History of Blockchain 

The underlying technology behind cryptocurrencies is blockchain. Blockchain allows all users on the network to reach consensus without having to trust each other.

 

early days

The idea behind blockchain technology was described in 1991 by scientists Stuart Haber and W. Scott Stornetta as a computationally useful solution that time-stamps digital documents so they cannot be tampered with or retroactively altered.

The system used a secure encrypted blockchain to store time-stamped documents, and with the inclusion of Merkle trees in the design in 1992, several documents were collected into a block, making the system more efficient. However, this technology remained unused and the patent expired in 2004, four years before Bitcoin's inception.

 

Reusable Proof of Work

In 2004, computer scientist and cryptography activist Hal Finney (Harold Thomas Finney II) introduced a system called RPoW, a reusable proof of work; This system started by taking an immutable and unique Hashcash-based proof of work token and in turn creating an RSA signed token that can be transferred from person to person.

Reusable Proof of Work (RPoW) has solved the problem of double spending by keeping ownership of tokens on a trusted server designed to allow users around the world to check the accuracy and integrity of data in real time.

We can consider Reusable Proof of Work (RPoW) as an early prototype and an important initial step in the history of cryptocurrency.

 

Bitcoin Network

In late 2008, a whitepaper introducing a decentralized peer-to-peer electronic monetary system called Bitcoin was posted to a cryptography mailing list by an individual or group using the name Satoshi Nakamoto.

Double-spend protection in Bitcoin is based on the Hashcash proof-of-work algorithm, but instead of using hardware-based computational functionality such as Reusable Proof-of-Work (RPoW), double-spend protection in Bitcoin is provided by a distributed peer-to-peer protocol that tracks and verifies transactions. In short, Bitcoins are “mined” for rewards by individual miners using a proof-of-work mechanism and then verified by decentralized computers on the network. 

On January 3, 2009, when Bitcoin's first bitcoin block was revealed by Satoshi Nakamoto, it earned him 50 bitcoins. Hal Finney, the first buyer of Bitcoin, received 10 bitcoins from Satoshi Nakamoto in the world's first bitcoin transaction on January 12, 2009.

 

Ethereum

In 2013, Vitalik Buterin, a programmer and one of the founders of Bitcoin Magazine, stated that Bitcoin needed a scripting language to be able to create decentralized applications. Unable to reach agreement within the community, Vitalik began developing Ethereum, a new distributed-based blockchain computing platform that features coding functionality called smart contracts.

Smart contracts are programs or scripts that are placed and run on the Ethereum blockchain, and can be used to execute a transaction when certain conditions are met, for example. Smart contracts are written in specific programming languages ​​and compiled into bytecode that can be read and executed by a decentralized Turing-complete virtual machine called the Ethereum Virtual Machine (EVM).

Developers can also create and publish applications that run inside the Ethereum blockchain. These applications are often called decentralized applications (DApps), and there are currently hundreds of decentralized applications  (DApps) running on the Ethereum blockchain, including  social media platforms, gambling apps, and financial apps. 

Ethereum's cryptocurrency is called Ether, Ether can be sent between accounts and is also used to pay fees for the computing power used when executing smart contracts.

 

Summary 

Today, blockchain technology is attracting a lot of mainstream attention and is used in a variety of applications, not just limited to cryptocurrencies. To learn more about Blockchain and other interesting topics, be sure to watch our other videos on Binance Academy.