Dean Kamen said, “Every once in a while, a new technology, an old problem, and a big idea turn into an innovation.” The innovation? Blockchain. Blockchain is a relatively new technology, and it’s turning out to be a fantastic solution to the growing problem of securing our information on the internet.
A Little Background
Blockchain is a decentralized ledger, distributed throughout a network of nodes. In layman’s terms: it is similar to a big spreadsheet, shared by a bunch of different computers on the same network. It’s a chain of blocks, where each block records unique information about the transaction that took place. Anytime someone adds a block to the blockchain, it’s similar to adding a line to the spreadsheet.
In a blockchain, there is no central computer in the network. Each computer carries its own copy of the chain. This ensures the immutability, and security of the chain. If one computer in the network is compromised, the remainder of computers still have the correct copy of the chain. The remaining computers would reject the single, compromised chain since it is different than the majority. The blockchain would remain unchanged. It’s the perfect democracy!
The History of Blockchain
While Blockchain has just begun to make an impact, the idea of blockchain actually was born in 1991, by Stuart Haber and W. Scott Stornetta. They had a vision of sugar plum fairies and a system of documents with unalterable timestamps. In 1992, they added Merkle trees, making the system more efficient by allowing multiple documents to share one block.
Cryptocurrency
Haber and Stornetta’s vision didn’t become a reality until 2008, with the creation of Bitcoin. Created by the mysterious Satoshi Nakamoto, they used the blockchain technology to mine cryptocurrency and execute financial transactions. Nakamoto improved the immutability of the blockchain design by adding “hashing.” Hashing is a unique number or ID calculated from the information that makes up the block.It keeps the names of the people carrying out the transaction, the time, the amount of Bitcoin, the previous block’s hash. It is also used to identify the block. Because a hash key is unique and unrepeatable, it eliminates the need for others to verify the transaction before adding it to the blockchain.
In 2009, Nakamoto released the whitepaper for Bitcoin, and in 2010, the first Bitcoin transaction took place. That being said, Bitcoin didn’t emerge from the tech world to become a household topic until 2017, when the amount of Bitcoin transactions daily taking place reached over 300,000.
On to Bigger, Better Platforms
Other applications of the blockchain technology have since immerged, learning from the failings of Bitcoin. Ethereum was created in 2013 by Vitalik Buterin, who originally worked on Bitcoin. Buterin felt that Bitcoin wasn’t utilizing all the possibilities of blockchain technology, so he created the Ethereum platform. His design incorporated multiple functions, like smart contracts as well as cryptocurrency, into the blockchain. Since its release in 2015, Ethereum has been one of the most widely successful blockchains, because of its community of developers and the diverse operations which it can perform.
What’s in Blockchains’ future?
Blockchain just gained popularity as the next big innovation in technology. Companies are looking to see how they can incorporate the technology into their businesses. Currently, some companies use their own private blockchains to more efficiently transfer data and refine other work processes. In 2015, the Linux Foundation started an Umbrella project called Hyperledger, which is currently researching blockchain to discover and innovate new uses of the technology.
So why should we care about this fancy spreadsheet? With blockchain just getting it’s legs, the possibilities for innovation are endless and we are just seeing the beginnings of a revolution.
Check back here next week for more on Blockchain and how it’s changing how we do business!