Blockchain and things to know about it

4 min readMay 5, 2022

Definition

A blockchain is a distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin, for maintaining a secure and decentralized record of transactions.

Blockchain’s history

Blockchain is more than just a database, it’s a new “digital trust” technology stack that revolutionizes the way value and information are exchanged over the Internet by removing “gatekeepers” from processes. Read the article for complete and detailed details: A brief history of blockchain technology

The history of blockchain goes back beyond imagination, but is summarized by answering important questions:

Who invented blockchain?

The first blockchain-like protocol was proposed by cryptographer David Chaum in 1982. Later in 1991, Stuart Haber and W. Scott Stornetta wrote about their work on Consortiums.

But it was Satoshi Nakamoto (presumed pseudonym for a person or group of people) who invented and implemented the first blockchain network after deploying the world’s first digital currency, Bitcoin.

Bitcoin — The first crypto

Nakamoto stated that work on the writing of the code for bitcoin began in 2007. On 18 August 2008, he or a colleague registered the domain name bitcoin.org, and created a web site at that address. On 31 October, Nakamoto published a white paper on the cryptography mailing list at metzdowd.com describing a digital cryptocurrency, titled “Bitcoin: A PeertoPeer Electronic Cash System”.

On 9 January 2009, Nakamoto released version 0.1 of the bitcoin software on SourceForge, and launched the network by defining the genesis block of bitcoin (block number 0), which had a reward of 50 bitcoins. Embedded in the coinbase transaction of this block is the text: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks, citing a headline in the UK newspaper The Times published on that date. This memo is interpreted both as a timestamp and as a mockery of the alleged instability caused by the Fractional-Reserve Bank.

Nakamoto worked with other developers on Bitcoin software until mid-2010 and made all the changes to the source code himself. He then passed control of the source code repository and network alarm keys to Gavin Andresen, transferred some related domains to various prominent members of the Bitcoin community, and ended his involvement in Project Bitcoin. As of November 2021, this will bring his net worth up to $ 73 billion, making him the 15th wealthiest person in the world.

Types of blockchain

Public Blockchains

Public blockchains are open, decentralized networks of computers accessible to anyone wanting to request or validate a transaction (check for accuracy). Those (miners) who validate transactions receive rewards.

Private Blockchains

Private blockchains are not open, they have access restrictions. People who want to join require permission from the system administrator. They are typically governed by one entity, meaning they’re centralized. For example, Hyperledger is a private, permissioned blockchain.

Hybrid Blockchains or Consortiums

Consortiums are a combination of public and private blockchains and contain centralized and decentralized features. For example, Energy Web Foundation, Dragonchain, and R3.

Sidechains

A sidechain is a blockchain that runs in parallel with the mainchain. This allows users to move digital assets between two different blockchains, improving scalability and efficiency. An example of a sidechain is Liquid Network.

The future of blockchain

As blockchain is a new technology, predictions about its potential are still mixed. According to a

TechRepublic Research survey, 70% of the experts surveyed have never used blockchain. However, 64% of them say they expect blockchain to have some impact on the industry and most people expect positive results.

A recent Trend Insight Report by analyst firm Gartner made the following predictions:

By 2022, only 10% of companies will use blockchain to achieve fundamental transformation.
By 2022, at least one innovative company based on blockchain technology is worth $ 10 billion
The business value of blockchain will grow to over $ 360 billion by 2026 and over $ 3.1 trillion by 2030.

Cybersecurity is one of the most promising areas for the projected growth of blockchain technology. Data manipulation has always been a challenge for businesses of all sizes. Blockchain technology can be used to prevent tampering, keeping data secure and allowing participants to verify a file`s authenticity.