The first blockchain application was started by Satoshi Nakamoto on January 3, 2009 with the creation of the first block of the chain. While we do not know the actual identity of Nakamoto, we do know the blockchain application known as Bitcoin. Bitcoin is credited with being the very first blockchain. This chain is still going strong and is the most common example of a blockchain.
But what is the origin of blockchain technology?
First Work on Blockchain
Two Bellcore Researchers, Stuart Haber and W. Scott Stornetta, started work on the first cryptographically secured chain (this concept became known as blockchain only a few years ago). They wanted to create a system that would create timestamps for documents that could not be tampered with. This is the basis of the decentralized blockchain.
What is Blockchain?
According to IBM, blockchain technology is “a shared, immutable ledger for recording transactions, tracking assets and building trust”. By storing information in a peer-to-peer network, blockchains are decentralized. This decentralization prevents many attacks that could arise from a centralized network. For example, it attempts to mitigate double-spending, mutilating previous blocks, malicious client code, among others. This process also provides a public ledger of all blocks and everything included in them, allowing transparency while protecting a user’s identity behind a public key.
Blocks in a blockchain hold information on the chain. For Bitcoin, the block holds a version descriptor, the previous block’s unique hash, the transaction details, the current time, and a target value. This complete block is then hashed with an arbitrary number, finishing with a hash that is lower than the target value and thus is added to the chain and verified by the nodes on the network.
Satoshi Nakamoto’s Chain
Satoshi Nakamoto released the first Bitcoin whitepaper on October 31, 2008. In it, he envisioned a “purely peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution”. He proposed a system that has become Bitcoin, and it took off from there.
Bitcoin led to many cryptocurrencies, but not all cryptocurrencies are about money; some have built applications into the chain such as Ethereum building smart contracts. These contracts are simply code that runs on the Ethereum chain and can be used to create DApps, which can include games, digital collectables, online voting, and many others.
The applications of blockchain technology are expanding. When blockchains first started with Bitcoin, the technology was not taken seriously. Now that the technology has been vetted and verified, companies have started using blockchains for uses other than cryptocurrencies. We now have decentralized online file sharing applications from this technology, for instance, which provide numerous backups of files that are inaccessible without your private key.
About the Author
Gregory Manley is a freshman at Colorado School of Mines where he is majoring in Computer Science and Computer Engineering. He is currently the owner of iTech News and a contributor for Section’s Engineering Education Content Program. His management of iTech News has led him to work with many brands on writing technology focus articles.