Hey, everyone.
Welcome back to the course.
After defining what blockchain is.
Let's go and look into the history of the blockchain.
Let's start with how everything began.
The first known attempt at cryptocurrencies occurred in Netherlands in the late 1980s.
In the middle of the night, the petrol stations present in the remote area were being raided for cash
and the operators were unhappy about the situation.
But the petrol stations had to stay open overnight so that the trucks could refuse.
Someone in Netherlands had a bright idea of putting money into the smartcards and so the electronic
cash was born.
Truck drivers were given these cards instead of the money, and the stations were now safer from the
robberies.
David Chaum, an American cryptographer who was already investigating electronic cash, came to know
about Netherlands situation and decided to move to the country.
In the late 1980s, working with organisation, he started Digicash, which was the first Internet money
invention.
Unfortunately, due to some missteps, his company filed for bankruptcy around in 1998.
Apart from digital currencies, other ways to safeguard information were also being introduced.
A structure similar to that of blockchain has been mentioned in a research paper which was published
in 1991 by Haber and Stornetta with the topic How to Timestamp a Digital Document.
According to that paper, a client sends a document for Timestamping to a timestamping server and the
server signs the document with the current timestamp.
Also, the server would link the document to the previous document.
The pointers pointed to a specific data and not the location of the document, so if the data is changed,
the pointer would become invalid.
It ensured no one could tamper with the data that had once been passed through the server.
Learning and improving over the previous mistakes.
Satoshi Nakamoto published a white paper, Bitcoin, a peer to peer electronic cash system.
The paper claimed that it had a solution to the double spending problem in digital currency using peer
to peer network.
The main aim of the paper was to build a peer to peer version of digital currency that would enable
people to spend it directly without it going in a financial institution.
It was a huge innovation that allowed the user to transact directly without relying on the third party.
In the year 2009, the digital cryptocurrency Bitcoin was made available by Satoshi.
He released the concept of Genesis Block with 50 coins, which later became part of the Bitcoin peer
to peer network.
Bitcoin also brought in the idea of blockchain.
Around 2014, attention shifted from Bitcoin to blockchain.
The world realized that the blockchain can be separated from the currency and can be applied to various
other use cases.
This has led to the current testing and adoption period of blockchain.
Bitcoin was just the beginning of the implementation of blockchain.
Soon, a developer named Vitalik Buterin, who was the initial contributor to the Bitcoin codebase,
became frustrated with the limitations of the Bitcoin.
In the year 2013, he decided to start his own chain by learning and fixing the limitations of Bitcoin.
He launched the initial version of Ethereum in the year 2015, which was called Helium.
It was started with the functionality of smart contracts that can automatically perform logical operations.
This was based on a set of criterias established over the blockchain.
In other words, smart contracts are the major commitments for the legal contracts as they can act in
a similar way as your legal contracts.
For example, you can create a smart contract to bet on tomorrow's weather.
Let's say you and your friend are going to bet with this contract.
Both of you will predict and upload your guess through the smart contract with the betting amount over
the blockchain where it becomes immutable.
The digital currency sent to the contract will be permanently held till the next day.
Once the corresponding day arrives, the Smart contract will check whether you have won the prediction
of whether Bet or not.
If your prediction is correct, then the smart contract will automatically disperse the winning money
to your account.
Now let's look at the timeline and see how blockchain is evolving.
The concept of distributed computing started back in 1990, but it was before its time, so it was not
popularly accepted.
It came into Limelight in 2009 when an anonymous person named Satoshi Nakamoto created Bitcoin and introduced
the concept of blockchain, which is a distributed ledger maintained by anonymous consensus.
By the year 2011 and 12, the deployment of cryptocurrencies in applications related to cash started
to take shape and people began to use Bitcoin and other cryptocurrencies to transfer funds.
In 2012 and 13, the cryptocurrency transfers and digital payment system went mainstream, where top
industries started making their financial transactions using Bitcoin and the other popular currencies.
By the year 2014, financial markets and applications started seeing the use of blockchain beyond cash
transactions.
Small but disrupted applications came into being like upload of land records or KYC processes over the
blockchain.
In 2015, the smart contracts were introduced with Ethereum blockchain and that opens up a very innovative
and effective way of creating decentralized application on top of the blockchain.
In the same year, other blockchains also came to the rise, which were more inclined towards the enterprise
solutions like Hyperledger and R3 Corda.
These enterprise blockchains also introduce the permissioned blockchain concepts which can be efficiently
utilized by the government and enterprises to integrate their legacy systems with the blockchain.
By the year 2016 and 17, the market started developing on top of the blockchain and new protocols began
to emerge.
Currently, we are in a period of adoption and conceptualization with the aim of stability in the coming
years.
Almost top 60% companies of the Fortune 500 has accepted blockchain as the next big thing after the
Internet, and almost 90% of the banks throughout the world are working towards employing blockchain
in their existing systems.
That was about the history of the blockchain.
In the next session, we are going to learn about the key characteristics of the blockchain.
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Thank you.