Blockchain technology originated in the late 1970s when a computer scientist named Ralph Merkle patented hash trees (aka Merkle trees). These trees are a computer science structure used to store data by linking blocks together using cryptography.
In the late 1990s, Stuart Haber and W. Scott Stornetta implemented an immutable document timestamping system using Merkle trees. This is the first instance in the history of blockchain.
Blockchain technology has been evolving continuously through three generations:
Generation One: Bitcoin and Other Virtual Currencies
In 2008, an anonymous individual or group known only by the name Satoshi Nakamoto outlined the modern take on blockchain technology. Satoshi Nakamoto’s idea of the Bitcoin blockchain uses 1 MB blocks of information for Bitcoin transactions. Many functions of the Bitcoin blockchain system are still at the center of blockchain technology even today.
Second Generation: Smart Contracts
In the years following the first generation of cryptocurrencies, developers began to think about blockchain applications beyond cryptocurrencies. For example, the inventors of Ethereum decided to use blockchain technology in asset transfer transactions. Their important contribution is the smart contract function.
Third Generation: The Future
Blockchain technology is constantly evolving and growing as numerous companies discover and implement new applications. Many companies are addressing the constraints of scale and computing power, and in the ongoing blockchain revolution, the potential opportunities are limitless.
So, what benefits will the development of blockchain technology bring?
Blockchain technology can bring many benefits to asset transaction management. Here are some of the benefits:
Advanced security features
Blockchain systems can provide the advanced security and trust features required for modern digital transactions. There is always the fear that someone will manipulate the underlying software to generate counterfeit money for themselves. But the blockchain uses the three principles of encryption, decentralization, and consensus to create a highly secure underlying software system that is almost impossible to tamper with. There is no single point of failure, and transactions cannot be changed by a single user.
Better efficiency
Business-to-business transactions can take significant time and create operational bottlenecks, especially when compliance and third-party regulators are involved. Transparency and smart contracts in the blockchain can make such business transactions faster and more efficient.
Faster Audit
Businesses must be able to securely generate, exchange, archive and reconstruct electronic transactions in an auditable manner. Blockchain records are chronologically immutable, which means that all records are always in chronological order. Such data transparency makes the audit process faster.
