 is in effect a mechanism allowing programmable transactions (transactions modified by a condition or a set of conditions). It is the second innovation, which was essentially the realization that the underlying technology that operated bitcoin could be separated from the currency and used for all kinds of other inter-organizational cooperation. Almost every major financial institution in the world is doing blockchain research at the moment, and nearly 15% of financial institutions are currently using blockchain technology. Second generation blockchain programming language allows users to write more sophisticated smart contracts, thus creating invoices that pay themselves when a shipment arrives or share certificates which automatically send their owners dividends if profits reach a certain level. Blockchain uses are not limited to transactions, they enable plenty of brand new economic opportunities previously unavailable on the world web.