A blockchain is a distributed ledger with growing lists of records (blocks) that are securely linked together via cryptographic hashes. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (generally represented as a Merkle tree, where data nodes are represented by leaves).
Since each block contains information about the previous block, they effectively form a chain (compare linked list data structure), with each additional block linking to the ones before it. Consequently, blockchain transactions are irreversible in that, once they are recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks.
A blockchain was created by a person (or group of people) using the name (or pseudonym) Satoshi Nakamoto in 2008 to serve as the public distributed ledger for bitcoin cryptocurrency transactions, based on previous work by Stuart Haber, W. Scott Stornetta, and Dave Bayer.
The implementation of the blockchain within bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server.
The bitcoin design has inspired other applications and blockchains that are readable by the public and are widely used by cryptocurrencies. The blockchain may be considered a type of payment rail.
Private blockchains have been proposed for business use. Computerworld called the marketing of such privatized blockchains without a proper security model “snake oil”; however, others have argued that permissioned blockchains, if carefully designed, may be more decentralized and therefore more secure in practice than permissionless ones.
Cryptographer David Chaum first proposed a blockchain-like protocol in his 1982 dissertation “Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups.”
Further work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta. They wanted to implement a system wherein document timestamps could not be tampered with. In 1992, 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.
Bitcoin, Ethereum and Litecoin transactions per day (January 2011 – January 2021)
Under their company Surety, their document certificate hashes have been published in The New York Times every week since 1995.
The first decentralized blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008.
Nakamoto improved the design in an important way using a Hashcash-like method to timestamp blocks without requiring them to be signed by a trusted party and introducing a difficulty parameter to stabilize the rate at which blocks are added to the chain.
The design was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.
In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20 GB (gigabytes).
In January 2015, the size had grown to almost 30 GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50 GB to 100 GB in size. The ledger size had exceeded 200 GB by early 2020.
The words block and chain were used separately in Satoshi Nakamoto’s original paper, but were eventually popularized as a single word, blockchain, by 2016.
According to Accenture, an application of the diffusion of innovations theory suggests that blockchains attained a 13.5% adoption rate within financial services in 2016, therefore reaching the early adopters’ phase. Industry trade groups joined to create the Global Blockchain Forum in 2016, an initiative of the Chamber of Digital Commerce.
The Future: Predictions about upcoming trends
According to a forecast by research firm Gartner, by 2026 the business value added by blockchain will increase to over $360 billion. Then, by 2030, that will increase to more than $3.1 trillion.
With current and future trends, blockchain is predicted to make a big revolution in the coming decades.
In which areas will blockchain trends be applied to better serve people’s lives?
Impossible to ignore the following 5 areas in 2023 and beyond:
An ongoing challenge for businesses today is data tampering. Thus, cybersecurity is one of the most promising areas of projected growth for blockchain. Blockchain technology can be used to prevent tampering, secure data, and allow users to verify the authenticity of files.
Governments can start implementing distributed ledger technology (DLT) systems to replace traditional paper-based systems.
In addition, voting in elections using blockchain technology can be easier, faster, and more secure. Blockchain provides an immutable record of votes to prevent problems of fraud or forgery. It will also help protect voter identities and even support remote voting.
3. Finance – Banking
In 2021, El Salvador was one of the first countries to accept Bitcoin as a legal tender. Due to global inflation and rising costs of money transfers between financial intermediaries. Many researchers think that developing countries are likely to accept cryptocurrencies soon.
In addition, another promising area for blockchain development trends is national cryptocurrencies. It can work in conjunction with existing traditional currencies. This currency helps users to make transactions without depending on any third parties. It also allows central banks to control the circulating supply.
Blockchain can be used to develop applications to manage patient data, control drug supply, automate medical examination and treatment transactions, and more.
In particular, concerns about the production and distribution of counterfeit vaccines have been resolved. Because blockchain will be an effective tool to verify the authenticity of vaccine shipments and track vaccine distribution.
IBM is one of the pioneers when it comes to leveraging blockchain to develop a vaccine delivery system.
Blockchain will be a useful technology in this area. Because it can monitor and measure the effectiveness of advertising campaigns, minimizing cases of advertising fraud. Blockchain technology helps in automatic censorship, removing virtual accounts, and verifying advertising engagement. In addition, it can help collect data on customer behavior and psychology.
Hope the above article helps you get an overview of the 101 and future of blockchain. Although there are still challenges, we have full faith in the potential future of this technology.