History of Blockchain: Timeline & Evolution

The History of Blockchain is a fascinating journey from its bare cryptographic roots to its emergence as an industry-reshaping technological giant. Picture this: It’s the 1990s, and a mysterious figure named Satoshi Nakamoto steps onto the digital stage. Armed with cryptographic brilliance, Nakamoto introduces Bitcoin—a groundbreaking Cryptocurrency. But wait, there’s more! Bitcoin’s underlying technology, the Blockchain, emerges as a game-changer beyond mere digital coins.

Fast forward to today, and Blockchain isn’t just about trading tokens. It’s the backbone of innovations in finance, healthcare, and supply chain management. Imagine a distributed ledger—a digital parchment shared across countless nodes in a vast computer network. This seemingly mundane format has become a technological titan, reshaping how we secure, verify, and exchange digital assets. With the current market capitalisation of Bitcoin (A product of Blockchain) standing at £1,070 Billion, it’s the perfect time to explore the History of Blockchain Technology. Let's dive in.

Table of Contents

1) A Brief History of Blockchain

   a) 1991

   b) 1992

   c) 2000

   d) 2004

   e) 2008

   f) 2009

   g) 2014

   h) 2015

   i) 2016

   j) 2017

   k) 2018

   l) 2019

   m) 2020

   n) 2021

   o) 2022

   p) 2023

2) The Future of Blockchain

3) Bitcoin’s Role

4) The 5 Major Blockchain Innovations

5) Conclusion

A Brief History of Blockchain

Blockchain has grown into a technological and financial giant. Such success for Cryptocurrency and Blockchain did not come for granted, as they went through many years of growth before reaching the current stage. Let's discuss the evolution of Blockchain over the years.

1991

In 1991, two scientists, Stuart Haber and W. Scott Stornetta, published their work in cryptography. Their work included a chain of blocks secured using cryptography so the content and its date couldn't be tampered with. This system later became known as Blockchain Technology, referring to the chain of blocks, where each block stored vital information.  

1992

The system was further upgraded in 1992 when Merkle Trees was included to make it more efficient. This made adding multiple documents on one block in a Blockchain possible. Unfortunately, this technology reached a cease in 2004 due to a patent. 

2000

Stefan Konst published his theory for cryptographically secured chains and their implementation in 2000.  

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2004

Hal Finney introduced a digital Cash system in 2004. This system was referred to as Reusable proof of work, and it solved the critical issue of double spending by registering token ownership.   

2008

Satoshi Nakamoto modified Merkle Tree’s model in 2008, leading to a more secure system containing a data exchange history. This concept of a Distributed Blockchain was documented in his white paper “a peer-to-peer electronic cash system”. This peer-to-peer network of time stamps led to Blockchain becoming the backbone of cryptography.
 

  

2009

This was an important year in Blockchain history as Satoshi Nakamoto released the white paper for Bitcoin in 2009. Blockchain reached a new peak of security at this stage, as documented by an event in the UK in 2013.    

James Howells, an IT worker in the UK, started mining bitcoins in 2009, spending over 14000 GBP until 2013. Once he was done Mining Bitcoins, he extracted his drive and sold the remaining parts of his laptop. Unfortunately, he tossed his hard drive away with garbage while cleaning his room in 2013. A few years passed, and while he could not claim his Bitcoins, which rose to a value of more than 105 million GBP by 2017, no one else could claim that money.  

2014

Blockchain Technology was separated from currency, leading to the birth of Blockchain 2.0 in 2014. This changed the focus of industries away from digital currency and its trajectory to the development of Blockchain technologies.   

2015

Vitalik Buterin created and launched the Ethereum Frontier Network with its other co-founders in 2015. Ethereum was another open-source Blockchain, which later reached the second highest market capitalisation, second only to Bitcoin. Ethereum came with smart contract functionality and the ability to deploy decentralised applications, allowing users to interact with them.   

The Linux Foundation launched the Hyperledger project in the same year, where it started working on an open-source Blockchain. It was developed as an umbrella project, facilitating the collaborative development of distributed ledgers. Its fundamental goal is to enhance performance to help in global transactions. 

2016

Blockchain was finally referred to as a single term rather than two different entities, moving further from how it was described in Satoshi Nakamoto's original white paper on Blockchain.   

