Blockchain technology had its inception in 1991 and has evolved a great deal since then. The wide adoption of Blockchain has led researchers and contributors continuously upgrade this open-source technology. In the present scenario, the Blockchain has evolved tremendously from being a digital distributed ledger to a technology that helps other Web3 components (like Metaverse or NFTs) flourish in the Web3 realm. With all the buzz around this ever-evolving technology, let’s go back to the original Blockchain era.
Establishment of Blockchain (1991 – 2012)
Developed by Stuart Haber and E. Scott Stornetta in 1991 as a practical method for keeping digital document backups, Blockchain technology began to take shape. As time passed, they intended to enhance the security of the documents’ timestamps.
They introduced the concept of the Merkle tree in 1992, which increased the efficiency of Blockchain. To avoid network spam and abuse, Hal Finney brought the Proof-of-Work (PoW) mechanism in 1993.
Reusable Proof-of-Work (RPoW) was developed in 2004, which created a transferrable RSA-signed token by receiving a non-exchangeable hash cash depending upon the Proof-of-Work token. As a result, RPoW solved the problem of double-spending.
This year plays an essential role in the Blockchain industry. Satoshi Nakamoto introduced Bitcoin (BTC), aiming to create a digital currency without the involvement of a Bank. Bitcoin has been a solution to problems during the recession. Software-based computing functions were introduced, unlike hardware functionalities. The mining concept was also introduced alongside the introduction of Bitcoin.
Bitcoins became a rewarding source introduced by individual miners who used the PoW algorithm in 2009. The first block was mined by the founder itself, Satoshi Nakamoto, with a reward of 50 bitcoins. Bitcoin was open to the public for exchange with actual money in the same year. In 2012, Bitcoin was worth $250 million (Around 2000 crore rupees).
The struggles and rise of Blockchain as a technology of the future (2013 – 2018)
At the beginning of 2013, Bitcoin became famous in multiple ways; approximately 11 million Bitcoins were traded, with a total currency valuation of over $1 billion. Also, China and Thailand banned Bitcoin in 2013.
Ethereum (ETH) platform was built by Vitalik Buterin, which became more than mere Crypto and a decentralized platform controlled by no specific individual. The concept of smart contracts was introduced, which played a significant role in Blockchain. Smart contracts work as a self-executing program and are present on the Ethereum Blockchain network.
By 2016, Blockchain applications started getting noticed by people, and they realized it’s more than mere Crypto. Together, the Bank of Japan and the European Central Bank initiated research into exploring use cases on the Blockchain. Bank of England also started implementing Blockchain for their bank transaction settlements.
In 2017, US regulators accepted bitcoin as an important investment. Japan also started accepting bitcoin as a legal tender, and over 15% of the banks were involved in Blockchain by then.
Blockchain as a technology saw its first setback in 2018. Companies like Twitter, Facebook, and Google banned advertisements related to Crypto. But, countries like South Korea initiated investment in large amounts in Blockchain-based start-ups; however, they banned Crypto trading.
The value of Bitcoin dropped to $3,800 (Around 3 Lakh rupees) from $20,000 (Around 16 lakh rupees) in 2017.
The worldwide acceptance of Blockchain as a potential technology (2019 – Present)
Since 2019, Blockchain has started its upward trend and is getting acceptance worldwide. During these two years, Facebook announced its Crypto called “Libra.” China began issuing bonds on Blockchain and having their state-approved digital currency.
PayPal started dealing with Cryptos in 2020. Ethereum announced the launch of Ethereum 2.0, where it will change its consensus mechanism from PoW to PoS, gradually reducing gas fees. Several multinational corporations (MNCs) started growing their interest in Blockchain.
This year has been an unpredictable year for investors. Bitcoin’s value touched $64,000 (Around 52 lakh rupees) and soared to $35,000 (Around 28 lakh rupees) in the same year. Elon Musk announced that bitcoin would be accepted as a form of payment for Tesla vehicles but reversed his decision as mining requires high power consumption.
NFTs got significant exposure in the same year. OpenSea opened its platform for artists, traders, and buyers of NFTs. Metaverse term spread like wildfire as Facebook’s name was changed to Meta by Mark Zuckerberg.
2022 saw a drastic increase in fame for Metaverse and NFTs. People, artists, and traders got more trading and earning options. In contrast, the Indian government announced a 30% levy on digital asset transfers after banning the use of Cryptos as a payment system in 2021.
Several companies like Ferrari, Nike, Adidas, Puma, and Disney got into Metaverse and started promoting their products. Celebrities started selling their collections as NFTs.
Blockchain Technology is no more an alien concept. Most industries and countries have realized the power of this technology. Blockchain technology has been integrated into supply chains, entertainment, transportation, healthcare, and other industries. The most impacted industry, among others, is the finance industry. Most industries and countries are moving from Centralized Finance (CeFi) to Decentralized Finance (DeFi), where permissioned Blockchains are heavily used.
It would be interesting to know what more this technology can bring.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.