• Sunday, June 23, 2024
businessday logo

BusinessDay

Blockchain Revolution: The origin story

African crypto award: Fuse.io nominated for Best Blockchain Company 2023

Last week, I was asked, ‘what exactly is the blockchain?’ and ‘why do I believe it will cause a major wealth redistribution?’ Well, financial pundits and investors understand that blockchain technology is not a fad or passing trend. Why? The secret lies in the origin of Blockchain creation.

While I did promise to take you back to the beginning, I must warn you that the true originator of modern-day blockchain is shrouded in a bit of mystery.

Challenges of the Past
Before blockchain, the digital world had its own set of problems. Digital transactions and data storage relied heavily on centralized systems like traditional banks. These intermediaries added costs and security vulnerabilities, making trust in these systems uncertain. Centralized databases, storing crucial documents, were susceptible to unauthorized changes or hacking, raising concerns about transparency and verifiability.

A recent system glitch at the African Telecommunications giant, MTN, saw billions of client debts mysteriously wiped clean from their systems. Whether a cyber-attack or system glitch, one thing is certain: had their systems utilized blockchain technology, such a ‘glitch’ would have been near impossible.

Birth of an Idea
Today’s blockchain is a combined product of years of research and innovation from computer scientists. Most notable was David Chaum’s doctoral thesis at the University of Berkeley, California, U.S.A., in 1982. David Chaum outlined a blockchain database in his dissertation, “Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups.”

In 1991, Stuart Haber and W. Scott Stornetta, both American Ph.D. holders in Computer Science, started a journey to develop a practical solution for time-stamping digital documents. Their collaboration produced the seminal paper “How to Timestamp a Digital Document.” Their focus was on preventing changing dates in digital documents. Using cryptography and a chain of blocks, they securely stored these time-stamped documents, similar to notarizing a document to ensure its content remains unchanged over time.

In 1995, David Chaum’s company Digicash launched several cryptocurrencies called digicash, eCash, and cyberbucks. It was built on his blockchain technology. The idea behind the project was to create a system that would allow people to make transactions online without the need for central authority. This was a huge step in the digital world. The system used a form of cryptography to ensure that transactions were secure and anonymous. Despite its innovative approach, the project ultimately failed. One of the reasons was that the internet was still in its early stages, and many people did not fully understand its potential. Governments and financial institutions were wary of digital currencies and did not see them as a viable alternative to traditional forms of money and ultimately led to the demise of the project.

Blockchain Renaissance
In 2008, in an online chat forum, a username Satoshi Nakamoto introduced the concept of a “Distributed Blockchain” in a whitepaper titled “A Peer-to-Peer Electronic Cash System,” where we can directly send and receive money between ourselves without intermediaries. It’s like passing digital cash directly from one person to another online. There is no major server needed. Nakamoto uploaded blockchain source code to SourceForge in 2008, so software developers around the world could contribute to the project. The release marked the beginning of a new era, as Nakamoto shared a detailed vision of a decentralized digital currency system that relied on blockchain technology. The content of the paper outlined the fundamental principles of the peer-to-peer electronic cash system, laying the groundwork for what would eventually become Bitcoin and the broader blockchain revolution.

The modern blockchain was launched in January 2009 along with the associated cryptocurrency, Bitcoin. This was a huge step forward and marked the first practical implementation of blockchain technology. Nakamoto created a digital currency that worked independently of banks and intermediaries while being resistant to fraud. It was the beginning of the blockchain revolution.

THE ADVENT OF BLOCKCHAIN: A DIGITAL REVOLUTION
Blockchain offers solutions to these long-standing issues:

– It introduces a tamper-proof and secure way to record transactions, redefining trust in online transactions. Providing a secure and transparent way to conduct business.
– It boldly eliminated the need for intermediaries, such as banks and payment processors, reducing costs and increasing efficiency in financial transactions and beyond.
– Blockchain’s ledger system ensures data integrity by preventing unauthorized changes or data loss.

The Evolution Continues
The impact of blockchain extends beyond cryptocurrencies, finding applications in various sectors. It enhances transparency and traceability in supply chain management, secures voting systems, automates contractual agreements, empowers individuals to have greater control over their data, and simplifies cross-border transactions. In a world where the digital landscape keeps evolving, blockchain technology stands as a transformative force, redefining the way we conduct transactions, manage supply chains, secure voting systems, and safeguard data integrity.

This technology is rapidly integrating into our daily lives, and soon governments, banks, and multinational businesses will need to adopt some form of blockchain technology in business practices. Blockchain technology has indeed come to stay.

In our next article, we’ll look at real-world applications of blockchain technology. You’ll get to see how this innovative concept has transformed into a global phenomenon by making a difference in various aspects of our everyday lives. Join us for an exciting journey into the world of blockchain and its tangible uses.