In 2016, when Blockchain started seeing the face of mainstream popularity, the Decentralised Autonomous Organisation of Ethereum (DAO Ethereum) had its code exploited. This led to a difference in the principles of its stockholders, leading to a hard fork in Ethereum. Simultaneously a Cryptocurrency exchange service known as Bitfinex was hacked, and 120,000 bitcoins were stolen in the process. 

2017

Japan recognised Bitcoin as a legal form of payment method in 2017. In the same year, Block. One, a private company, launched an Electro-Optical System (EOS) as a native Cryptocurrency.  EOS.IO has been used as a decentralised operating system and facilitates the deployment of decentralised apps via autonomous decentralised corp. 

2018

Bitcoin turned ten years old in 2018, marking its success; however, what followed was not as celebratory for Bitcoin. Online platforms soon started banning Cryptocurrency advertisements, with Google, Facebook, and Twitter following suit. At the end of 2018, Bitcoin’s value reached a significant low of 3157.23 GBP. 

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2019

The Ethereum network exceeded 1 million transactions per day in 2019. Soon, Amazon announced an Amazon Managed Blockchain service on its Amazon Web Services (AWS) Platform.   

2020

 Ethereum launched Beacon Chain in 2020 in preparation for Ethereum 2.0. Stablecoins, which are more stable than traditional cryptocurrencies, also saw a rising popularity this year.  

2021

2021 can be considered the most eventful year for Blockchain Technology which, includes the impact of the COVID-19 pandemic. Here's a roadmap of how this year unfolded in the realm of Blockchain and digital assets: 

1) Q1: Rise of NFTs

1) January - March

a) NFTs gain significant traction, becoming a popular form of digital assets.

b) Artists and traders embrace NFT marketplaces like OpenSea for trading digital art, videos, and music records.

c) The surge in NFT popularity boosts the digital assets market.

2) Q2: Virtual World and Metaverse Creation

2) April - June

a) The pandemic-driven remote work culture continues to evolve.

b) Increased interest in Virtual Reality (VR) and Augmented Reality (AR) technologies.

c) Integration of VR, AR, and Web3 technologies leads to the conceptualisation of the Metaverse.

d) Mark Zuckerberg announces Facebook’s rebranding to Meta, reflecting a focus on building the Metaverse.

3) Q3: Bitcoin's Highs and Lows

3) July - September

a) Bitcoin reaches an all-time high value of £53,884.68.

b) Elon Musk endorses Bitcoin as a payment method for Tesla vehicles.

c) Musk later retracted this endorsement due to environmental concerns related to Bitcoin mining.

4) Q4: Global Reactions to Cryptocurrency

4) October - December

a) El Salvador becomes the first country to adopt Bitcoin as legal tender.

b) India bans the use of Cryptocurrencies as a payment method.

c) Despite varied national responses, Web3 technology sees widespread promotion and adoption globally.

2022

The year 2022 carried the previous popularity of NFTs, leading to more excellent opportunities for trading and earning with NFTs. It was further endorsed on the Metaverse by several corporate giants like Adidas, Puma, Nike, Walmart, Gucci and Ferrari. These companies created and promoted NFT designs based on their products for avatars on Metaverse. 

However, NFTs were not taken positively everywhere, with India taxing digital assets at 30%. Blockchain and its uses continue to be explored and tested in various fields, such as Blockchain in the Supply Chain, satellite communication using Smart Contracts, entertainment, automation, and real estate.

2023

Despite the recent setbacks for Cryptocurrency, businesses continue to explore Blockchain Technology with increased vigilance. While it has traditionally found applications in finance and banking, the scope extends far beyond. Think gaming, media, real estate, healthcare, cybersecurity, Smart Contracts, NFTs, IoT, transportation, supply chain management, and even government services. 

However, the real game-changer might just be Web 3.0—an internet iteration that promises decentralisation and robust data security, propelling Blockchain Technology to new heights!

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The Future of Blockchain

If one thing is highlighted in history, it's the future possibilities of Blockchain Technology. Governments are looking to implement Blockchain Technology and privacy. There have been hints that we might soon have a public Blockchain that anyone can use.    

The technology might also facilitate innovation in task automation, making its way into search engines. According to Statista, the Blockchain industry is expected to increase to 31 billion GBP by 2025. Therefore, having a career in Blockchain Technology can be profitable.  

Previously, Blockchain Developers spearheaded the evolution of Blockchain Technology, which has created a massive demand for professionals.   

