Blockchain - A Brief Overview
According to Moore's Law, the evolution of information and technology is steadily growing year after year, reaching levels unheard of compared to just five years ago. This is especially true for information technology, where each new generation would see it improve again and again to even greater heights.
Society would see an increasing number of applications for this new technology. And one of the more groundbreaking results of such technological advantage is the introduction of Blockchain.
How it all started?
Blockchain may seem like a relatively new system at first that has made a lot of headlines in the public eye in recent years. But in fact, the history of blockchain dates back in 1991. It all began when Scott Stornetta and Stuart Haber worked on a cryptographically secure chain of blocks. The goal of these experiments was to create something that cannot be tampered with.
For more than a decade, experiments and improvements would continue until the late 2000s when blockchain would gain worldwide attention thanks to one Satoshi Nakamoto and his Bitcoin. He developed the first blockchain in 2008 and has found its way into several applications beyond cryptocurrencies. But since he left the scene and handed over Bitcoin development to other developers, blockchain technology has continuously evolved.
What is Blockchain?
Let's start where it all begins - the currency itself. Cryptocurrency, at its core, is a form of digital currency that is operated independently, decentralized. They cannot be earned normally through physical means, as they are "mined" and traded over the internet. Now imagine when making any purchase using physical money, the purchase is then recorded onto a ledger. Now when transactions are made using bitcoin, the data is saved into what is called a "block."
Blocks are "records" of the valid transactions, which are very secure and rather difficult to access. With more and more blocks created, they then start linking, forming a chain. And this is the basis of the "blockchain." The security of blockchains allows participants to view and audit past transactions relatively easy and without disrupting the prior blocks.
Satoshis’s invention of Bitcoin has paved the way to be the pioneer application for Blockchain. Most people have a misconception about Bitcoin and Blockchain thinking they are the same. But if you come to know the difference, they are actually not. Blockchain is the underlying technology that powers most applications such as Bitcoin. While Bitcoin is a digital currency created to speed up the cross-border transactions and simplifying the whole process without a third-party, Blockchain is Bitcoin’s ledger that takes care of all the transaction.
But there are some developers who felt the limitations of Bitcoin when it comes to leveraging the full capabilities of blockchain technology. Ethereum was then developed as a new blockchain application in 2013. It has added features enabling a function that allows people to record other assets. This turned out to be a pivotal moment in Blockchain history as it has expended its functionalities from not just being a digital currency but also a platform for developing decentralized applications. And it doesn’t stop there. More and more innovations have cropped up all leveraging blockchain technology capabilities.
But what makes the blockchain such an increasingly accepted system for the information age?
Simple, online banks find it much easier to keep data of the trading and transactions safe and secure in blockchains. Add to the anonymity of purchasing goods and services with bitcoin, it adds to the layer of security for blockchain. While first world countries such as Australia and the US are adopting blockchains and cryptocurrency, other countries like Latin America are looking to invest in them in order to better secure their financial foundation.
While the bitcoins and blockchains may not be perfect as evidenced by the bitcoin stock market crash of 2018, cryptocurrency has maintained a slow and steady rise in the months that followed. Like any other new piece of technology or system, there's always ups and downs, small improvements and big mistakes, and eventually, blockchain will be an everyday feature in the next couple of decades.