The biggest revolution after electricity and internet…
We’ve probably all heard of Bitcoin, Ethereum and other cryptocurrencies recently, but do we really fully understand the underlying and disruptive technology that they rely on? In this article we will talk about the future of trust: Blockchain!
Back to 1982 and a brief history of blockchain
- In his dissertation in 1982, cryptographer David Chaum presented a blockchain-like protocol for the first time.
- Stuart Haber and W. Scott Stornetta described additional work in 1991.
- Haber, Stornetta, and Dave Bayer increased the efficiency of the architecture by including Merkle trees in 1992. Since 1995, their document certificate hashes have been published in The New York Times every week under their company Surety.
Following the global financial crisis of 2008, an unknown person or group of people using the name Satoshi Nakamoto created an unprecedented document: A peer-to-peer electronic cash system. The first conception of decentralized blockchain was based on this innovative and enhanced design. The terms block and chain were used independently in Nakamoto’s original paper until 2016, when they were merged into one phrase, blockchain. And this fueled a complete new era in technology and probably the most significant revolution after electricity and internet...
The technology adoption curve of crypto users vs. total worldwide internet users is depicted in the diagram above. Crypto has a far faster adoption rate than the Internet, with an average annual growth rate of 80%.
What if we try to sum up blockchain in a single sentence?
“Blockchain is a decentralized, distributed, continually updated and immutable ledger that records the history of transactions in a chronological order.”
So what is blockchain and why is it so unique?
Let’s start with the structure of the name:
Block: the file is made up of data blocks + Chain: each block is connected to the previous block, forming a chain.
When a transaction in a block changes, the block's hash changes as well. When the block's hash changes, the next block displays a discrepancy with the previous hash it stored. As a result, blockchain has the distinct characteristics of being tamper-proof.
The blockchain stores data in a huge network of computers known as nodes, each of which has a copy of the blockchain. Every time a new block of transactions is added to the network, all members must check and verify that all transactions in the block are genuine. The new block can only be added to each node's blockchain when it has been approved by all nodes in the network. This process is called consensus.
To summarize, anyone attempting to attack or edit data on a blockchain must change the majority of computers in the network, which is how blockchain functions as a highly secure data storage technology.
To summarize, here are some key points!
- Distributed because it is a massive global spreadsheet that operates on millions of computers.
- Open source because it’s published transparently and it’s not owned by any company, institution or individual.
- Peer-to-peer because it does not require intermediaries to validate or settle transactions, which makes blockchain a viable solution to the problem of insecurity and exploitation by central authorities, platforms and organizations.
Without a question, blockchain technology’s core and unique characteristics may be applied to a variety of industries, creating new potential opportunities for the future.
Here are some examples of real-world blockchain use cases that can be applicable for enterprises, institutions, and governments:
- Payment Systems & Cryptocurrencies
- Cyber Security
- Supply Chain Management
- Advertising Insights
- Networking & IoT Operating Systems
- Private Transportation & Car Sharing
- Online Data Storage
- Charity Ecosystem
- Voting Mechanism
- Secure Sharing of Medical Data
- Music Royalties Tracking
- Retail Industry
- Real Estate Industry
- NFT Marketplaces
In the next articles, we’ll go through in depth how above-mentioned blockchain use cases will reshape the future in numerous industries. Don’t miss it!