The blockchain is the technology that underlies cryptocurrencies. It allows every client in the network to come to an agreement without ever needing to trust one another.
When study scientists Stuart Haber and W. Scott Stornetta established a computationally viable way for time-stamping digital documents so that they could not be backdated or manipulated with in 1991, they created the concept of blockchain technology.
The time-stamped papers were stored in a cryptographically secure chain of blocks, and Merkle trees were added to the architecture in 1992, making it more efficient by allowing several documents to be collected into one block. However, the technique was never implemented, and the patent expired in 2004, four years before Bitcoin was created.
Proof Of Work That Can Be Used Again
Hal Finney (Harold Thomas Finney II), a computer scientist and cryptographic campaigner, introduced the RPoW (Reusable Proof Of Work) method in 2004. The system functioned by taking a non-exchangeable or non-fungible Hashcash-based proof of work token and producing an RSA-signed token that could be transferred from one person to another.
RPoW solved the problem of double-spending by registering token ownership on a trustworthy server that allows users all over the world to check its correctness and integrity in real-time.
In the history of cryptocurrencies, RPoW can be considered an early prototype and an important early milestone.
Network of Bitcoins
An individual or group using the pseudonym Satoshi Nakamoto sent a white paper to a cryptography mailing list in late 2008 introducing a decentralized peer-to-peer electronic cash system named Bitcoin.
The double-spending security in Bitcoin was supplied through a decentralized peer-to-peer protocol for tracking and confirming transactions, based on the Hashcash proof of work algorithm, but rather than using hardware trusted computing function like the RPoW. Individual miners “mine” Bitcoins for a reward using the proof-of-work technique, which is subsequently validated by the network’s decentralized nodes.
Bitcoin was created on January 3rd, 2009, when Satoshi Nakamoto mined the first bitcoin block, which had a reward of 50 bitcoins.
Hal Finney was the first Bitcoin recipient, receiving ten bitcoins from Satoshi Nakamoto in the world’s first bitcoin transaction on January 12, 2009.