The history of blockchain development

In the course of nearly ten years of development, blockchain technology has brought a great impact on politics, economy and even culture. Melanie Swan divides the development stages of blockchain into blockchain 1.0, blockchain 2.0 and blockchain 3.0 eras according to the development of blockchain. Along these three eras, we can clearly see The present and future of blockchain.

Blockchain 1.0 Era

The birth of Bitcoin is a sign of the arrival of the blockchain 1.0 era. During this period, the development of blockchain technology was closely related to digital currency, and its applications were generally concentrated in currency transfer, exchange and payment. In a sense, the blockchain technology of this period found a solution to the decentralization of currency and payment.

The definition of Bitcoin on Baidu Encyclopedia is: a digital currency in the form of P2P, and point-to-point transmission means a decentralized payment system. After Satoshi Nakamoto proposed the concept of “Bitcoin” and released it publicly, it became the source of everyone’s research on the blockchain.

In the era of blockchain 1.0, the main innovation is to create a set of decentralized, open and transparent transaction records general ledger – the database is shared by all network nodes, updated by “miners”, and maintained by the whole people, no one can control this General ledger. This technology has had as much impact on the financial industry as the invention of double-entry bookkeeping.

Characteristics of Blockchain 1.0 Era

  • Data layer: block-like data block structure

The so-called chain data block structure means that the data blocks in the system are linked in an orderly manner by stamping time stamps, and after being processed by cryptography and other technical means, they are linked in an orderly manner in an end-to-end manner. When a new block is generated and needs to be packaged and uploaded to the block system, the nodes in the system need to store the hash value of the previous block of the new block, the current timestamp, the valid transactions that occurred within a period of time and their mek Contents such as the root value of the tree are packaged and uploaded, and broadcast to the whole network.

Since each block is connected to the previous block, as the length increases, all the previous information must be reconstructed to modify the transaction information of the blockchain, which is almost impossible, thus ensuring security of ledger information.

  • Fully shared ledger: ensures the authenticity of ledger information

In the blockchain network, the information recording historical transactions is transmitted to each node, and each node can own and store a complete and consistent transaction ledger. Even if the ledger data of individual nodes is changed or attacked, it will not affect the security of the entire ledger. In addition, since the nodes of the entire network are connected in a point-to-point manner, there is no single centralized server, so there is no single centralized server. Attack entrance. At the same time, the feature of fully shared ledger also effectively prevents the possibility of double payment.

  • Asymmetric encryption

Asymmetric encryption algorithm is an important application of blockchain, which builds Bitcoin’s security defense system by combining public key and private key.

  • source code open source

The consensus mechanism and rules set in the blockchain network can be verified through consistent and open source source code.

These features lay the foundation for the development of blockchain. In addition, the solution to the “double spending” problem of blockchain technology is also the key to the successful application of Bitcoin. For the “double spending” problem, we can simply understand it as how to ensure that each digital cash will only be spent once to avoid repeated spending.

For example: Suppose there is no third-party institution (such as Alipay, WeChat), Mr. A directly transfers 200 yuan from his own account to Mr. B. Mr. A’s account is managed by himself. If Mr. A does not deduct the 200 yuan spent from his own account, then he can copy the 200 yuan to countless individuals such as C, D, and E indefinitely. This phenomenon exists in abundance on the Internet, and we can copy and forward a file or music indefinitely to anyone we want to send without paying the corresponding price.

So how to prevent digital assets from being reused? Satoshi Nakamoto made the following settings in the Bitcoin White Paper:

  1. The new transaction is broadcast to the whole network, so that every node in the network knows that a transaction has occurred.
  2. Each node packs the received transaction information into a block.
  3. Each node tries to find a proof-of-work in its own block with enough difficulty to get priority broadcasting rights.
  4. When a node finds the proof of work, it broadcasts it to the whole network.
  5. If and only if all transactions included in the block are valid and never existed before, the rest of the nodes agree to the validity of the block.
  6. The approved blocks will be connected to the system and linked with other blocks on other chains to continuously extend the length of the chain. Due to the tamper-proof modification of the blockchain, after a new block enters the system, if you want to change the information on the block, you must change all the previous information, thus ensuring the security of the blockchain.

In the Bitcoin system, a transaction will be irreversible after being confirmed six times in a row, that is, the principle of “six confirmations irreversible”: a transaction data is confirmed once after being packaged into a block, and the transaction will be reciprocated six times in a row. Information will live permanently on the blockchain. Because each confirmation takes a certain amount of time, six confirmations will naturally take a long time.

