Blockchain is one of the most useful, applicable, powerful, and incredibly misunderstood technologies of our time. Discover all about the evolution of bitcoin and blockchain technology.
If it wasn’t, we would all be living in 2035 right now. The power of blockchain technology still lies mostly unrealized. At its most basic function, blockchain is simply a time-stamped, immutable record-keeping system. The information held within those records can be near anything imaginable.
The name “blockchain” comes from the fact that the records are collated into relevant groups (blocks) and are then strung along and bound to past and future records of the same type of data (chain). Producing a historical ledger that cannot be changed, and can be viewed by anyone who cares to look. Because of this straightforward and public distribution- blockchain eliminates the need for centralized authority or of being overseen by a third party.
The concept of decentralized data sharing promotes democratized authority structures. Making it simple to create a system that self regulates- no matter what it is that system creates. Without the need for a centralized authority, this means that there is also a reduced likelihood of costly error or incurred fees. Consider the extraneous expense gained via using central banking authorities, lawyers to mitigate contracts, real estate agencies to mitigate sales. The blockchain could effectively make corruption within business inconceivable and reliance on third-party organizations a thing of the past.
Evolution of Bitcoin and Blockchain: TechnologyWhat the First Blockchain Brought Us
In conjunction with the novel process of a functioning currency system that was entirely decentralized, blockchain brought a number of other novel concepts to the way we think about currency within the first few years of its origin.
This borderless, global payment system showed in real-time, that money could be securely transferred anywhere in the world- both immediately and without a number of unnecessary fees. It created a system that was exempt from artificial inflation or quantitative easing. It created an opportunity to prevent economic devastation like the housing crash of 2008. But it also brought more.
It showed that through a series of complicated mathematical algorithms, we could create rock-solid verification systems that can’t be tampered with or duplicated. Because this system was shown to work reliably, trust in a trust-less environment was achieved.
Bitcoin, as the system that debuted blockchain usefulness, also brought another novel concept into play- a democratized authentication system in which administrators were paid for their time and participation in maintaining the blockchain. The proof of work consensus mechanism brought with it a way that validation responsibility could be both widespread and lucrative. The payment system was non-negotiable and built into the exact system which kept the coin inflation proof. This is the concept of “halving” which, in an attempt at brevity, is discussed in other articles.
Evolution of Bitcoin and Blockchain: The Possibility of Bitcoin and Crypto
From those initial seeds that were planted in the fertile soil technology, a multitude of offshoots and vines have grown. Thousands of altcoins have been created, each with unique aspects of blockchain technology securely loaded into their protocols.
The most notable major hard fork (a splitting of ideas that can’t reach consensus, so an entirely new protocol is produced) of blockchain is arguably Ethereum. The creator of ethereum, Vitalik Buterin, an early bitcoin developer saw unrealized potential in the system. He wanted to create a Turing complete system, a system that could effortlessly simulate certain human behaviors, to that the blockchain technology could extend its decentralized reach to contract fulfillment.
Breaking off from the bitcoin community, Vitalik with the help of others created a distributed ledger program that went one step further- creating a virtual distrusted machine. This means that the entire Ethereum network is capable of running a number of decentralized applications- most notably “smart contracts”.
Smart contracts work off of the premise of an “If This Then That” (IFTTT) protocol. Which means that blockchain can be used to ensure that certain conditions are met, or actions are performed, before unlocking the possibility to move forward in a multi-step agreement. Vitalik’s system also created a small payment system, in which micro-transactions could be processed without jamming up a system. Something that is wildly important, specifically if you hope to bring in everyday businesses like corner shops or restaurants.
DAO’s (decentralized organizations) also became possible. Organizations or corporations that were entirely decentralized, in which smart contracts would govern everything from finance to policy, to worker compensation, and business output.
Ethereum also saw the advent of “tokenized assets”. Which was perhaps the most exciting thing to come of the new network. Even though it rarely gets the attention it deserves. Tokenized assets are essentially a way that someone can translate their goods or services into crypto tokens. Making items easily tradable commodities across different markets, and across the globe.
Evolution of Bitcoin and Blockchain: Burgeoning Technology
From this moment forward, problems have arisen and the limitations have been noted. The crypto community and developers have further scrutinized the power of blockchain in order to address them. Which brings us firmly into the present day of blockchain’s technological evolution.
In crypto technology, it is decidedly “eat or be eaten”. As each time an issue arises, it’s almost immediately addressed, either by the network that created it or by another coin entirely. Because of these thousands of different coins, with thousands of different technological applications have surfaced. Each hoping to answer whichever new problem it is presented with.
Where the technology will go from here is anyone’s guess. The market is literally flooded with brilliant ideas and spectacular solutions that remain largely unrealized- for now. This is one of the many reasons it’s so important that crypto enthusiasts do close research into whatever coin they interact with. Hoping to better understand the implications of the technology that underlies it.
Because, as you’ve seen- bitcoin is far more than just a currency. It’s a solution to some of the world’s most pressing problems.