Very likely many of us may be already familiar with the word “Blockhain” but there may be few to whom the word is new and mysterious. So what exactly is the “Blockchain”? It is widely known as a breakthrough technology which has completely altered our understanding of all major industries. No one can deny that in the coming years, irrespective of your being attached to whatever industry, you may experience an encounter with blockchain technology. In this piece we will discuss the blockchain history and learn what is the meaning of Blockchain. In order to look at the blockchain history, the first and foremost is to understand the meaning of “blockchain”.
What Blockchain Means?
The concept of blockchain is quite unique and diverse from the system with which we are familiar with for a very long time. In simple words, it is a distributed database which is stored in various computers simultaneously. This database is continuously increasing due to new database being uploaded in the blockchain system by adding “blocks”. These blocks are the most crucial parts in the blockchain system which consist of two major components – timestamps and the link to the former block.
The linkage between the former and latter blocks then forms a string of network. It may be worth mentioning for the sake of the readers that the database contained in a blockchain is owned or controlled by any particular body and instead everyone, who is part of the network, is able to get the entire set of database for himself. With the inclusion of every new block in the system, it is right away added in the ledger for it to be made available for the entire network.
On the other hand, the old blocks are not deleted from the system but rather they are kept preserved in the system for the entirety. In this way the chances of manipulation are almost none which makes this system invulnerable from any fake transactions, documents as well as fake information. Another very important aspect of the blocks is that each block is encrypted with complex computer programming languages which can only be accessed by authorized personnel only and that too with the use of special cryptographic keys which are available with the authorized personnel who are part of a network.
Similarly, if one wishes to add new data to a certain string in the blockchain system, again he would require the special cryptographic key to do the adding. The blockchain is thus an independent and transparent system equipped with the apparent advantages of being risk free, cost effective, transparency and data security. There is no question that in the near future individuals and companies, while realizing its great potential, will derive benefits from the system.
Now we have understood the definition of “blockchain” from the perspective of layman, let us move forward and discuss blockchain history.
Birth of Blockchain
The concept of “blockchain” was not something new which came into being in the 21st century. It came into lime light much far back as 20th century when a research paper was published under the heading of “New Directions in Cryptography” in the year 1976. The concept of blockchain was very well-understood by the experts of that but it was not implemented considering that the system is too complex and thought to be inapplicable due to lack of technology.
However, in the year 2008, the world witnessed the invention of first ever digital currency called “Bitcoin” which used peer-to-peer technology for carrying out transactions of transfers of payments instantly and these transactions are done through the blockchain system. Since its inception in 2008, Bitcoin today has turned into fastest growing digital asset, the price of which has risen more than 500% till to date. This was the start of a new beginning and soon various other cryptocurrencies made their way into the digital market.
So the next question would be what changes blockchain has introduced which makes it different from the already existing financial system.
Changing the course of history
With the invention of blockchain what happened was that it totally eradicated the need of involving intermediaries (i.e. banks and governments) from the transactions of payments. We all know that if we have to send money or valuables to someone, the first and foremost platform comes in our minds is a bank. Likewise, there are other known sources of sending monies which can be done through internet such as paypal, credit card etc. which too require involvement of banks in terms of bank account details without which the transaction cannot be carried out.
To the contrary, blockchain allows a person to send money directly and that too instantly without any supervision or help from intermediaries in the most transparent and secured manner from any bank. In this way third party charges that are being levied on a transaction can also be avoided. The fact that the transactions are based on digital data that are taking place directly between the parties therefore the element of time consumption is also taken care of with more efficiency.
By realizing the potential of blockchain, its use is not limited only for sending monies but it has expanded to unimaginable heights. Today, many industries are deriving benefits from it by inducting the system for achieving their ultimate goals. For example, at present the use of blockchain in buying and selling real properties is not a myth.
History teaches us a very important lesson that the thing which was rejected in the beginning by being labelled as “complicated” has now become an emerging trend – a phenomenon that has instantly changed our pre-historic perspective and approach towards traditional financial markets. There is no denying the possibility that if we adopt the system for our day-to-day transactions, this will completely disrupt the pre-existing traditional industry and, at the same time, can strengthen it and make a more robust system than ever before.
It is widely believed and rightly so that blockchain will create a new and much improved future which mankind has never imagined before.