In this case, trying to make two payment transactions for a fund, due to the long confirmation time, it is impossible for the latter transaction to be confirmed at the same time as the previous transaction. After the transaction is confirmed to be valid, the second transaction cannot be confirmed, thus effectively avoiding the “double-spending” problem.

Real-world applications in the era of block 1.0

Currency and payment constitute the most significant applications in the era of Block 1.0, and a series of virtual currencies represented by Bitcoin have emerged, such as Litecoin, Dogecoin, Ripple, Futurecoin, Peercoin, etc. Thousands of digital currencies, and there are about 700 still in operation. These “alternative currencies” act as “cash” on the Internet, opening up another world in the financial field. In the application scenario of virtual currency, individuals can use A decentralized, distributed and global way to distribute and trade various resources among individuals.

The blockchain in this period set off a huge wave in the financial field. In the fields of transfer, remittance and digital payment, blockchain technology has attracted much attention. In these fields, the traditional method is to use central institutions such as banks to conduct cumbersome procedures such as account opening banks, counterparty banks, clearing organizations, and overseas banks (correspondent banks or overseas branches). The processing process is long and costly. After the application of blockchain technology, payment can realize end-to-end transactions, eliminating the tedious intermediate processing links, which is not only fast, but also very low in transaction costs. Especially in terms of cross-border payment, the blockchain-based payment system can provide users with global cross-border, real-time payment and settlement services in any currency, and cross-border payments will be completed in an instant at a low cost.

Blockchain 2.0 Era

Characteristics of Blockchain 2.0 Era

If the blockchain 1.0 solves the problem of decentralization of currency and payment, then the problem solved by blockchain 2.0 is the decentralization of the market. The key word in this period is “contract”. As a result, blockchain technology has been fully applied in economics, markets, finance, etc., such as applications in stocks, bonds, futures, loans, mortgages, property rights, and smart assets.

The advancement of blockchain 1.0 to 2.0 is, to a certain extent, a promotion process of Satoshi Nakamoto’s original design concept of blockchain. Regarding the development path of the blockchain, Satoshi Nakamoto mentioned in an open email in 2010: “I have been thinking many years ago whether Bitcoin can support multiple transaction types, including escrow transactions, debt contracts, third-party transactions, etc. Three-party arbitration, multi-signature, etc. If Bitcoin can develop on a large scale in the future, then these types of transactions will be what we want to explore in the future, but these transactions should be considered at the beginning of the design, so that it will be possible in the future.”

Following the original setting, blockchain technology continues to evolve on the basis of Bitcoin. There are three core ideas in Satoshi Nakamoto’s vision: a decentralized public transaction ledger end-to-end direct value transfer system, a powerful scripting system to run any protocol or currency, etc. Bitcoin realizes the first two, and the third technology is realized on Ethereum. It can be said that the emergence of Ethereum is the representative of the blockchain 2.0 era, and the development of this period is closely related to the development of contract technology.

Regarding Ethereum, it can be defined as an open source block underlying system in which all blockchains and protocols can be run. Just like Bitcoin, Ethereum is not controlled by anyone and is maintained by all participants on a global scale. Just like the Android system, it can provide users with a very rich API, allowing many people to quickly develop various blockchain applications on it. As of now, there are more than 200 applications on Ethereum.

Smart contract is one of the remarkable features of Ethereum, and it is the basic technology of programmable money and programmable finance. The concept of “smart contract” was first proposed by cryptographer Nick Szabo in 1995. This concept can be simply understood as: a series of promises (promises) defined in digital form, once the contract is established, the principle that the smart contract can be automatically executed on the blockchain system without the participation of a third party fully embodies the principle that the programmer has always been Believe in “code is law”. Although the time when this theory was put forward is not too short, it was not until the emergence of Ethereum that smart contracts were widely used, and Ethereum provided a friendly and programmable basic system for smart contracts.

The prerequisite for the smooth execution of smart contracts is that the content of the contract cannot be tampered with, and the execution process must be open, transparent and trustworthy. With the advent of blockchain technology, features such as decentralization, tamper resistance, collective maintenance, and traceability have become a natural symbiotic environment for smart contracts. Based on this, when the new generation of blockchain applications represented by Ethereum is closely integrated with smart contracts, blockchain technology can be improved again. On Ethereum, after a smart contract is created, it is automatically executed by the program, and no one can stop it from running. Smart contracts on Ethereum can control various digital assets in the system and perform complex algorithms and operations.

Let’s use an example to understand the impact of the application of smart contracts. Taking flight delay inspection as an example, when the passenger’s flight is delayed, in order to obtain compensation, they need to actively contact the insurance company and provide relevant certificates. It takes a long time for insurance companies to pay compensation. If the flight delay insurance adopts smart contract technology, once the flight is delayed, the flight delay agreement signed between the passenger and the insurance company will be triggered, and the compensation funds will be automatically transferred to the passenger’s account.

