Blockchain technology has become one of the fastest growing technological aspects in the world. The day for blockchain technology’s global domination is not far either. From applications in the financial sector (cryptocurrency and decentralized finance) to being implemented in the education sector, there are multiple use cases of blockchain technology. But have you ever stopped and thought when did it all begin?
You might think that the initiation of blockchain was in 2008 with the introduction of Bitcoin; however, that’s not true. The history of blockchain technology dates back to 1991 and has kept progressing since then. This distributed ledger technology was thought of being useful only in the economic domain, but now has found applications in logistics, education, artificial intelligence and much more. Let’s have a deeper look into the history of blockchain technology and understand how it has evolved over the years.
Initial Years of Blockchain Technology
Away from the knowledge of a lot of people, the concept of blockchain technology was proposed in 1991. The research scientists Stuart Haber and W. Scott Stornetta thought of building a more secure way to timestamp digital documents. They worked upon creating a cryptographically secure chain of blocks that could store the timestamps.
It was in the year 1992 that these two scientists also added the concept of merkle trees to the blockchain. 1993 was the year that proof of work consensus mechanism was built to protect the blockchains from hackers and spam. The blockchain technology kept being dormant in these initial years. In 2004, Hal Finney, a cryptography expert, developed reusable proof of work (RPoW) which allowed keeping a RSA signed token in exchange for hash cash. This solved the problem of double expenditure.
The Cryptocurrency Revolution
It was in 2008 that the world got to know a lot more about blockchain technology. Satoshi Nakamoto, a man about whom not a lot is known, introduced the first cryptocurrency, Bitcoin, to the world. Using the hash cash mechanism, he introduced Bitcoin as a peer to peer E-cash system. Unlike the RPoW mechanism, he introduced a mining mechanism for adding blocks to the Bitcoin blockchain and introducing more coins into the system.
So Bitcoin was a reward based cryptocurrency that rewarded the miners for successfully verifying the transactions and adding them to the block. In January 2009, the first Bitcoin block was mined and Satoshi was rewarded 50 BTC. Growing up since then, in 2012, one BTC shot up to $250 which was a very large jump for any asset in this little time. Satoshi understood the importance of giving an upper limit to the coins in circulation, so he capped the mining capacity at 21 million BTC. Out of these, over 18 million have already been mined and put into circulation.
Blockchain Technology: The Technology of the Future
Since 2013, the blockchain technology started to gain much more credibility than it did in the last 20 years. That year, BTC touched the market price of over $1100, and 11 million Bitcoin were traded to achieve a valuation of over $1 Billion. Moreover, this was the year that China and Thailand banned BTC. It was also the year that Ethereum was introduced as a concept by Vitalik Buterin. It was developed as a need for a new scripting language to develop decentralized applications which turned out to be another leap for the blockchain technology.
In 2014, the Ethereum foundation was registered and ETH became a decentralized platform rather than just being a cryptocurrency. In 2015, ETH also introduced smart contracts over the platform which paved the path for dApps and smart agreements in the blockchain market. Linux foundation also introduced Hyperledger, which is an open source project for promoting decentralized applications with that required framework and various tools. By the year 2018, a lot of economies had already started recognising blockchain technology. But it was mostly due to the financial performance of cryptocurrency and multiple crypto exchanges. There were lots of new cryptocurrency projects coming up and the technology for the future was starting to take control.
The Global Acceptance
It was in 2019 that the blockchain technology started to touch every mind globally. BTC had already crossed the price of $20,000 in 2017 while falling back to $3800 in 2018. Facebook showed interest in blockchain space while Amazon had already announced Amazon blockchain service on their cloud platform. The same year, China too launched their own blockchain based cryptocurrency.
2020 and 2021 turned out to be the best years in the history of blockchain technology. In 2020, the BTC price soared to over $30,000 while the NFT domain started gaining significance as well. People were now talking about decentralized apps and games. Decentraland like games which rewarded NFTs to the gamers had started gaining credibility in public. Celebrities like Justin Bieber, Snoop Dogg, Rihanna, and many more, sold their own digital NFT collections raising more awareness about other sides of the blockchain technology.
In 2021, BTC even touched an all time high of $65,000. During this bull run, implementation of blockchain in artificial intelligence, logistics and education sector was also announced by a lot of companies. Facebook even changed its name to Meta and put forward their aim to develop a metaverse that would be powered by the blockchain technology in multiple senses.
In 2022, metaverse has gained a lot of credibility and big brands like Adidas, Gucci, Walmart, Ferrari, and many more have already entered the metaverse. The use cases of blockchain in industries like education sector, healthcare, real estate and many more are being explored. The future for blockchain technology does indeed seem to be very bright.