The History of Blockchain Explained

History of Blockchain The underlying technology behind cryptocurrencies
is the blockchain. It allows every client in the network to reach
consensus without ever having to trust each other. The idea behind blockchain technology was
described as early as 1991 when research scientists Stuart Haber and W. Scott Stornetta introduced
a computationally practical solution for time-stamping digital documents so that they could not be
backdated or tampered with. The system used a cryptographically secured
chain of blocks to store the time-stamped documents and in 1992 Merkle trees were incorporated
to the design, making it more efficient by allowing several documents to be collected
into one block. However, this technology went unused and the
patent lapsed in 2004, four years before the inception of Bitcoin. In 2004, computer scientist and cryptographic
activist Hal Finney (Harold Thomas Finney II) introduced a system called RPoW, Reusable
Proof Of Work. The system worked by receiving a non-exchangeable
or a non-fungible Hashcash based proof of work token and in return created an RSA-signed
token that could then be transferred from person to person. RPoW solved the double spending problem by
keeping the ownership of tokens registered on a trusted server that was designed to allow
users throughout the world to verify its correctness and integrity in real time. RPoW can be considered as an early prototype
and a significant early step in the history of cryptocurrencies. In late 2008 a white paper introducing a decentralized
peer-to-peer electronic cash system – called Bitcoin – was posted to a cryptography mailing
list by a person or group using the pseudonym Satoshi Nakamoto. Based on the Hashcash proof of work algorithm,
but rather than using a hardware trusted computing function like the RPoW, the double spending
protection in Bitcoin was provided by a decentralized peer-to-peer protocol for tracking and verifying
the transactions. In short, Bitcoins are “mined” for a reward
using the proof-of-work mechanism by individual miners and then verified by the decentralized
nodes in the network. On the 3rd of January 2009, Bitcoin came to
existence when the first bitcoin block was mined by Satoshi Nakamoto, which had a reward
of 50 bitcoins. The first recipient of Bitcoin was Hal Finney,
he received 10 bitcoins from Satoshi Nakamoto in the world’s first bitcoin transaction on
12 January 2009. In 2013, Vitalik Buterin, a programmer and
a co-founder of the Bitcoin Magazine stated that Bitcoin needed a scripting language for
building decentralized applications. Failing to gain agreement in the community,
Vitalik started the development of a new blockchain-based distributed computing platform, Ethereum,
that featured a scripting functionality, called smart contracts. Smart contracts are programs or scripts that
are deployed and executed on the Ethereum blockchain, they can be used for example to
make a transaction if certain conditions are met. Smart contracts are written in specific programming
languages and compiled into bytecode, which a decentralized Turing-complete virtual machine,
called the Ethereum virtual machine (EVM) can then read and execute. Developers are also able to create and publish
applications that run inside Ethereum blockchain. These applications are usually referred to
as DApps (decentralized applications) and there are already hundreds of DApps running
in the Ethereum blockchain, including social media platforms, gambling applications, and
financial exchanges. The cryptocurrency of Ethereum is called Ether,
it can be transferred between accounts and is used to pay the fees for the computational
power used when executing smart contracts. Today blockchain technology is gaining a lot
of mainstream attention and is already used in a variety of applications, not limited
to cryptocurrencies. For more information about blockchain and
other interesting topics, don’t forget to watch our other videos on Binance Academy.

5 thoughts on “The History of Blockchain Explained”

  1. Wow that was a very succinct but detailed explanation of the blockchain history. How about a history about cryptocurrency is there an available one? By the way I plan to make Translation of this video to may home country would it be possible to re-use the video?

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