A Brief Look at the History of Blockchain
Although blockchain technology was only introduced eight years ago, it has begun to show significant potential for influencing the way that business transactions are conducted around the world. While the technology is still in its early stages, experts believe that it could disrupt every industry, and evidence of the truth behind this idea is already starting to manifest. To understand the possible effects that blockchain could have on the future of business, one must first consider its history.
Blockchain began in response to an escalating degree of public distrust in the supervision and regulation of the finance sector. The effects of the financial crisis of 2007-2008 were far-reaching, and the dependability of trusted third parties was called into question when an inquiry commission determined that the financial crisis was entirely avoidable. In October of 2008, an anonymous person known as Satoshi Nakamoto authored a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” which introduced an alternative method of conducting financial transactions that eliminated the need for trusted third parties such as banks and other financial institutions.
In the paper, Nakamoto outlined the mechanics of the cryptocurrency Bitcoin, which relied on what would later be conceptualized as blockchain technology. The blockchain technology facilitated the sending and receiving of Bitcoin between two parties in a completely secure manner by establishing a permissionless, public ledger—an anonymous record of all transactions conducted that was viewable to anyone on the Bitcoin network. Each Bitcoin transaction could be conducted through and stored within the blockchain, with each “block” of the blockchain connected to the preceding transactions through an unalterable digital signature.
In January 2009, the first “block,” known as “Genesis,” launched, and Nakamoto became the first person to conduct a transaction using blockchain technology. The success of the first transactions conducted within the Genesis block provided crucial proof that blockchain technology was viable, which then spurred further interest in Bitcoin.
While one cannot reference blockchain’s history without mentioning Bitcoin, its future is another matter. The conceptualization of blockchain technology allowed for the creation of other forms of cryptocurrency in the years following the invention of Bitcoin. However, by 2014 technology experts were referring to “blockchain 2.0,” a suggested application for the technology in the form of smart contracts. Experts believed that the same technology that allowed for the exchange of cryptocurrency could be used to conduct other kinds of secure transactions. In this same year, tech professionals founded the first startups focused on the development of blockchain technology and its applications. A year later, in 2015, NASDAQ announced its commitment to using blockchain technology on a trial basis. While some of the fervor over cryptocurrency has ebbed since the development of Bitcoin, the excitement over the technology that allowed it to exist continues to grow. Many technology experts today believe that every industry can and will eventually apply blockchain in some way, which is expected to make for more efficient and secure contracts in the future.
Mikhail Golomb 