Blockchain is the most basic technology of digital currency, which ensures that every Internet user can reach a consensus without mutual trust.


initial

The idea of ​​blockchain technology can be traced back to 1991. In order to ensure that timestamp files cannot be traced or tampered with, two scientists at the time, Stuart Haber and W. Scott Stornetta, introduced a practical computing solution.

The system uses a block encryption chain to store time-stamped files, and in 1992, Merkle trees were also incorporated into the system. This new technology of grouping multiple documents into one block greatly improved efficiency. Unfortunately, the technology was later ignored and gradually abandoned. The patent also expired in 2004, four years before the birth of Bitcoin.


Reusable Proof of Work (RPoW)

In 2004, computer scientist and cryptography enthusiast Hal Finney (Harold Thomas Finney II) introduced a system called RPoW, or Reusable Proof of Work.

The system works by accepting a non-exchangeable or non-fungible Hashcash-based proof-of-work token and creating an RSA-based token that can be transferred between any users.

RPoW solves the double-spending problem by having coin holders register accounts on a fully trustworthy server, which is designed to allow users around the world to verify its correctness and integrity at any time.

RPoW can be said to be an early prototype of blockchain and an important beginning in the history of digital currency.


Bitcoin Network

At the end of 2008, a person using the pseudonym Satoshi Nakamoto published a white paper and introduced a decentralized, peer-to-peer electronic cash system - Bitcoin.

Compared to the trusted hardware computing function of RPoW, Bitcoin uses the hashcash proof-of-work algorithm to track and verify transactions through a decentralized peer-to-peer protocol to prevent double payments. In simple terms, Bitcoin is a "mining" reward for each miner under the proof-of-work mechanism, which is then verified by decentralized nodes in the entire network.

On January 3, 2009, Bitcoin was born. The first Bitcoin was mined by Satoshi Nakamoto, who was rewarded with 50 Bitcoins. The first person to receive Bitcoin was Hal Finney, who received 10 Bitcoins from Satoshi Nakamoto on January 12, 2009. This was the world's first Bitcoin transfer.


Ethereum

In 2013, a programmer named Vitalik Buterin, also the co-founder of Bitcoin Magazine, said that Bitcoin needed a scripting language to build decentralized applications. Failing to gain recognition in the Bitcoin community, Vitalik began to develop a new distributed computing platform based on blockchain technology, which is Ethereum. The scripting function supported by Ethereum is called smart contracts.

Smart contracts are programs or scripts deployed and run on the Ethereum blockchain. For example, they can be used to conduct a transaction under certain conditions. Smart contracts are written in a specific programming language and compiled into byte code. These smart contracts can be read and executed by a decentralized, Turing-complete Ethereum Virtual Machine (EVM).

Developers can also create and publish new applications on the Ethereum blockchain, which are usually called decentralized applications (DApps). Currently, there are hundreds of decentralized applications running on the Ethereum blockchain, including social platforms, online gambling and financial exchanges.

Ethereum's digital currency is called Ether, which can be transferred between different accounts. Ether is usually used to pay for the computing power required to execute smart contracts.

Today, blockchain technology has received a lot of attention from mainstream media and has been applied to many real-world scenarios besides digital currency. For more information on blockchain and related industries, please pay attention to other videos on our Binance Academy.