The underlying technology behind cryptocurrencies is blockchain. So today we will talk about the history of Blockchain and what are the 4 types of blockchain. Let’s find out by reading the article below.
The history of Blockchain
In 1991, research scientists Stuart Haber and W. Scott Stornetta described blockchain technology. They wanted to introduce a computationally practical solution for time-stamping digital documents so they cannot be backdated or tampered with. They developed a system that uses the concept of a cryptographically secure blockchain to store time-stamped documents.
In 1992, Merkle Trees were incorporated into the design to make blockchains more efficient by allowing multiple documents to be collected into a single block. Merkle trees are used to create "secure blockchains". It stores a series of data records, each data record is connected to the previous data record. The most recent record in this chain contains the history of the entire chain. However, no one cared about the technology, and the patent expired in 2004.
In 2004, computer scientist and cryptography activist Hal Finney introduced a system called Reusable Proof-of-Work (RPoW) as a prototype for digital cash. This is an important early step in the history of cryptocurrencies. The RPoW system works by receiving non-exchangeable or non-fungible Hashcash-based proof-of-work tokens in return, creating an RSA-signed token that can further be transferred from person to person.
RPoW solves the double spending problem by registering ownership of tokens on a trusted server. This server is designed to allow users around the world to verify its correctness and completeness in real time. Also, in 2008, Satoshi Nakamoto conceptualized the theory of distributed blockchains. He improved the design in a unique way, adding blocks to the initial chain without requiring them to be signed by a trusted party. The modified tree will contain a secure history of the data exchange. It utilizes a peer-to-peer network to time-stamp and verify each exchange. It can be managed autonomously without the need for a central authority. These improvements are very beneficial, making blockchain the backbone of cryptocurrencies. Today, the design serves as a public ledger for all transactions in the cryptocurrency space.
Blockchain development has been steady and promising. The words block and chain were used separately in Satoshi Nakamoto's original paper, but eventually became popular as one word "blockchain" in 2016. Recently, the file size of the encrypted blockchain, which contains a record of all transactions that occurred on the network, ranged from 20 GB to 100 GB.
What are the 4 types of blockchain?
There are mainly two types of blockchains; private and public blockchains. However, there are also variants such as federated and hybrid blockchains.
1. Public Blockchain
A public blockchain is an unrestricted, permissionless distributed ledger system. Anyone with access to the Internet can log into the blockchain platform to become an authorized node and become part of the blockchain network. Nodes or users that are part of a public blockchain are authorized to access current and past records, verify transactions or perform proof-of-work for incoming blocks, and conduct mining. The most basic use of public blockchains is for mining and exchanging cryptocurrencies. Therefore, the most common public blockchains are the Bitcoin and Litecoin blockchains. Public blockchains are mostly secure if users strictly follow security rules and methods. However, this is only at risk if participants do not follow security protocols in good faith.
2. Private Blockchain
A private blockchain is a restricted or permissioned blockchain that only operates in a closed network. Private blockchains are often used in organizations or businesses where only selected members are participants in the blockchain network. Security levels, authorization, permissions, accessibility are in the hands of the controlling organization. As such, private blockchains are similar in use to public blockchains, but with a small and restricted network. Deploy private blockchain networks for voting, supply chain management, digital identity, asset ownership, and more.
3. Consortium chain
A consortium blockchain is a semi-decentralized type where multiple organizations manage the blockchain network. This is the opposite of what we see in private blockchains managed by only one organization. More than one organization can act as a node in this type of blockchain and exchange information or mine. Consortium chains are usually used by banks, government organizations, etc.
4. Hybrid blockchain
A hybrid blockchain is a combination of private and public blockchains. It uses the properties of two types of blockchains, one that can have a private permission-based system and one that can have a public permissionless system. Through such a hybrid network, users can control who can access which data stored in the blockchain. Only selected parts of data or records from the blockchain can be allowed to be made public, with the rest kept private in the private network. The hybrid system of blockchains is so flexible that users can easily join a private blockchain and multiple public blockchains. Transactions in a hybrid blockchain private network are typically validated within that network. But users can also publish it in the public blockchain for verification. Public blockchains increase hashing and involve more nodes for verification. This enhances the security and transparency of the blockchain network.
I hope this article will help you to learn the history of Blockchain and what are the 4 types of blockchain. Today blockchain technology is gaining a lot of mainstream attention and is already used in a variety of applications, not limited to cryptocurrencies.
