Hey everyone 👋

Lately I have been diving into Web3. I started studying about Blockchain and that’s when I wondered why Blockchain was developed 😕and that’s when I read some articles and research paper and found out answer.

In this blog I will tell you the History of Blockchain. So let’s get started 😉

Story of Blockchain

Early Blockchain History (1982–2004)

Back in year 1982 cryptographer David Chaum first proposed a blockchain-like protocol in his dissertation “Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups”. As the name suggests gave the idea of transparent and secure system.

In 1991 Stuart Haber and W. Scott Stornetta developed cryptographically secured chain of blocks. At that time they wanted to build a system in which document timestamps could not be tampered so that no literation can be performed and we can have secure and transparent document creation. In their design blocks store the timestamps of digital documents.

The Blockchain idea continued in 1992 and Haber, Stornetta, and Dave Bayer incorporated Merkle trees into the design, which improved its efficiency by allowing several document certificates to be collected into one block.
The idea continued thereafter and many scientist published their papers and proposed ideas.

In 2004 Cryptographic activist Hal Finney introduced a system for digital cash known as “Reusable Proof of Work”. This step was the game-changer in the history of Blockchain and Cryptography. This System helps others to solve the Double Spending Problem (it’s like you have 1 Coin and at the same time you gave it two of your friends so here you have used just 1 coin to pay both of your friends) by keeping the ownership of tokens registered on a trusted server.

So this was some remarkable work that is done so far but still Blockchain was not that popular as it is now. The actual breakthrough happened after year 2008.

2008 America’s Financial Crisis

Back in 2008 the USA faced major banking crisis which disturbed the financial health of the country.

In 2008 banks gave risky home loans (subprime mortgages) even to people who couldn’t afford it. These loans were bundled and sold as “safe investments”, but they were actually very risky. When many people couldn’t pay their loans, the housing market crashed. Big banks and financial institutions collapsed, causing a global financial crisis. Millions lost their jobs, homes, and savings.

This 2008 crisis showed how corrupt the department was and in response to this and to enable transparency and trust among people a group or person named Satoshi Nakamoto released Bitcoin White Paper in 2009. With the development of Bitcoin they directly challenged centralized system of banks ensuring trust and transparency. He modified the model of Merkle Tree and created a system that is more secure and contains the secure history of data exchange. His System follows a peer-to-peer network of time stamping. His system became so useful that Cryptography became the backbone of Blockchain.

The year 2014 is marked as the turning point for blockchain technology. Blockchain technology is separated from the currency and Blockchain 2.0 is born. Financial institutions and other industries started shifting their focus from digital currency to the development of blockchain technologies.

In 2015, Ethereum Frontier Network was launched, thus enabling developers to write smart contracts and dApps that could be deployed to a live network. In the same year, the Linux Foundation launched the Hyperledger project.

And from then on Blockchain technology became more popular and different digital currencies started to show up.

In summary the whole idea of Blockchain was proposed to enhance transparency and security and generate trust among people.

I hope you liked this blog. 💚