Functionally, Ethereum builds a general-purpose, excellent underlying protocol that provides a Turing-complete scripting language, and smart contracts can be written to execute on the system. Here, we want to understand a basic concept – Turing completeness, that is, a programming language that can theoretically solve any algorithm.

Because of the need to support smart contracts, there are two types of account addresses on Ethereum: one is an ordinary account, and the other is a contract account. The ordinary account is similar to the account of the Bitcoin network, and the contract account is mainly used for smart contracts.

From the operating principle of Ethereum, we can see that the blockchain provides a trusted execution environment for smart contracts, and smart contracts facilitate the expansion of blockchain applications. Over time, the application of this technology extends beyond currency to a wider field with greater compatibility.

Real-world applications in the era of blockchain 2.0

Thanks to the open programming environment and the application of smart contracts, the blockchain has developed rapidly during this period. Its application range has gone beyond currency and extended to financial derivatives such as futures, bonds, hedge funds, private equity, stocks, annuities, crowdfunding, and options. In addition, with the combination of the electronic process of notarized documents, intellectual property documents, asset ownership documents, etc. with the blockchain, tangible or intangible assets have found a possible operating environment on the blockchain.

On the blockchain represented by Ethereum, people can write the code of assets and create new blockchain assets. In short, they can issue their own blockchain tokens, and what kind of issuance mechanism is used, The name of the token, how many to issue, and how to issue it are all up to you. At the same time, the functions of blockchain assets can also be created by writing the code of smart contracts, such as voting, gambling, conditional contracts, etc.

Although the blockchain-based smart contract is still in its initial stage, its potential is obvious. We can imagine a day in the future when tangible assets such as real estate cars under people’s names enter the blockchain in the form of data, and in the form of contracts Create a will: According to the conditions set in the will, the will process set after a few years is triggered, and these assets will be automatically transferred to the heirs according to the will of the testator, without the need for a third party ruling such as a court or a lawyer. At that time, perhaps the business of lawyers will also undergo great changes, from adjudicating contracts to creating templates for smart contracts on the blockchain, and people will carry out various peer-to-peer business activities based on smart contracts. At that time, people will no longer have to worry about breach of contract, fraud and other behaviors caused by human greed. Smart contracts that exist on the blockchain with codes and programs will not be manipulated by anyone, and the machine “judge” will be objective and fair. to execute the established contract.

In short, in the era of blockchain 2.0, the blockchain technology that carries smart contracts will give full play to the function of a decentralized transaction ledger, which can be used to register, determine and transfer various types of assets and contracts. However, at present, the blockchain 2.0 era is still in its early stage, many applications are still based on ideas, and the implementation of applications has not yet formed a scale, and most projects still need to pass the verification of time. However, its broad application prospects have attracted the attention of China, the United States, Israel and most European countries and invested heavily in research. Experts predict that the era of blockchain 2.0 will be the era of blockchain explosion.

The history of blockchain development

Blockchain 3.0 Era

The era of blockchain 3.0 is also the era of comprehensive application of blockchain, thus building a large-scale collaborative society. In addition to finance, economy and other aspects, the application of blockchain in social life at this time is more extensive, especially in the fields of government, health, science, culture and art.

Before discussing the blockchain 3.0 era, let’s understand a few concepts: Dapp, DAC, DAO, DAS

Dapp( Decentralized application): Decentralized application

DAC (Decentralized Autonomous Corporation): Decentralized Autonomous Corporation.

DAO (Decentralized Autonomous Organization): Decentralized Autonomous Organization.

DAS (Decentralized Autonomous Society): Decentralized Autonomous Society.

The application evolution of blockchain can be said to be a development history from Dapp to DAC and DAO, and then to DAS. When blockchain technology is applied to social governance, we have entered the era of blockchain 3.0.

It is conceivable that for an intelligent government system built on the blockchain, it can carry public affairs such as storing citizen identity information, managing national income, distributing social resources, and resolving disputes. In this system, information related to citizens such as land deeds, registered enterprises, marriage registration, health file management, etc. can be well preserved and processed. When a baby falls to the ground, the doctor uploads the child’s birth date and other information to the blockchain citizen electronic identity system. After the system confirms the child’s information, it will assign the child an ID. After the ID is confirmed by the relevant government departments, the relevant electronic identity The information will accompany the child’s life. After that, the child’s school status, health, property, professional title, credit and other information will be linked to the ID and stored on the blockchain. When he dies, the testamentary contract about him will be triggered, the relevant property will be distributed to his heirs, and there will be no new information on the information chain about him on the system.

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