Bitcoin's Role

The History of Blockchain would be incomplete without mentioning the role of Bitcoin. Satoshi Nakamoto created Bitcoin to use it as a form of cash with the benefits of peer-to-peer review. This payment didn’t need a central bank or other authorities to maintain or operate it the same way as physical cash. This led to the first-ever Cryptocurrency and the successful implementation of Blockchain.   

From documenting Bitcoin in a white paper in 2008 to launching its code in 2009, Satoshi Nakamoto played a crucial part in its development. Satoshi’s creation, an engine to run the Bitcoin ledger, was called the Blockchain. It was the original and the most prominent Blockchain still used to orchestrate Bitcoin transactions today.    

Even after the creator of Bitcoin, Satoshi Nakamoto, disappeared, his creation, Bitcoin, and his wisdom contributed significantly to Blockchain Technology. Bitcoin and Blockchain technologies were passed to the newer generation of Developers and Scientists, and new use cases of Blockchain and discoveries are still being made.

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The 5 Major Blockchain Innovations 

In a span of 10 years, five major innovations have occurred in the Blockchain system and  have resulted in huge breakthroughs. These innovations include:

a) The Invention of Bitcoin

b) The Separation of Blockchain from Bitcoin

c) The Invention of Smart Contracts

d) The Transition to Proof-of-Stake Mining

e) The Focus on Blockchain Scaling Solutions

Let’s explore these in more detail.

The Invention of Bitcoin 

Satoshi Nakamoto invented Bitcoin and introduced Blockchain Technology in 2009, aimed at creating a secure, decentralised, global currency alternative to fiat currency. Some important details include:

a) Bitcoin was built on the cryptographic chain of blocks developed by Stuart Haber and W. Scott Stornetta.

b) The first true conceptualisation of Blockchain came with Nakamoto's 2008 invention.

c) Soon the Bitcoin whitepaper was released and made open source.

d) This allowed for the creation of 'altcoins' like Litecoin and Namecoin, which sought to improve on Bitcoin.

Blockchain Separates from Bitcoin 

A few years after Bitcoin's release, developers recognised Blockchain's potential beyond Cryptocurrency. Previously, Blockchain and Bitcoin were often considered synonymous, but Bitcoin is simply an application built with Blockchain.  Blockchain's core features include:

a) Decentralised, distributed ledger for permanent transaction records without Third-party authentication.

b) Enhanced transparency, speed, and decentralisation for various exchanges.

Industry adoption was kickstarted in around 2014 when significant investment and research was put into Blockchain applications. By 2017, approximately 15% of banks were using Blockchain Technology in some form.

Smart Contracts 

The next big innovation in this technology came in 2013 in the form of Ethereum. Founded in 2013 by Vitalik Buterin, Ethereum is now the second-largest Cryptocurrency by market capitalisation. Ethereum’s growth trajectory included:

a) Building decentralised Blockchain applications.

b) The introduction of the ‘Smart Contracts’ feature enables the direct exchange of various assets without intermediaries.

c) Holding assets in escrow and released upon meeting predetermined criteria.

d) Large corporations like Microsoft and UBS utilise Smart Contracts to reduce costs and save time.

Proof of Stake Mining 

The next big shift in the History of Blockchain usage came when Cryptocurrencies like Ethereum transitioned from proof-of-work mining to proof-of-stake mining. Mining is the process through which new blocks are created and transactions are verified. Consider these important points about this shift:

a) Proof-of-work involves using computer power to solve complex problems for transaction verification.

b) Miners are rewarded with transaction fees or new tokens.

c) Proof-of-stake addresses cost and energy consumption issues identified in the proof-of-work model.

d) Mining power in the proof-of-stake model is based on a stake rather than computational power.

Blockchain Scaling Solutions

One of the limitations of Blockchain is its scalability. This limitation is due to the need for all network computers to process transactions, which results in slow speeds. The two steps being taken to address this issue are:

a) Working on reducing the number of computers required for transaction verification without compromising security.

b) Developing Cryptocurrency offers faster transaction speeds than Bitcoin.  

Conclusion 

Diving into the History of Blockchain Technology reveals its profound impact on Technology and Finance, evolving from the birth of Bitcoin to the emergence of corporate Blockchain projects. This journey showcases Blockchain's transformative potential, continuously pushing boundaries and unlocking new possibilities. We hope this blog helps you gain a deeper understanding of this technology as well as carve a new career path.

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