History of BlockchainIf you have dealt with Bitcoin or any other cryptocurrency in any aspect, you might have heard the term blockchain. In simple words, blockchain is the record maintaining tech behind cryptocurrencies.
What is Blockchain?Blockchains are databases that store information. It is very different from a typical database system. New data entered in the blockchain forms a new block and is chained to the previous block in chronological order. This makes the details of your transactions secure. Primarily a blockchain stores transaction ledger data, however various types of data can be stored in blockchains. There is no single person, entity, or corporation controlling blockchains. All users are collectively the controllers of blockchain. This system is decentralized, and the data entered cannot be tampered with, deleted, or reversed. All cryptocurrency transactions are permanently recorded and are available for everyone’s scrutiny.
What is a Database?To fully understand blockchain, you will have to understand the concept of a database first. Typically, a database collects electronic information stored on a computer system in a structured table format. This table permits quick and easy filtering and searching of particular information.
What is the Difference Between a Spreadsheet and a Database?There is a considerable difference between a spreadsheet and blockchain for information storing and database. Spreadsheets can be used by individuals or small groups of people to store limited information. At the same time, a database can house vast amounts of data, which can be accessed conveniently by a large number of users. Large databases use powerful computers as servers to house information. These servers are constructed by using thousands of computers for increased storage, capacity, and computational power so that innumerable users can access them simultaneously.
How is a Blockchain different from a database?The primary difference between a blockchain and a database is that structure. A blockchain assembles data in groups known as blocks. These blocks are limited up to a specific capacity for holding information. When these bocks get filled, they are chained to a previously filled block, forming a blockchain. It is essential to understand that all blockchains are databases, but all databases are no blockchains. A database is designed to store data in tables, whereas a blockchain is designed to store data in blocks, which are chained together. When blocks are tethered to the previous blocks with a chain, they are given a timestamp and become part of the timeline. They can neither be reversed nor unchained, and they are similar to being permanently set in stone
How Secure is a Blockchain?The blockchain mechanism makes it completely safe and secure. Due to the storage of blocks in chronological and linear order, new blocks are continually added to the rear end of the chain. Each block has a ‘height’ in the blockchain, which is its position. The height of the Bitcoin blockchain reached 656,197 blocks by November 2020. Unless the majority reaches a consensus, blockchain contents cannot be altered. As there is a hash code with each block and a timestamp, these hashcodes are converted into digital data by the computer’s math function. Any altering in the digital data changes the hash code, and it is instantly identified as a scam and illegal. Unless 51% of the blockchain hashcode blocks are altered, which is almost impossible and would require a lot of money, time, and resources as they would have to redo all the timestamps and hash codes. Also, such an extensive alteration will surely be noticed by network members, and they would fork off a new version of the blockchain instantly.
History of BlockchainBlockchains are the 21st century’s most innovative inventions. The history of blockchains started from the early 1990s when Stuart Haber and W Scott described a secure cryptographical chain of blocks. Since then, blockchains grew in popularity, and their recent surge has increased their impact on the digital economy. The evolution of Bitcoin and blockchains came into being as the realization that cryptocurrencies could operate independently without being influenced by a centralized authority. This led to the situation that almost all major banks are researching blockchains and using them in some capacity. Cryptocurrency and blockchains have affected various sectors from manufacturing to finance and education. A detailed history of blockchain technology is mentioned below:
Timeline Infographics of Blockchain TechnologyBlockchain history is best understood through a timeline infographic. This timeline states an unmistakable evolution and stages through which blockchains grew and became what they are today.
Early Years of Timeline Infographics, 1991 to 2008Blockchains emerged when Scott Stornetta and Stuart Haber worked on a chain of blocks with timestamps that were secure so that no one could alter them. In 1992, the founders upgraded their envisioned blockchain to incorporate Merkle trees to enable more documentation on a single block, thereby enhancing its efficiency. In 2008, the first blockchain technology found its way beyond cryptocurrencies and into various applications. The blockchains started to gain relevance with the work of Satoshi Nakamoto, who designed the first application relevant to digital ledger technology. Satoshi is considered the mastermind behind blockchain technology. He conceptualized decentralization, where no one could gain control and digital trust could be enhanced through the evolution of digital technology. Since the overtaking of Bitcoin by other core developers, there has been an evolution in digital ledger technology, which forms blockchain history due to new applications.
