[ad_1]
Source: Capgemini
Blockchain technology, in essence, took its first steps in 1991, when two researchers – Stuart Haber and W. Scott Stornetta – introduced a computationally practical solution for timestamped digital documents so that they could not be edited or tampered with.
Source: Ox3production (YouTube)
All of this means that in the beginning, blockchain worked more as a technology to temporarily block information than as a permanent and verifiable decentralized option. That is, it was roughly similar to how smart contracts work today.
Want to know more about smart contracts, then be sure to read the following article on Smart Contracts: A Milestone Innovation from Ethereum.
The system used a cryptographically secure blockchain to store timestamped documents and in 1992 Merkle trees were incorporated into the project.
Merkle trees are data structures divided into different levels whose purpose is to relate each node to a single root associated with them. This way, all network data can be summarized in seconds.
To achieve this, each node must be identified with a unique identifier (hash). These initial nodes, called child nodes (leaves), are then associated with a top node called the parent (branch) node. The parent node will have a unique identifier resulting from the hash of its child nodes. This structure is repeated until it reaches the root node or root of Merkle, whose footprint is associated with all nodes of the tree.
The whole process, called Merkle trees, made the network more efficient by allowing multiple documents to be brought together into one block. However, this technology was not used and the patent expired in 2004, but nevertheless it represented an important step in the evolution of what would have been blockchain technology.
Reusable Proof of Work (RPoW)
It is important to note that even though blockchain technology is used today in several areas of human life, its evolution is intrinsically linked to decentralized finance.
Proof of this is that in 2004, computer scientist and cryptographic activist Hal Finney (Harold Thomas Finney II) introduced a system called RPoW, Reusable Proof Of Work.
The system worked by receiving a non-negotiable or non-fungible proof-of-work token based on Hashcash (an algorithm that was the predecessor of Bitcoin’s Proof of Work and whose main function was to minimize spam mail and denial attacks. -of-service In return, the system created a token signed by RSA or “Rivest, Shamir and Adleman” (a public key cryptographic system developed in 1979), which could then be transferred from one person to another P2P.
The RPoW system has solved double spending (a cyber attack involving multiple uses of the same digital currency). It accomplished this by keeping ownership of registered tokens on a trusted server designed to allow users around the world to accurately verify your digital currencies in real time.
RPoW can be considered as an initial prototype and a crucial initial step in the history of blockchain and decentralized cryptocurrencies in general.
Bitcoin Proof of Work
In late 2008, Satoshi Nakamoto published a white paper on a cryptographic mailing list that introduced a decentralized peer-to-peer electronic cash system (called Bitcoin).
If you want to know who Satoshi Nakamoto is, click on the following link:
Who is Satoshi Nakamoto? 4 closest Satoshi Nakamoto candidates
Based on the Hashcash Proof of Work algorithm, but instead of using a reliable hardware computation function like RPoW, the double protection of Bitcoin spending was provided by a decentralized peer-to-peer protocol for monitoring and verifying transactions; Proof of work.
In short, individual miners “mine” bitcoin for a reward using the Proof of Work mechanism and then verify it via decentralized nodes on the network.
How much money can i earn by mining bitcoins? Find the answer to this question in the following article:
Cryptocurrency Mining vs Buying: Which Offers Better Returns?
On January 3, 2009, Bitcoin was born when the first bitcoin block was mined by Satoshi Nakamoto, who got a bounty of 50 bitcoins. The first Bitcoin recipient was Hal Finney, who received ten bitcoins from Satoshi Nakamoto in what would be the world’s first bitcoin transaction, precisely on January 12, 2009.
Although the blockchain began its first steps in 1991, it was not with the birth of Bitcoin that it would take a definitive form. This was its first special use case, which is a decentralized P2P financial system.
What is the blockchain?
It is a computer operating system through which its database is stored, managed and executed through block structures that contain information (on actions, movements, transactions, contracts, etc.), but which as an aggregate also includes meta-information of the previous blocks .
In this way, each of these blocks is merged into a timeline which makes it possible for the registration and general operation of the entire network to be completely dependent on the chronological compatibility and interoperability between the blocks that make up the network. Here the name blockchain.
