The technology on which cryptocurrencies are based is called Blockchain, or blockchain in French. It allows all actors in the same network to reach a consensus without ever calling into question the trust, and therefore the roles, granted to each of them.
The beginnings
The architecture behind Blockchain technology was described as early as 1991 when researchers Stuart Haber and W. Scott Stornetta introduced a computer solution, allowing digital documents to be timestamped and therefore never backdated or altered.
Their system used a cryptographic secure blockchain to store time-stamped documents. Subsequently, in 1992, the so-called “Merkle tree” protocol was introduced into operation, thus making the system more efficient by allowing several documents to be brought together into a single block. However, this technology fell into obscurity, and the patent expired in 2004, four years before the creation of Bitcoin.
Reusable Proof of Work: Reusable proof of work
In 2004, computer scientist and cryptographic activist Hal Finney (Harold Thomas Finney II) launched a system called RPoW (“Reusable Proof Of Work”). The system worked by receiving a non-tradable, non-fungible proof-of-work token based on the Hashcash system, which in return created a token with an RSA signature which could then be transferred from person to person.
RPoW solved the problem of double spending by maintaining a record of token ownership, recorded on a trusted server, designed to allow any user across the world to verify its accuracy and integrity in real time. .
We can consider RPoW as a first prototype and a first step in the history of cryptocurrencies.
The Bitcoin network
At the end of 2008, a white paper introduced a decentralized peer-to-peer electronic payment system, called Bitcoin. The white paper was distributed via a cryptography-related email listserv by an individual or group of individuals using the pseudonym Satoshi Nakamoto.
The Bitcoin network is based on the HashCash proof-of-work algorithm, but instead of using a trusted computing function like RPoW, double-spending protection is provided by a decentralized peer-to-peer protocol in order to track and verify transactions. In short, Bitcoins are “mined” as a reward, using the proof-of-work mechanism, by individual miners and the transactions are then verified and validated by the decentralized nodes in the network.
On January 3, 2009, Bitcoin was born when the first Bitcoin block was mined by Satoshi Nakamoto, the block offered a reward of 50 Bitcoins. The first recipient of Bitcoin was Hal Finney, who received 10 Bitcoins from Satoshi Nakamoto in the world's first Bitcoin transaction on January 12, 2009.
L’Ethereum
In 2013, Vitalik Buterin, a programmer and co-founder of Bitcoin Magazine stated that Bitcoin needed a scripting language to build decentralized applications. Unable to find an agreement within the community, Vitalik launched the development of a new distributed computing platform based on Blockchain: Ethereum, equipped with a scripting functionality called “smart contracts”. » (smart contracts in French).
Smart contracts are programs or scripts that are deployed and executed on the Ethereum Blockchain; they can, for example, be used to make a transaction if certain conditions are met. Smart contracts are written in specific programming languages and compiled into bytecode, which is a decentralized “Turing-complete” virtual machine, called the Ethereum Virtual Machine (or EVM) that can then read and execute them.
Developers also have the ability to create and publish applications running on the Ethereum Blockchain. These applications are generally called DApps (Decentralized Applications) and there are already hundreds of DApps running on the Ethereum Blockchain, including social media platforms, betting applications as well as financial exchanges.
Ethereum's cryptocurrency is called Ether, it can be transferred between accounts and is used to pay fees generated by computer computing power devoted to executing smart contracts.
Résumé
Today, Blockchain technology is gaining more and more attention among the general public and is already used in a variety of applications, not limited to cryptocurrencies. For more information on Blockchain and many other exciting topics, be sure to watch other videos on Binance Academy.