The first time I heard of blockchain was by being the distributed ledger that bitcoin uses. And I’m sure so have many of you, maybe still you believe the same. So, let’s take a trip down the years of how blockchain came to be and what it can be potentially.
Satoshi Nakamoto was the inventor of the bitcoin protocol, publishing a paper via the Cryptography Mailing List in November 2008. He then released the first version of the bitcoin software client in 2009, and participated with others on the project via mailing lists, until he finally began to fade from the community toward the end of 2010. Nakamoto worked with people on the open-source team, but took care never to reveal anything personal about himself, and the last anyone heard from him was in the spring of 2011, when he said that he had “moved on to other things”. As of 2 February 2017, Nakamoto is believed to own up to roughly one million bitcoins,3 with a value estimated at over US\$1.1 billion.
Bitcoin is a digital currency and a public ledger. Often the ledger is itself mistook to be what blockchain is. That’s not entirely true. Bitcoin as a ledger is a type of blockchain. Blockchain as a whole is the technology underlying bitcoin.
"[Blockchain] is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one." — Sally Davies, FT Technology Reporter
So, let’s move on to what blockchain is.
Blockchain by definition is an open transparent distributed ledger. That’s it. Nothing more. Nothing less. But you still feel confused. Let me explain what that definition means.
Here's what Vitalik Buterin, the co-founder of Ethereum(An open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality) and the co-founder of Bitcoin Magazine says:
"A blockchain is a magic computer that anyone can upload programs to and leave the programs to self-execute, where the current and all previous states of every program are always publicly visible, and which carries a very strong crypto economically secured guarantee that programs running on the chain will continue to execute in exactly the way that the blockchain protocol specifies." — Vitalik Buterin
Still not too clear? How about we take a look at how the World Economic Forum describes it with this video right here:
Makes a little more sense. Deloitte explains blockchain something like this:
You (a "node") have a file of transactions on your computer (a "ledger"). Two government accountants (let's call them "miners") have the same file on theirs (so it’s "distributed"). As you make a transaction, your computer sends an e-mail to each accountant to inform them. Each accountant rushes to be the first to check whether you can afford it (and be paid their salary "Bitcoins"). The first to check and validate hits “REPLY ALL”, attaching their logic for verifying the transaction ("Proof of Work"). If the other accountant agrees, everyone updates their file… This concept is enabled by "Blockchain" technology.
A pretty decent overview of the system. You must by now have a clear picture of what the blockchain is and can be turned into.
The world has already started reacting to this massive revolution.
Honduras government has put all land records on a public ledger - the blockchain. The minute there is a change in ownership, it gets recorded publicly.
The Australian Securities Exchange (ASX) announced that it would move Australia's equities clearing and settlement system on to blockchain.
ICICI Bank executes India’s first banking transactions on blockchain in partnership with Emirates NBD. Undertakes pilot transactions in international trade finance and remittance on blockchain.
Ascribe lets artist themselves upload digital art, watermark it as the definitive version, and transfer it.
And these are just a few examples of the many applications and areas blockchain is expanding it's reach to.
Blockchain is creating a biggest shift in paradigm the world has seen yet, since the days of world wide web. And it's here to create the revolution that will blow your mind.
"The technology likely to have the greatest impact on the next few decades has arrived. And it's not social media. It's not big data. It’s not robotics. It’s not even AI. You'll be surprised to learn that it’s the underlying technology of digital currencies like Bitcoin. It’s called the blockchain." — Don Tapscott
Needless to say what the future holds for blockchain and the huge potential blockchain can bring in to the current world. We get not just to witness a revolution, but also be a part of it.