Business Technology

Blockchain Technology History: Ultimate Guide

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Written by Quentin Hack

Today, many large financial institutions are actively investing in blockchain-based projects. It is noteworthy that the term is a recent phenomenon. And few people in the world know the inventor of blockchain and what blockchain technology is. Let’s talk about the history of this new technology and how it works.

What is a distributed database?

Blockchain is a distributed database that is stored on hundreds or thousands of computers around the world. It combines many blocks. Each represents a specific type of information about transactions made by network participants.

All blocks form a single and indivisible chain that makes up the specified database. This database is available to every member of the network.

In simple terms, blockchain is a kind of electronic book, the information from which is available to anyone, but only one user can work with it.

History of the Blockchain

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The creator of the blockchain is considered to be a Japanese programmer Satoshi Nakamoto. However, this statement is not entirely correct. Talking about blockchain and its history, we should note that Nakamoto was first mentioned when he introduced the first cryptocurrency, Bitcoin.

At the same time, the technology itself appeared in 2007. Bitcoin went online two years later – on January 3, 2009. By this time, Nakamoto had implemented the protocol under which this cryptocurrency works.

He used the solutions developed a decade earlier:

  • the idea of decentralizing currencies;
  • the idea of creating a chain of blocks that are independent of each other;
  • a mechanism for proving completed transactions.

The creator of bitcoin only combined these ideas into one technology.

Evolution of Blockchain

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After the first cryptocurrency appeared, the development of the blockchain continued. In 2013, the network started talking about a new solution, invented by Vitaly Buterin. A 21-year-old programmer from Russia has proposed a new decentralized software platform based on the blockchain. This solution is called Ethereum.

This platform allows anyone to create new blockchain services or blockchain mobile apps using their computer. Ethereum, although it is a cryptocurrency, provides many opportunities for people. Spheres of life to implement the platform:

  • creating financial contracts;
  • implementation of crowdfunding and investment projects;
  • insurance activities and so on.

The only condition necessary for the implementation of the Ethereum platform, or so-called smart contracts, is the ability to describe operations in mathematical language.

One year after the origin of the idea, Buterin was able to attract the first investors willing to invest their own money in the development of new projects. The new platform was finally completed in mid-2015.

The emergence of Ethereum was another revolutionary idea in the digital world. In fact, earlier participants had to create a new operating system before releasing a mobile application. Now they are spared such tasks.

Moreover, without Ethereum, it took millions of dollars to promote new projects. Today, thanks to smart contracts, users can raise the necessary investments by issuing special securities (tokens). In fact, this procedure is analogous to an IPO in the digital world.

At the moment, the development of Ethereum technology also continues. Dozens of new cryptocurrencies have already been created and hundreds of services and applications have been launched based on this platform.

What is the reliability and longevity of blockchain?

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Blockchain significantly reduces the likelihood of theft of users’ funds from online wallets. This fact contributed to the appearance of the best crypto hardware wallets. The following circumstances make the technology attractive:

  1. The absence of a single server for storing information. This ensures high network security. No participant can make changes to the block chain without the consent of the other users.
  2. The presence of a close connection between the blocks, each of which has a special code, or link. This decision also eliminates the possibility of unauthorized changes to the information.
  3. One of the most reliable cryptographic encryption methods protects transactions. Only the presence of a special key allows access to the information.
  4. Anyone can track information about completed transactions. In this case, for example, to transfer funds from a wallet, you must have a special cryptographic key. Only one person owns it. To open access to the wallet and make transactions inside the system, it is enough to use the key.

Velvetech and others believe that blockchain is the future. Society believes that technology can solve many of the problems facing the global financial market, trade, and other areas of human activity. However, it is impossible to say for sure how durable the blockchain is.

Benefits of Blockchain for business

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It is possible to use blockchain technology in various fields. Thanks to transparency, blockchain increases the level of trust between, for example, buyers of goods and sellers. It is impossible to violate agreements based on smart contracts. Moreover, no information is lost during transactions.

After the appearance of the Ethereum platform, large banks showed interest in it. Based on the blockchain, they created new types of bonds and other securities.

Blockchain opens many opportunities for businesses. In particular, it is possible to apply such technologies for:

  • trading in precious metals and gemstones;
  • identification of users in banking and other areas;
  • data management within large holdings;
  • electronic voting, polls;
  • real estate management, and so on.

Despite the wide opportunities that the blockchain opens up, this technology is still actively used for the development of new cryptocurrencies.

In conclusion

Blockchain is a real technology of the future, based on which we will soon see new creations of developers. We can only hope that the digital platform will provide functionality not only for businesses, but also significantly improve the life of every ordinary person familiar with the Internet.

About the author

Quentin Hack

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