Created on August 28, 2018 1:37 pm
We can’t discuss the history of Blockchain technology without first starting with a discussion about Bitcoin. The release of whitepaper Bitcoin: A Peer to Peer Electronic Cash System in 2008 described a “purely peer-to-peer version of electronic cash” known as Bitcoin, Blockchain technology made its public entrance. The Blockchain is an undeniably ingenious invention – the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto.
Bitcoin is the first decentralized digital currency. Bitcoin are digital coins you can send through the internet. Compared to other alternatives, Bitcoins have a number of advantages. Bitcoins are transferred directly from person to person via the net without going through a bank or a clearing house. This means that the fees are much lower, you can use them in every country, your account cannot be frozen and there are not prerequisites or arbitrary limits.
Let’s look at how Bitcoin works. Several currency exchanges exist where you can purchase anything with Bitcoin. The Bitcoin network is secured by individuals called miners. Miners are rewarded newly generated for verifying transactions. After transaction are verified they are recorded in a transparent public ledge. Bitcoin opens up a whole new platform for innovation. The software is completely open source and anyone can review the code. Bitcoin is changing finance the same way the web changed publishing. When everyone has to a global market, great ideas flourish! Bitcoin are a great way for businesses to minimize transaction fees. It doesn’t cost anything to start accepting them and it’s easy to setup. There are no chargebacks and you’ll get additional businesses from the bitcoin economy.
Blockchain, the technology that runs Bitcoin, has developed over the last decade into one of today’s biggest ground-breaking technologies with potential to impact every industry from financial to manufacturing to educational institutions.
Today, many of us believe Bitcoin and blockchain are one and the same, but the fact is they are not. In 2014 we realize that blockchain could be used for more than cryptocurrency and started to invest in and explore how blockchain technology could alter many different kinds of operations. Fundamentally, blockchain is an open, decentralized ledger that records transactions between two parties in a permanent way without needing third-party authentication. This creates an extremely efficient process and one people predict will dramatically reduce the cost of transactions.
When capitalists mined the power of blockchain, there was a huge investment to see how blockchain could influence various industries which such as supply chains, healthcare, insurance, transportation, voting, contract management and more.
In 2013, Vitalik Buterin, co-founder of Ethereum and Bitcoin magazine, was also an initial contributor to the Bitcoin codebase, took some measures to overcome the programming limitations and pushed for a malleable blockchain. Buterin build the second public blockchain called Ethereum. Ethereum had the option to record other assets such as loans or contracts, not just currency when compared to Bitcoin. Ethereum launched in 2015 and can be used to build “smart contracts”, that can automatically process based on a set of criteria established in the Ethereum blockchain. The Ethereum technology has grabbed the attention of big corporations such as Microsoft, BBVA and UBS who are attracted by the power of the smart contract functionality to save cost and time.
The newer technologies obviously boast about the ability to improve on capabilities of Bitcoin and Ethereum networks while overcoming their limitations witnessed. We should see them deliver on their vision and differentiated ability least with regards to transaction time and scale in 2018.
Today, Bitcoin is just one of the several hundred applications that use blockchain technology. It’s been an impressive decade of transformation for blockchain technology and it will be intriguing to see where the next decade takes us.
The history of blockchain technology reveals how a cryptocurrency gave rise to enterprise solutions, and why it is seen as such a disruptive force.
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