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Since the skyrocket of the price of Bitcoin, the technology behind it, Blockchain, has raised people’s awareness. Not only in cryptocurrencies, Blockchain has a great variety of usages, like smart contracts, identities, agreements, property rights, and a host of other things.
Governments and banks have started studying Blockchain and applying it in the real world. Over billions of dollars have been invested in several blockchain companies. In this article, we will deep dive into the process of how Blockchain technology changes the world, and the future development for you.
- The early days of the Blockchain (Since 1991)
- Reusable Proof Of Work (Since the 1990s)
- Bitcoin Network (Since 2009)
- Ethereum (Blockchain 2.0, since 2015)
- The future of Blockchain
The early days of the Blockchain (Since 1991)
The idea of Blockchain technology was first introduced in 1991 by two research scientists, Stuart Haber and W. Scott Stornetta. They introduced a solution to prevent the data and documents being backdated or distorted by creating a time stamp on them.
It is a chain of blocks that contain information. As new data comes in, it is entered into a fresh block. Once the block is filled with data, it is chained onto the previous block, which makes the data chained together in chronological order.
This cryptography solution secures the safety of the data and documents stored on the chain. However, Blockchain technology was not popular and generally used back then. The patent for Blockchain finally lapsed in 2004.
Reusable Proof Of Work (Since the 1990s)
Reusable Proof-of-Work was an invention by Hal Finney. It was a significant step in the history of digital cash and was a precursor of Bitcoin.
In the 1990s, Hal Finney had an idea that the value of digital cash should not be decided by the organization issuing it. The supply of this digital cash is limited in order to make it difficult to create, by defining units of the digital cash in terms of proof-of-work, which is similar to the Bitcoin Network (The supply of Bitcoin is limited at 21 million.)
Bitcoin Network (Since 2009)
In 2008, the financial crash made people lose confidence in the government and banking systems. As the central bank began to print money and inject it into the financial system. It raised people’s awareness of the devaluation of fiat.
At that moment, a person using the pseudonym “Satoshi Nakamoto”, introduced a decentralized peer-to-peer electronic cash system to a cryptography community.
The new system was named “Bitcoin”, which is based on Blockchain technology that allows users to send and receive digital money without any intermediaries. Furthermore, there is no centralized organization like banks and governments managing the accounts, verifying the transaction and controlling the amount of Bitcoin.
Instead, the Bitcoin system is now run by thousands of computers distributed around the world. Transactions are verified by network nodes through cryptography and recorded on the Bitcoin Blockchain. Anyone can participate in this ecosystem by participating in the proof-of-work mechanism to verify the transactions in the network to get Bitcoins as a reward.
On the 3rd of January 2009, the first Bitcoin block was mined by Satoshi Nakamoto and enjoyed a reward of 50 Bitcoins. In 2009, 10,000 Bitcoins were exchanged for two pizzas in a pizza restaurant in Florida. It was the first Bitcoin transaction in the real world.
In February 2021, the price of Bitcoin exceeded over 65,000 USD.
Ethereum (The Blockchain 2.0, since 2015)
In 2013, Vitalik Buterin, a programmer and co-founder of the Bitcoin Magazine, stated that the Bitcoin Blockchain needed an update in order to have a broader application , not only as a financial system.
But he failed to gain agreement in the community. Then Vitalik introduced the Ethereum White Paper which presents the idea of developing a new blockchain-based computing platform. Through the ICO in 2014 and the development, Ethereum was launched on July 30, 2015.
The innovation of Ethereum is the introduction of smart contracts. Smart contracts can be created which are just like the contracts in the real world. They actually are self-managing tiny computer programs inside a Blockchain.
How does a smart contract work? When some criteria is fulfilled, like the passing of an expiration date or the achievement of a particular price goal, the smart contract will manage the agreement itself without interruption and management from any parties.
It is completely different from contracts in the real world that are managed by two separate entities and regulated by a third party. The cost of regulation and discredibility can be avoided with the help of the smart contract.
The cryptocurrency of Ethereum is called Ether (ETH). It is used to pay the fees for the computational power spent on executing smart contracts. ETH can also be transferred between accounts like Bitcoin.
For example, developers are able to create and publish applications that run inside the Ethereum blockchain. These applications are called decentralized applications,D-Apps.The developers have to pay ETH for securing the running of D-Apps.
More than hundreds of DApps are now running on the Ethereum platform, including social media platforms, gambling applications, and financial exchanges.
Bitcoin is a peer-to-peer electronic financial system underlying Blockchain technology, and Ethereum extends the usage of the Blockchain technology from the financial system to smart contracts, agreements and D-Apps.
The future of Blockchain
With the introduction of the Bitcoin network and Ethereum, we saw the development of the financial system and smart contract.They are the most popular functions of Blockchain technology. But, the applications of distributed ledgers and Blockchains are unlimited.
In the future, the third evolutionary stage of Blockchain technology, Blockchain 3.0, will be coming very soon. Blockchain technology has raised the interest of Over billions of dollars have been invested in several blockchain companies and the industry is at a fast growing rate.
In the world of Blockchain 3.0, we will see the greater board of usages of the Blockchain. Major enterprises and authorities may apply the technology in our daily life. For example, how to manage and secure the privacy of the data and sensitive information with the Blockchain technology? We need a simple and effective solution.
More and more industries are actually changed by it, for example:
Food Safety– with the introduction of distributed ledger technology (DLT), all the information including the testing result of the foodstuff product may be recorded on the Blockchain. The records can be traceable and accountable, and they are difficult to be changed by any parties. The transparency of food products and the right to know of customers are secured.
Healthcare– Blockchain technology may optimize the management and storage of patient records. The efficiency of the hospital system has been improved.
Game– with Blockchain technology, Game-Fi becomes more and more popular. It is a decentralized gaming ecosystem that allows users to “play to earn”. Players can make money through transactions, buying assets in the game or investing in the tokens of the game world. It has already been a billion dollar industry.
On Bitget Launchpad, we have already launched several potential Game-Fi tokens projects in 2022. It is a new platform for launching new crypto projects and airdrops. By leveraging the power of Bitget, you may discover more quality projects every month.
But the opportunity is limited. You may usually only have around three days to participate in a project. If the project has potential, it may not be easy to get a seat. Please keep an eye on Bitget Launchpad so that you won’t miss the chance to buy or earn new tokens directly.
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