Blockchain 101

Introduction to the Blockchain

You’ve probably heard about blockchain in a wide variety of contexts from financial services and e-commerce to smart contracts, the internet of things, and supply chain management. But how did this all get started? What do blockchains actually do? What will they be used for?

To understand the potential of blockchain technology it’s helpful to understand the context of this wave of innovation by looking at the first blockchain, Bitcoin, and the first use-case, digital money.

The concepts and ideas that would lead to blockchain and cryptocurrency date back to the early 1980s. The next 25 years saw the rise and fall of many digital cash projects and culminated in Satoshi Nakamoto creating Bitcoin, the first blockchain.

Blockchain 101

Satoshi solved the problems faced by previous failed digital cash projects, including maintaining a reliable peer-to-peer network and preventing against counterfeit. Satoshi’s creation was a transparent, secure ledger that could not be compromised; once any information is added to the chain, it cannot be removed. The architecture of a blockchain allows peers to interact in a trustless system without the aid of an intermediary. Blockchains are able to do this by having the network members reach consensus, a computationally intensive process secured by cryptography. While there are many apparent benefits to blockchains, the technology is still relatively young and is yet to meet the full demand faced by networks today. Despite these unknowns, there is still a lot of intrigue over the potential impact of blockchain technologies.