In 1991, Stuart Haber and W. Scott Stornetta wrote about a secured chain of data blocks with timestamps that cannot be tampered with. By incorporating Merkle trees, they along with Bayer in 1992, the efficiency was improved by collecting multiple document certificates into one block. In 2008, Satoshi Nakamoto improved the design which worked without signed by a trusted party. Based on these design improvements, in 2009 Nakamoto implemented a cryptocurrency bitcoin in which the improved block chain served as the public ledger for several transactions on the network.
Two basic components are vital to any blockchain: a blockchain database which is run, operated and managed autonomously; and a distributed timestamping server. The authentication comes from mass collaboration to serve their common interests which enables a robust workflow with enhanced data security. A secure blockchain does not permit virtual reproducibility and each unit of value can be transferred only once which avoids duplication. In short, a blockchain is a decentralized, distributed public digital ledger which records transactions between computers and any record cannot be altered retroactively that permits users to verify and audit transactions independently.
1. As a distributed digital ledger for cryptocurrencies. Bitcoin and Ethereum are built upon blockchain technology. Facebook might launch its own cryptocurrency for facilitating payments.
2. As an autonomous smart contracting system. Using the blockchain technology, proposed contracts can be executed without manual intervention based on set rules of execution of Statement of Work as defined in the contracts and the reward mechanism as set in the agreed pricing schedules. For example, intelligent escrow can be built on blockchain technology, thereby reducing business risks and moral hazards.
3. As distributed digital ledger in banking and financial institutions. This can reduce process time in back office transactions and settlements which increases efficiencies and reduces costs.
4. As an autonomous gaming algorithm and for creating digital catalogs of game assets. Games such as Huntercoin, CryptoKitties, etc have faced success using blockchain technology.
5. As a self-monitoring Supply Chain platform. Blockchain technology is deployed in logistics and supply chain management. Everledger and Walmart are notable few companies who have already made in-roads in this technology to reap the benefits.
6. As a Space platform to run applications in space. SpaceChain is a community-based space platform which is world’s first open-source blockchain-based satellite network.
7. As a public transparent ledger system.
8. As a system to compile data on sales, digital use and payments to content creators especially for musicians.
9. As a distribution and monitoring method for Insurance Industry.
10. As an online voting mechanism