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What is Blockchain ?

Blockchain is a type of Digital Ledger Technology (DLT) that consists of a growing list of records, called blocks, that are securely linked with cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data (usually represented as a Merkle tree, where data nodes are represented by leaves). A timestamp proves that the transaction data existed when the block was created. Because each block contains information about the block before it, it effectively forms a chain (compare the linked list data structure), with each subsequent block linked to its predecessors. Because of this, blockchain transactions are immutable because, once recorded, the data in any given block cannot be reversed without changing all subsequent blocks.

Blockchains are typically managed by a peer-to-peer network for use as a public distributed ledger, where nodes collectively adhere to a protocol to add and validate new transaction blocks. Although blockchain records are not unalterable, since blockchain forks are possible, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance.

The 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 identity of Satoshi Nakamoto remains unknown to date. Bitcoin’s implementation of blockchain makes it the first digital currency to solve the double-spending problem without the need for a trusted authority or central server. Bitcoin’s design has inspired other applications and blockchains that are publicly readable and widely used in cryptocurrencies. Blockchain can be considered as a kind of payment channel.

Private blockchains are designed for commercial use. Computerworld calls the marketing of such privatised blockchains without a proper security model “snake oil”, but others argue that permissioned blockchains, if carefully designed, can be more decentralized and therefore more secure in practice than permissionless ones.

History of Blockchain

Cryptographer David Chaum first proposed a blockchain-like protocol in his 1982 paper “Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups”. Further work on a cryptographically secure blockchain was described in 1991 by Stuart Haber and W. Scott Stornett. They want to implement a system where the time stamps of documents cannot be changed. In 1992, Haber, Stornetta, and Dave Bayer incorporated Merkle trees into the design, improving its efficiency by gathering multiple document certificates into a single block. Under her company Surety, her document certificate hashes have been published weekly in The New York Times since 1995.

The first decentralised blockchain was conceptualised 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 size of the Bitcoin blockchain file, which contains records of all transactions that have taken place on the network, reached 20 GB. In January 2015, the size grew to almost 30 GB, and from January 2016 to January 2017, the size of the Bitcoin blockchain grew from 50 GB to 100 GB. The book size will be 200 GB larger in early 2020.

The words block and chain were used separately in Satoshi Nakamoto’s original article, but were eventually popularised as one word, blockchain, in 2016.
According to Accenture, an application of the Diffusion of Innovation theory suggests that blockchains achieved a 13.5% adoption rate in financial services in 2016, making them the first part of adopters. In 2016, industry trade groups participated in the creation of the Global Blockchain Forum, an initiative of the Chamber of Digital Commerce.
In May 2018, Gartner found that only 1% of CIOs have identified any type of blockchain adoption in their organizations, and only 8% of CIOs are “planning or (viewing) active blockchain experiments” in the near term. For 2019, Gartner reported that 5% of CIOs believe blockchain technology is a “game changer” for their business.

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