The Evolution of Blockchain Technology: From Bitcoin to Decentralized Applications
The development of blockchain technology has followed an extraordinary path, going beyond its beginnings as the underlying technology for Bitcoin to create a vast ecosystem of decentralized applications. Blockchain initially emerged as a ground-breaking method for safe and transparent financial transactions, but it has now grown into a potent tool for altering sectors and upending established structures.
Through this article, let’s explore the crucial stages that propelled Blockchain from its cryptocurrency roots to the world of decentralized applications, where innovation knows no bounds and decentralization emerges as a catalyst for unheard-of possibilities.
Everything about Blockchain Technology
Blockchain technology may be coming to the limelight recently, but it has existed for a long time. Let’s look at its journey since its inception.
1991
To establish a valuable method of storing their digital files, scientists Stuart Haber and W. Scott Stornetta developed blockchain technology. They even published a paper on the use of Blockchain to secure blocks.
1992
The scientist didn’t stop there and added Merkel trees to the Blockchain in 1992. Merkel trees assisted in capturing more data in a single block, and hence, it enhanced the model’s efficiency.
2004
RPow, or Reusable Proof of Work, was developed by cryptography expert and computer scientist Hal Finney. He designed this system to create transferable RSA-signed tokens in exchange for non-exchangeable hash cash based on PoW tokens. This design solved the double-spending problem and kept the RSA token’s ownership on the trusted server.
2008
Satoshi Nakamoto released a whitepaper, “Bitcoin: Peer to Peer E-cash System,” where he used a hash cash PoW algorithm along with other software-based functions. Bitcoin started with coin mining concepts while verifying every transaction on the decentralized nodes in the network.
2009
In 2009, the first mined Bitcoin block was rewarded with 50 Bitcoins, and after a few days, the first transaction of 10 Bitcoins happened. By Oct, the Bitcoin exchange was introduced and opened to the public.
2013
By 2013, there were 11 million Bitcoins already traded with a currency value of more than $1 billion. The value of one Bitcoin increased from $250 to $1164.
2014
Vitalik Buterin founded a new blockchain-powered platform, Ethereum, which was more than a cryptocurrency and a decentralized platform. Later that year, and in early 2015, he introduced the concept of smart contracts, which became the most significant application in the Blockchain.
2016
By 2016, blockchain technology was considered more than just a cryptocurrency, and different sectors started to use it for various purposes. For instance, the Bank of England used Blockchain for settling their transactions.
2017
This year, many countries, such as Japan, started to legalize Bitcoin as a currency, and its value reached $20,000 for one Bitcoin.
2018
2018 Bitcoin entered the depression stage, dropping its value to $3800. It also saw a ban from many well-known establishments, such as Facebook.
2019
Bitcoin returned, and people started buying it as an investment, like mutual funds in the stock market. By the year-end, there were more than 450 million blockchain-based transactions.
2020
Ethereum announced its second version and introduced Ethereum 2.0, which resolved the gas issues and other limitations from version 1. This year also saw Blockchain being used with artificial intelligence to create successful systems and models.
2021
This year saw a significant increase in the use of NFT or Non-fungible tokens, which became a fantastic earning opportunity. An NFT is a digital asset such as digital art, music records, videos, or collectibles that is unique and tradable. Artists and traders had a stage thanks to platforms like OpenSea, one of the most well-known NFT marketplaces.
With continual attempts to enhance scalability, privacy, security, and user experience, blockchain technology is still evolving. Projects attempt to combine Blockchain with other cutting-edge technologies, such as AI and the Internet of Things (IoT).
Where can you use Blockchain?
No one industry can benefit from Blockchain. Every industry and sector has seen the significance of using this technology. Below are some industries that have benefited from one or the other aspect of blockchain technology.
• Supply Chain Management
It is one sector that has seen good use of blockchain technology to track their good from one point to another. It helped in ensuring that the goods and products were ethically sourced. It further helped limit the risk of fraud, theft, or counterfeiting, as blockchain technology could easily track and trace everything.
• Identity Management
Identity misuse is becoming a common problem and could lead to fraud. Blockchain technology has proven helpful in identity management and controlling this crisis. It can create a decentralized identity management system to help individuals own and control their digital identity. It can further help secure their individuality and reduce identity theft risk.
Additionally, creating a decentralized system also helps during identity verification and thus eliminating the need for physical document verification.
• Voting System
Elections are crucial to any economy for its growth and development. The voting phase is often considered a fixture, making people less interested. With the help of blockchain-based voting options, the concerned departments can improve the accuracy and transparency of the election process. You can use this system to offer immutable and tamper-proof voting records.
Moreover, with a decentralized system in place, it can also help eliminate the need for people to vote at the designated centers. Instead, they can be allowed to vote remotely at their comfort.
• Healthcare
The Healthcare industry has seen a lot of advantages of using blockchain technology. They are using this technology to store and share medical records securely. Keeping medical records in a centralized platform gives patients and doctors access to the information at all times. Since it is run with the help of advanced technology, it helps to reduce the error percentage and enhance the patient care experience.
Conclusion
The development of blockchain technology, traced from its genesis as the foundation of Bitcoin to its current role in supporting decentralized applications, is a monument to human ingenuity and the unrelenting pursuit of innovation. With each new chapter, Blockchain has evolved from its essential function as a tool for creating digital currencies to a foundation for cooperation, security, and trust.