Source: Fortune
What are the most successful blockchain projects of 2020? The following article reveals this and more:
10 Best Applications of Blockchain Technology (2020)
Next, it is important to note that all these blocks are stored simultaneously in multiple nodes (computers) distributed in different parts of the world or in a specific location (depending on the computer project). This allows information to be backed up, protected and verified more easily, publicly or by members of a private organization.
One of the main advantages of blockchain technology is that it is very difficult to hack, and this basically because all information and operability (movements, transactions, contracts, etc.) are performed simultaneously on all nodes involved in the network. To hack the system, the attacker must do it on all computers at the same time, which is expensive and almost impossible, according to many computer experts, but never impossible.
It should be noted that just as cryptocurrencies aren’t necessarily decentralized, blockchains aren’t necessarily decentralized either. The decentralization of a blockchain project will depend on the protocol assigned to it. For example, in the case of Bitcoin, the protocol called Proof of Work is responsible for decentralizing the cryptocurrency and the most influential blockchain use case in the world.
Types of blockchains
Public blockchain:
It is that network or operating system with decentralized distribution of nodes. Regardless of its purpose, any citizen of the world can access a simple computer and Internet access. But what’s fascinating is that beyond this (uncensored) access, every person gets involved and responsible for the network.
Each person can control it, specific aspects such as the database, records, movements, contracts and transactions.
Although the network does not show the names of the users who interact with it, there is a code or public key that identifies each person or user.
In the case of using decentralized finance, the best examples of public blockchains are Bitcoin, Ethereum, and Litecoin. However, remember that blockchain can go beyond finance (medicine, agriculture, notary, industrial production, etc.).
Public Reserved Blockchain:
In this case we are also talking about a network or an operating system with decentralized distribution of nodes that can be accessed with a simple computer and access to the Internet from anywhere.
In this regard, it is public, decentralized and uncensored, but it is confidential because both users’ identity data, their activities and transactions are anonymous.
This is why they are often called closed source blockchains. That is, they are for public use, but public audit is not possible.
Examples of public reserved blockchain are Monero, Dash, Zcash and Verge. These three offer absolute anonymity.
Private blockchain:
They are all those networks or operating systems with a centralized distribution of nodes. This means that although the nodes are distributed in different parts of the world, an organization retains absolute control; it can be a private company or a government.
Regardless of the purpose of this type of blockchain, users cannot access this network unless they get a special invitation from a private company, government, or organizational conglomerate.
This type of blockchain makes it clear that not all blockchains are decentralized and that the term decentralized cannot necessarily be associated with the blockchain.
What defines the decentralization of a blockchain network is the protocol. For Bitcoin, it is the Proof of Work protocol. In addition to the protocol, it is also important to highlight the transparency, truthfulness and purpose of the organization (foundation or company) that manages each blockchain project.
Some of the most famous examples of private blockchains are Hyperledger (from the Linux Foundation), R3 (a consortium of international banks to develop private blockchain banking solutions), or Ripple (a protocol to facilitate international money transfers). Or any other centralized blockchain that political organizations have created to support their government cryptocurrencies.
Hybrid blockchain:
It is a combination of the public and private blockchain types mentioned above.
Basically, the nodes that intervene in the network do not have public access. To enter, they must be invited as in the private blockchain type. Once these nodes are invited, they participate in the maintenance and security of the blockchain network, as is the case on the public blockchain network.
On the other hand, the information stored in the hybrid blockchain network is completely in the public domain, which means that it can be viewed and explored even by users who do not intervene in it, which is typical of the public blockchain type.
Some examples of hybrid blockchains are BigchainDB, a blockchain technology provider, or Evernym, a hybrid blockchain that wants to facilitate the management of the Sovereign Digital Identity.
What are the advantages of blockchain in managing digital identity? If you want to know, click here:
Blockchain Application Series: Identity Management
Conclusion
Although the blockchain was born together with the decentralized finance of our time, Bitcoin, it should be remembered that the blockchain is a technology that goes beyond finance.
It is a particular structure and technical arrangement of a cluster of nodes, which in most cases works in a distributed and simultaneous way with different purposes such as: management of an operating system, recording of information, support and shielding of a database, decentralized governance and also centralized governance.
All these with different and multiple purposes related to different sectors of human life, such as medicine, industrial production, notaries, agriculture, public service registers, etc.
Blockchain is a technological phenomenon, a technical IT tool that expands every day in all sectors to solve the human problems of governance and administration.
[ad_2]Source link
