Updated: Jun 26, 2019
We are no strangers to technological revolutions becoming ingrained into society, seemingly overnight. The smartphone is one prominent example of this, which has stealthily become an intrinsic part of everyday life. Today, it's very rare that a person does not carry around this device, giving them a constant connection to recorded history and human thought. If you would have proposed this to a person 20 years ago, the notion would've sounded insane. But here we are, unable to imagine living our lives without one by our side.
Today, we have the first application of blockchain technology, Bitcoin. Bitcoin is a form of electronic cash, running on a peer-to-peer network, using blockchain as its ledger.
We have another similar situation in the making, with blockchain technology. Acting as a distributed ledger maintaining a history of records called blocks, blockchain is allowing for decentralized, transparent, and secure solutions to many traditional problems, that were previously hampered in these areas. We are seeing adoption from many large companies, supporting the tech's slow but steady decent into our collective conscious, heading towards mass acceptance and usage. As we approach this horizon, let's briefly review its nearly 30 years of history.
In 1991, an academic paper was released by Stuart Haber and W. Scott Stornetta, entitled 'How to Time-Stamp a Digital Document'. The process outline in the aforementioned paper was a way to cryptographically secure history via timestamped blocks, and would go on to be the driving component in today's blockchain. Another application of this protocol made use of, was the signing of data with private keys, an integral part of the asymmetric nature of blockchain security. The authors were also cited 3 times in the 2008 Bitcoin protocol, giving credence to their technological addition's importance. Needless to say, their contribution to the current state of blockchain technology was essential.
Skipping ahead to 1997, Adam Back proposes a way to combat spam and reduce junk mail, called Hashcash. This algorithm outlined a way to require users to commit a certain amount of 'work' (computing power) before an action could occur. It would normally require negligible computing cost, however on the sending of mass emails, the required computing power would increase to a level that was not economical.
Adam later publishes this idea in a 2002 paper called 'Hashcash – A Denial of Service Counter-Measure', which outlines the proof-of-work algorithm used as a denial-of-service counter measure, and anti-email spam tool. One of the first major applications to use this pattern was Spam Assassin, which allowed for a negation in the mail's spam score if hashcash output was attached. After becoming a tried and true method in CPU cycle payment, this would eventually be used as the proof-of-work function run by Bitcoin miners.
Today, we have the first application of blockchain technology, Bitcoin. Bitcoin is a form of electronic cash, running on a peer-to-peer network, using blockchain as its ledger. Posted online in 2008 by Satoshi Nakamoto, with the genesis block (first block of payments) being processed January 2009, Bitcoin has served to bring blockchain technology to the eyes of the general public. As big as Bitcoin has become, we would expect its creator to be very famous and well-known, but as of today, Satoshi's identity still remains a mystery. With the intention of being a secure and transparent digital currency, the first famous purchase was made in 2010 by Lazlo Hanyecz, when he bought 2 pizzas from Papa John's, for 10,000 BTC.
Blockchain's usage has spread into many sectors of life, and is making its way into industries such as healthcare, finance, and supply chain. The history is an accumulation of years of research and contribution from multiple individuals. The technology would not have become what it has today, without these thought donations to the cause. Now with much more attention and more research capital being put toward it, we are sure to see many more innovations in the blockchain space.
In our next installment of Blockchain 101, we will take a look at the next evolution of blockchain, executable code ran within transactions, AKA smart contracts. This maturation of the technology is allowing a new pathway for innovation, and driving more business usage, paving the way for the next era of blockchain solutions. Stay tuned for our in depth look at this groundbreaking permutation of blockchain technology.
Coming up in the series....Blockchain 101 - Part 2 : Smart Contract Evolution