Structure of BlockchainIn simple words, blockchain structure is a transaction record across thousands of computers and a secure peer distributed ledger running on top of the internet. Updating the ledger contents is possible only by adding another block chained to the previous block. In business terms, people can carry out all sorts of transactions without the need of an arbitrator. The transparency of the database and its access to all users makes it secure
Phase 1 of Blockchain Evolution, 2008 to 2013Many people are confused that Bitcoin and blockchain are the same things. In reality, blockchain is an underlying technology that is powering many applications, while Bitcoin is a cryptocurrency. Bitcoin was introduced in 2008. It was known as the first blockchain peer-to-peer system application. The genesis block was formed by Satoshi Nakamoto, from which other blocks were mined. Blocks were interlinked and chained, and they acted as evidence of transactions and information. Since the success of Bitcoin, many other applications seeking leverage from blockchain technology cropped up. Therefore, the evolution of blockchains credits a long list of newly invented applications. The digital transformation led to many corporations joining the revolution and expanding the family of blockchain.
Phase 2 of Blockchain Evolution, 2013 to 2015Vitalik Buterin felt that Bitcoin capabilities need to be expanded. To leverage the capabilities of the entire blockchain, he became the first contributor to the Bitcoin Database. Buterin wanted to invent a malleable blockchain capable of performing other functions and overcoming the limitations of Bitcoin. In 2013, Ethereum was born, and it included many functionalities Bitcoin lacked. This public blockchain proved to be a crucial turning point in the history of blockchains. Ethereum was launched in 2015, and it gave the blockchain the ability to support smart contracts, which could perform various functions. The additional Ethereum feature included permission to record people’s assets, such as contracts. It turned Ethereum from a cryptocurrency to a decentralized application platform. The maximum number of daily transactions started processing in Ethereum blockchains. This expansion was due to its ability to support decentralized applications and smart contracts. Also, its market value significantly improved.
Phase 3 of Blockchain Evolution, 2015 to 2017The Linux Foundation initiated an open-source blockchain technology project known as Hyperledger. This Hyperledger contributed to the collaborative development of all distributed ledgers to date. It focuses on encouragement in blockchains and performance enhancement of current systems for supporting business tractions globally. In 2017, EOS came into existence, the brainchild of a private company known as block one. The EOS emulates real computer attributes alongside GPU and CPU, unlike other blockchain protocols. This intelligent contract platform eliminates the fee of transactions besides conduction millions of transactions every second. The EOS is based on the 2017 publication of White Paper. Block.one distributed one billion ERC-20 tokens to ensure its widespread distribution. This enabled the launching of the EOS blockchain by all users on the release of the software. The primary purpose of EOS is the decentralized application’s deployment through a corporation that is autonomous and decentralized.
Phase 4 of Blockchain Evolution, 2018 onwardsBefore we jump into the details, check this chart to know the capital funding in blockchain start-up companies from 2016 to 2021
Source: statista.comRecently, many new projects have started after the evolution of Bitcoin and Ethereum. These projects leverage the capabilities of blockchain technology. New projects have come up with new features which address Bitcoin and Ethereum limitations. The new blockchain applications contain NEO, which is an innovative contract platform. A team of developers known as Antshares in China developed it. The features of NEO included digitizing assets using a standard programming language. It is the first decentralized blockchain platform in China even after the cryptocurrency ban by the Chinese Government. NEO has the support of Alibaba CEO and is an active currency of blockchain innovations. Similarly, the IOTA was developed to optimize cryptocurrency platforms by providing zero transaction fees and a unique verification system. The scalability issues of Bitcoin are also addressed through this blockchain process. Moreover, other second-generation blockchain applications besides IOTA and NEO also manage ripple effects in many sectors. Many privacy Altcoins offer security and high privacy levels of transactions. In addition, they also address the scalability issues of the earlier blockchain platforms. The history, as mentioned above, of blockchains includes public networks that are accessible to all users. The technological evolution had led to companies adopting blockchains internally for the enhancement of efficiency in operations. Corporations are seeking to gain the upper hand in blockchain technology through investment in research and hiring. Companies like Microsoft lead the exploration of private, federated, and hybrid blockchain technologies.